We have mentioned reports from “Consumer Intelligence Research Partners” many times, most recently last month.
Updated, 12:38 p.m.:
Apple has fallen from 1st to 5th place in China. This is reported by Canalys’ figures for the first quarter, which show that Apple is falling like a stone by 25 percent. The iPhone now has mobiles from Vivo, Honor, Oppo and Huawei above it. The latter has increased by 70 percent.
Canalys believes that AI has convinced more people to buy mobiles where such features are actively marketed:
“AI-enabled mobiles provide important opportunities for Chinese suppliers to differentiate themselves in the premium market in 2024 to challenge Apple in their home market. Canalys forecasts Gen AI-enabled smartphones will reach 12 percent of shipments by 2024 in mainland China, ahead of the global average of 9 percent.
Lucas Zhong
It will be exciting to see what the market in China looks like next year after the launch of AI-focused iOS 18, which will be launched in beta on June 10.
Struggling in China, but skeptical of American teenagers
“Last month, the company revealed interesting figures about American customers’ mobile habits, in this context how many switch from Android to iPhone. Apple did not do the best in 2023 with 13 percent, because 2022 was the year 15 percent switched to the iPhone, followed by 13 percent in 2019. The other two years, 2020 and 2021, the figure is 11 percent. So not the worst, but a decline from 2022,” we reported on their analysis in March this year. Now they have taken a look at the iPhone activation rate in the US. Apple’s special position seems to be receding. Now they are back to more traditional market shares.
The decline continues for Apple in China with critical poor figures (something they share with Tesla), while recent figures at the same time reveal that the Californian company is able to retain young customers in its home country for selected products:
“Both 85 percent iPhone ownership and 86 percent intention to purchase an iPhone are near record highs for our survey, but down from the record levels in 2021. We believe the increased penetration and purchase intent is important given the mature premium smartphone market. Additionally, trends towards premium phones are encouraging as the company continues to introduce new iPhones that prove the overall stickiness of its product portfolio. Finally, positive trends in services may follow, as the install base for Apple hardware continues to grow.”
From 40 to 33 percent
CIRP’s latest report deals with iPhone activations in the US, and it is again bad news for Apple, even if they manage to get hold of young people in the US as already mentioned. CIRP reveals the following, based on information collected over the last four quarters, that the iPhone share of activations fell from 40 percent to 33 percent – a clear trend can be seen from March last year:
Back to the numbers when there was more competition
CIRP also reveals that Apple was at the same level in 2018, but that at that time, in addition to Android, they had competition from Blackberry and even Windows mobiles (Microsoft stopped development in 2017). They note that Apple increased steadily, but only until the first COVID year, and that they are now back to the more traditional level where the distribution is one-third iPhone and two-thirds Android.
But this is not just Apple’s “fault.” CIRP has analyzed that, even though the prices of the mobile phones have increased, the mobile phones last longer. This must be seen in the context of the fact that the pace of innovation has stopped to a large extent (hence the stately camera focus) and that “the transition from two-year subsidized mobile contracts to more transparent phone purchase plans has motivated many mobile owners to wait a little longer to upgrade from their current phone. It may affect Apple sales a little more than Android competitors.”
The figures are not crisis-dramatic yet, but if the trend continues, Apple will have to find at least one other successful product, perhaps earlier than they have previously analyzed themselves. The answer is at least not The Vision series of headsets. It will take at least six years before such products are light and comfortable enough to generate enough money for a company the size of Apple.
