Why Losing Market Share for iPhone Doesn't Matter

  Why Losing Market Share for iPhone Doesn't Matter   Apple's share of the global smartphone market is actually just one aspect of a much bigger picture. In fact, Apple's (AAPL (NASDAQ) $146,16 -0,68 (-%0,47) iPhone is kind of losing market share. Even if some of this share loss is due to the pandemic, that is not the whole reason. The pandemic has equally affected all its competitors. Perhaps most importantly, lower-priced phones saw significant market share gains over the past quarter, demonstrating that consumers are no longer interested in a higher-priced, expensive device. This movement is even seen in North America, the important market for the iPhone. In general, we can see that this is not so important.

Is the iPhone fading?

Technology market research team IDC, the data supplier that publishes the estimated number of smartphones delivered by manufacturers, reported that Apple increased its sales at the end of June, its last quarter. This growth in iPhone certainly outstrips Samsung's year-over-year unit delivery growth despite shipping a much larger number of devices. The iPhone doesn't scare away, despite the lesser-known OPPO and Vivo boosting their sales, and Xiaomi taking the #2 slot with shipping. Huawei and Samsung, these two names are often Apple's biggest threats to the high-end phone market, but are mostly impotent at the moment.

Why Losing Market Share for iPhone Doesn't Matter

  GlobalStats' statistics counter says the number of actively used iPhones worldwide has dropped to 26,9% after hitting 28.8% in 2020. Obviously, consumers are finding other smartphone options rather than turning to the most recognizable name in the business. But Apple shareholders need not panic just yet.

Two reasons to rest easy

Even though Apple is losing market share, that doesn't mean it sells fewer smartphones. Apple sold an average of 57,8 million iPhones in each of the last four quarters, recording the highest annual unit sales speed since 2015. In fact, the overall smartphone market is still much smaller than its 2017 peak. Despite the effects of the pandemic, Apple managed to sell more smartphones in 2020 than in the first two quarters of 2019. The other reason is that the company has done an incredible job of generating revenue from iPhone owners after entering the iOS ecosystem. According to Sensor Tower, it turns out how impressive Apple's App Store is considering Alphabet's revenue is about twice as much worldwide as Google Play did in 2020.

Last Word

Definitely, Apple investors should follow the iPhone's market share trend. There will come a time when an alternative to the iPhone will excite enough consumers to generate a drop in overall revenue as well. But if you're looking for a reason not to own one of the largest and most profitable companies in the world right now, shrinking smartphone market share isn't one of them.    

Source: The Motley Fool

 

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