Monday , June 27 2022

Apple's big problem that the consumer will suffer


Apple-iPhone Xs
Image: Apple

If there is a brand with a large number brand awareness on the market you need Apple, The devices manufactured by Cupertino, California are usually the most sold worldwide and an aspiring object for many.

This allowed him to position himself as he did the most valuable brand in the world, currently worth $ 200 billion, while Google's 155 thousand $ 500 million, first and second respectively Interbrand's best marks 2018.

However, just a few weeks after reaching trillion dollars worth of stock market capitalization, Apple is not going through the best moment.

It happens that despite the reported revenue of over 37,000 to 200 million dollars in the fourth fiscal quarter, the technology shows clear signs of facing a serious problem, and the bad thing is that it all indicates that consumers suffer.

The iPhone touches the breaking point

During a decade of existence, The iPhone has positioned itself as one smartphone most sold – sometimes sold most like in the second quarter of 2018 -. However, over the past two years suffers in front of its rivals, especially against Samsung and Huawei.

Why? In the fourth fiscal quarter of Apple, iPhone accounted for about 60% of the company's revenue 37 thousand 185 million dollars, 62 thousand 900 million reported.

It shows a spectacular number, the problem is that it sold around 46.9 million devices between July and September, With 0.5% more than in the same period, but last year. A behavior following the trend in April and June, in which it sold less devices.

To this is added that in his report has lowered sales expectations for the end of the year during the holiday season. This was interpreted as a negative sign by analysts, and although the California company reported higher revenues, its market shares fell by about 10% on Wall Street.

Actually, Apple has already lost a trillion dollar mark on the New York Stock Exchange, is currently located with a stock market capitalization value 984.19 billion dollars.

Samsung volume and Huawei threat

One of the disadvantages for the company led by Tim Cook is this it was emphasized that it is not the innovative brand which has characterized him for many years and that It remained behind the main competitors: Samsung and Huawei.

On the one hand, the South Korean company can not sell the amount of Galaxy S9, S9 + and Note 9 you want, though These devices were innovative in terms of screen and processor.

In addition, he is in favor of selling many mid-range and low-range smartphones, which allows him to maintain the first position market share overall; in the third quarter they sold 72.2 million devices (20.3% of the market).

It's bad for both Samsung and Apple Huawei threatens to stop. The Chinese brand is set in the second place of sales that exceeds that of Cupertino 52 million smartphones during July-September.

The worst thing is that analysts point out that they are selling state-of-the-art devices – not just middle and low -, both P20, P20 Pro and Mate 10 (replaced by Mate 20 Pro) they report very healthy sales.

The key is that they have been noted as innovative devices; its Leica chambers, the screen, the processor and the presence of artificial intelligence, are remarkable. And the Chinese mark does not miss the chance to let its rivals know that it profits.

The problem the consumer pays

The data show that, at least this year, The vertiginous growth of the iPhone is coming to an end and, in fact, the one that continues to account for more than half of Apple's revenue is already a serious problem.

This is because a way to compensate for not selling as many devices as their rivals, has been to maintain the strategy to significantly increase iPhone costs in the final price for the consumer. From iPhone X barrier of one thousand dollars and with Xs, Xs max it's repeating.

In fact, it is a strategy that replicates in the new iPad Pro and Mac that, in fact, they are two divisions that not only do not grow but lose their vitality; They fell by 2% and 6% respectively in the last quarter.

then, Apple's strategy is to perceive more for its products, so analysts predict that the following iPhone and iPad models will be even more expensive for consumers, all to continue to bring the attention of investors to the increasing number of sales.

This is reflected in a recent decision announced by Tim Cook to the investors in which Apple will leave to report the amount of iPhone, iPad, and Mac coming every quarter.

We do not know if this strategy will work for Apple, at least for the moment, when the markets have not received it well because there is uncertainty about the company. In addition, the consumer will end up paying because he has to pay higher and higher prices. The question is how long will they resist?

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