Apple’s demise begins in earnest with ‘new’ iPhones

By: September 11, 2013
Apple is banking that its iPhone 5S operating system is the killer feature - not the design or the outrageous price Apple is banking that its iPhone 5S operating system is the killer feature - not the design or the outrageous price

Apple announced its … ahem … new, ‘lower’ cost iPhone 5C. It will cost £469, just £80 less than the 5S – its new flagship model. (That’s about €600 in euro tokens for a low cost phone). It also looks pretty much the same as any old iPhone 5. It’s not pretty. It looks like two guys in a shed put together the design. It will disappoint old Apple loyalists. Steve Jobs may look at this launch (from far away in Narnia) and say ‘Remove the bean counters’ – let’s get some creative thinkers in here’. This won’t happen. Apple is likely to circle the wagons and defend the indefensible even more. Apple is now a production line that is hopelessly defended by bad marketing and will be further damaged due to its long standing arrogant relationship with phone retailers. (Protect the channel Apple, it was what once built you into a player).

Apple has now, officially, started its global decline in the smartphone ‘market share’ industry. It will now become a niche product, not a leading device (perhaps not a bad thing for the aging hipster Apple fan boy). The reason why lies in the world’s emerging smartphone markets. With five billion people still on this planet not having daily access to the Web, the next big push for the tech giants and hardware suppliers is to get the world connected through mobile devices.

Building smartphones for people with more limited budgets in emerging markets is now the ‘next big thing’.

Globally, Samsung is the device manufacturer with the outright lead in connecting people through mobile devices. Samsung, which overtook Apple for the first time worldwide in June in terms of Web usage, has extended its lead to 25.7% in August compared to Apple on 23.4%.

Nokia, which led globally up until December last, is now in third place on 21.7%

In the U.S. Apple has 52.2% of the mobile web market compared to Samsung’s 19%. Nokia (i.e. Microsoft) is on 1.5% in the US, meaning Nokia has enormous potential to grow its market share in this key digital economy.

In the gigantic and emerging economy of India, Samsung has 26.7% usage share while Apple has just 1%. This stat alone show how important a lower cost iPhone could be for the future fortunes of Apple. Pity.

“Globally there is an on-going battle taking place between Apple and Samsung. It will be fascinating to see if this ‘less expensive’ iPhone will help it increase market share against lower cost competitors in global markets,” says Aodhan Cullen, CEO, StatCounter.

Apple, while sticking to its core values of quality over price, and practicality over annoying features, will now start to slide into third place in the global smartphone market. Not a bad thing for aging, hipster Apple purists. Maybe it’s time Apple got back to its core and let Samsung and Microsoft do all the grubby work in the emerging markets – right? Apple could be the SaaB to Samsung’s Mercedes.

Apple once made premium products, for premium people. Now it has become tired and old fashioned, out of touch with the emerging mobile planet, and all within the space of two years. Top tip: buy Microsoft stock, and sell Apple stock.