The other day, some of my fellow friends came shouting to me. “What on earth you are enjoying the night’s sleep while the Apple universe has been set on fire with the piles of iPhone pessimism!”
Just woken up from the sweet slumber, I replied with a mix of anger and smile, “God may damn you! I was sipping hot coffee with Warren Buffett who had just cashed-in-on 522,802 shares of Apple.”
The analysts thundered, “Don’t you see how much iPhone sales are bleeding these days! Apple’s premium smartphones are on the record decline with no signs of an upswing.”
I shot back yawning, “Why the heck have you been harping the same rap for over a decade now. My ears have almost turned deaf and can no longer bear with your clamor.”
My fellow friends remained mum. So, I got another chance to take a friendly pot shot. “You have turned rather skinny. High time, you stopped living by the day and crying or throwing tantrums by night!”
iPhone Pessimism: Nothing But A Cynical Mood Swing
When it comes to feeling the pulse of rumor mills, not everyone can read between the lines. Let alone the newbies; even experts can have an unexpected nosedive.
Having observed rumors about Apple for several years, I can say that they don’t always have a concrete substance to back the claim. Many a time, the rumors are nothing but manufactured lies spread for two prime reasons:
- First, create uncertainty about AAPL for monetary gains.
- The second, try to break the loyalty of Apple’s customers.
Well, that brings me to the real story-The So-Called iPhone Pessimism. I find it nothing but a cynical mood swing that’s momentary. I’m gonna share five facts to bust out this balloon. Just five facts. No big deal.
#1. Drawing Conclusions from Supply Chain Sources Is Like Jumping the Gun in Haste
It’s never a good idea to jump the gun in haste. More often than not, the conclusions that are drawn from the shallow depth of field creates more noise and makes less sense.
And from what I can see this latest balloon is filled with the airy concern caused by the supply chain. No sooner did Apple say that it would no longer report the total sales of iPhone, the gossipmongers flooded the entire Internet with cock and bull story.
The iPhone has already peaked and is on a rapid decline. As iPhone sales have hit the wall, Apple doesn’t want to reveal the total sales. So on and so forth.
Same age-old story but with a new tune.
Worse, then came the stories that several iPhone suppliers including Lumentum, Japan Display, Qorvo, and Foxconn are blaming Apple for their recent loss of form and fortune. And guess what? A newly manufactured thriller called “iPhone Pessimism” started raking billions on the box office.
The people who have a keen eye for tracking business trends or know about the thick and thin of how the international market goes about its job would tell you the truth.
Reaching a surefire conclusion merely based on the ever-volatile supply chain fever is pretty much like prescribing the medicine without reading the thermometer.
Don’t believe me? Check out what Gene Munster, an analyst with Loup Ventures, has to say.
“Interpreting data points around demand from the supply chain is a dangerous art. Historically, investors have drawn the correct conclusion as many times as the wrong one.” – CNN Business
#2. Most Of The Recent Predictions About iPhone Sales Have Gone Wrong
Yes, you can fail once. You can get wrong the second time as well. But if you keep on failing repeatedly, there may be a flaw in the way you go about your work.
That is not to suggest that failing is a crime. All I’m trying to stress is that falling flat repeatedly and still not willing to change the tactics is not the sign of wisdom at all.
Not too long ago The Wall Street Journal predicted that the iPhone sales (due to poor demand for iPhone X) have hugely declined. However, when Apple reported the actual sales of the iPhone, WSJ proved to be wrong.
“Cook delivers again despite rampant fears,” noted GBH Insights analyst Daniel Ives, who last week warned Wall Street was in “full panic mode” ahead of Apple’s results. On Tuesday, he said that Apple’s forecast for the June quarter “was much better than feared” and would be a “major relief” for investors.
Well, that is just one classic example. When you are out in the battle to wrestle against the entire smartphone industry cluttered with the vendors that seem to be more focused on numbers and less on user-experience and security, you can’t always be on top. But that doesn’t mean the world’s most trusted brand can lose its class overnight.
#3. Just Topped the Single’s Day Sales Chart in China with USD 45 billion
While the rest of the world is embroiled in debating the decline in iPhone sales, Apple smashed each one of its rivals in their own backyard. To be more precise, the Cupertino-based company topped the Single’s Day sales chart in China by raking in massive USD 45 billion just a few days.
“It was a shopping bonanza for singles living in China on November 11th, the day celebrated as Singles’ Day. On this day, those who are not in a relationship give a gift to themselves. For Apple iPhones, it was no less than a festival as people preferred to purchase Apple iPhones, leaving brands like Huawei and Xiaomi behind on second and third positions.”
Read more iPhone Sales on Singles day in China
I guess many of my noted friends couldn’t catch this fiery headline. Else, why would they have destroyed my sleep and of course the special coffee time I was having with Sir Warren Buffett?
Do I need to add more about why you’ve just missed the breaking news?
#4. Still Most Popular Premium Smartphone By a Long Distance
Believe me, I’ve lost count on the number of times I’ve seen Apple’s smartphone taking the crown of the world’s most popular smartphone by a long distance.
Forgive me, if you find me a bit bias or sounding too optimistic about Apple or too bullish about the legacy of iPhone. But I’d like to take your attention on the list of the smartphones that were most popular in the past year.
