Why Ruling the Premium Handset Category is not Going to be Easy for Apple

by December 6, 2016 0 comments

On November 8, 2016, when Prime Minister Narendra Modi announced that all Rs 500 and Rs 1,000 notes ceased to be legal tender in the country, people with old cash started buying Apple iPhones and other products. The spike in iPhone sales was equivalent to the demand for gold and other high-value luxury items in the first few days of demonetization.

If we go by the numbers, then over 1 lakh iPhones were sold in these three days.

This eye-popping sales stat has made the Cupertino tech giant the only smartphone manufacturer to meet the sales target in November. However, in spite of this figure Apple is still lagging behind Samsung in overall smartphone sales.

All between Samsung, Apple and Google

According to Canaccord Genuity research, Apple’s share of total smartphone industry profits grew to 94 percent during the September quarter, up from 85 percent one year ago.

This gain is a result of growing number of users switching from Android to iOS. According to Canaccord, Apple iOS is all set to cover 500 million users, up from 402.1 million users in 2014.

South Korean multinational conglomerate Samsung took a distant 11 percent share of total operating income. It also observed the world’s largest smartphone recall in September after their flagship smartphones caught fire. It was finally discontinued after the replacement phones also reported the same problem. The Galaxy Note 7, dubbed as the iPhone killer was killed in less than two months after its launch.The company had said earlier this month that it expects to take an extra hit of about 3.5 trillion won from the Galaxy Note 7 fiasco in the last three months of 2016 and the first three months of next year.

When it comes to the premium smartphone segment users have trusted both Apple and Samsung for their innovative features and overall appeal.

With the entry of Pixel smartphones,Google has already registered an impressive growth in its sales figure and according to a report by Morgan Stanley it may generate $3.8 billion in revenue by selling more than 5 million Pixel smartphones in 2017.

So the fight for the best premium handset manufacturer has turned highly competitive.

Consumer aspirations

According to a survey conducted by UBS in the US, the UK, China, Germany, and Japan people believe that Apple’s iPhone offers value for money.

Also, 48 percent of surveyed consumers believe that Apple produces high-quality products, and 33 percent of people say that their products are unique.

It’s true that Apple products are considerably very expensive but it can easily outperform other smartphones with its powerful OS, superior chipset and good camera and innovative features. Their A9 SoC (iPhone 6S, 6S Plus and iPhone SE) was considered one of the most powerful and energy-efficient mobile chips on the market then along with the Samsung Exynos 8890 and Qualcomm Snapdragon 820 and A10 Fusion SoC (iPhone 7, iPhone 7 Plus) is the fastest single-threaded mobile SoC released to date.

Apple’s great software, industrial design and a powerful ecosystem of content, apps and services drives the company.

While Samsung is reeling under pressure after the failure of their flagship Galaxy Note 7, Apple has a very good chance to take over the market. It should not forget that China and India are two countries in Southeast Asia that can’t be ignored and to rule the premium smartphone market it needs to get its price right. 

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