According to well-known research firm Strategy Analytics, iPhone X remained the most popular smartphone in the world even in the second quarter of 2018. Don’t you want to know which brand came at second, third, and also at the number four slots?
Sorry to disappoint you. Apple rocked the entire show, barely leaving any space for other players to breathe—let alone live!
“For the second quarter running, the iPhone X remains the world’s most popular smartphone model overall, due to a blend of good design, sophisticated camera, extensive apps, and widespread retail presence for the device,” said Juha Winter, a senior analyst at Strategy Analytics.
#5. Apple Alone Takes Away Lion’s Share (About 90% of total profit) of the Smartphone Industry
Frankly speaking, whenever I come to know that Apple has raised the price on its iPhone and iPad, I don’t fail to give it a rant. Just like any other iPhone user in the world, I want the tech giant to slash the price on its devices.
However, every time I wake up to the horrific news of data hacking, data selling, ever-growing concern about the throttling of privacy and not to speak of the short-lived splash of the smartphones from the rivals, I can’t help praising the iPhone. And that’s the time when I feel it’s worth paying a little extra upfront rather than putting your privacy and security at risk–just for the sake of saving some bucks.
Agreed, the utmost privacy may not matter to everyone in the world. But I think it does matter to a lot of people who always want to be on the safer side of the fence. And so long as Apple will keeping living up to its unmatched stand about the security of users’ data, it will continue to take away around 90% of the total profit generated by the entire smartphone industry.
“Apple (AAPL) captured 87% of smartphone industry profits in the fourth quarter, despite accounting for only about 18% of total units sold in the period, a Wall Street firm estimated Wednesday.” – Investor’s Business Daily
I guess the above facts have cleared the doubts—paving the way for the truth. But I’ve got more to say…
Hold On… I’m Not Done As Yet
The smartphone industry has hit a saturation phase, and so has iPhone. At this stage, expecting the iPhone sales to get doubled or tripled is nothing but a wishful thought.
While the global smartphone market tumbled by a whopping 9%, iPhone sales were down by only 1% last year. Yes, you heard it right–just 1%.
Smartphone users have become a lot smarter than ever before. Now, they don’t upgrade every year.
“The global smartphone market fell 9% in a year this quarter, the biggest fall in smartphone history, with even Apple’s iPhone sales down 1% as users hang on to their phones longer.” – The Guardian
Knowing that even a five-year-old iPhone can rock the latest iOS, not many people want to jump to the new iPhone just for the sake of new design or spec bumps every year. But that doesn’t mean they want to be left too far behind. And whenever they find it’s worth upgrading, they do go for it.
Now that leads me to the question: How loyal is an iPhone user? Apple enjoys pretty high customer loyalty. Speaking the truth, no other tech companies come close, let alone surpassing Apple’s legacy. Of course, there has been a flash in the pan on rare occasions but it’s the iPhone maker that’s sitting on the ladder for long.
With such a dominating Apple ecosystem at the disposal, it’s really hard for an iPhone user to look beyond. From the most safeguard cloud service, most reliable customer service, enviable performance to the lethal integration of top-notch hardware and software, a user can’t ask for more.
What About Apple’s Fast-Growing Services?
Apple has become as much a hardware-focused company as a service-centric giant. And the Doubting Thomas must have a look at the App Store revenue that’s growing by leaps and bounds.
China became the powerhouse for iOS App Store revenue, leaving even the US far behind in 2016. According to the latest data from App Annie, Chinese app store is comparatively double the size of the US and China as far as revenue generation is concerned.
“Chinese app developers have seen “remarkable” growth and are dominating Apple’s App Store. The note said that China is “now in a league of its own among the top app markets. The Chinese app store is now double the size of the US and Japan when you look at the amount of revenue it generates.” – App Annie
No secret that iOS users spend more money on apps. That’s why App Store raked in almost double the revenue of its rival Google Play in the first half of this year.
While the App Store could earn $22.6 billion, Google Play could take only $11.8 billion. It’s 1.9 times more than what was spent on Google’s Play Store.
“Consumer spending on Apple’s App Store reached an estimated $22.6 billion worldwide in the first half, which was about 90 percent or 1.9 times more than was spent on Google Play during the first two quarters of this year. Spending on iOS grew 26.8 percent over the same period in 2017, compared to 29.7 percent for Google Play.” – Sensor Tower
So, that was about App Store. Apple Music, which was launched in 2015, has already become the number one music streaming service in the US surpassing Spotify in June. And looking at the speed with which Apple’s music app is growing, it won’t be too long when it would take over Spotify in many other markets.
With iCloud increasing its reputation as the most secure cloud-based service every day, Apple’s overall services seem to be a better package. More so because they have a very fast and steady growth.
So, Where Does the Current Wave of Negative Vibes About iPhone Sales Stand?
At best, the current wave called iPhone pessimism is a mood swing that might continue until you come across the record-breaking numbers of the newly launched iPhones. Till then, keep track of the grapevine as well as the cock and bull story for fun.
You’d like to have a look at these editorials as well:
- Apple On Customers’ Data Privacy: What Happened in 2018?
- Apple’s Pricing Strategy: Best Things Are Always Cheapest
- Why Will I Never Switch to Windows Again? Confessions of Some Mac Users
- Apple’s Product Placement: From Movies to TV Shows and Web Series