On January 2, Apple CEO Tim Cook announced a decrease in sales for the last quarter of 2018. Approximately $ 10 billion less than expected. A few days later, Samsung also revised 11% off its revenue forecasts for the last tranche of the year.
There are different situations, but both reflect a general crisis in the smartphone sector, where competition between Apple and Samsung is no longer the heart of the system. Other manufacturers, especially Chinese companies like Xiaomi, Huawei or Oppo, They offer good products at very advantageous prices, renouncing higher profits. They can do so thanks to more agile structures, fiscal incentives and low production costs and staff.
China, the key
According to Cook, the main reason for the decline would be in the so-called 'Greater China', the mainland in which the California colossus is part of its sales and that it significantly reduced its purchases of new devices. The sanctions imposed by the government of President Trump are noted in the Chinese economy, so much so that Apple decided to reduce iPhone production by almost 10% in the first three months of the year just started.
In addition to the Chinese-American commercial warfare, sales of smart phones seem to suffer from another more general problem: the market is saturated. Between 2007 and 2013, sales increased enormously, even during the toughest years of the economic crisis. Its growth year after year seemed unstoppable, with a frenzy in the search for the latest and most powerful models.
The market is collapsed
From 2015 until 2017, each year they were sold around 1,400 million new devices throughout the world. In 2017, sales fell for the first time compared to the previous year. 2018 data is not yet final, but the signals are negative. Many markets, from the United States, reached the level of saturation, with most users happy with their old cell phone and without intention to change it.
Neither the emerging markets bring better news. India, Southeast Asia, parts of Africa and South America have not yet reached saturation, but prices are falling due to the entry of producers who, for less than $ 200, offer good phones, with enough capacity for buyers' needs.
There are no innovations
Throughout 2018, Apple allowed owners of older iPhone models to replace their battery at a particularly advantageous price. Thus, consumers chose to pay $ 29 to resuscitate their old and dear cell, instead of spending a thousand on a new one.
The problem is that, in many cases, even when the new models of cell phones objectively do more and better things, these innovations already They are not considered so relevant by consumers.
For many years, especially in the United States and part of Europe, the sales cycles of smart phones have been two years. That tendency was fueled by telephone companies that every two years offered the possibility of buying very expensive models with periods of 24 months. Today things changed. In the new models, the news is not as exciting as to justify the change every two years.
The future: the services
Samsung trusts in an improvement of the sector thanks to the introduction of new models compatible with 5G networks or with long-awaited features, such as folding screens. But, beyond the cell phones, on the horizon, something big is glimpsed.
As noted by Tim Cook at the beginning of the year: "The other sectors of the company (services, Mac, iPad, Wearables / Home / Accessories) had a combined growth of 19% in one year." Apple Watch is a bigger business than the iPod was ever. This is the true revolution, the slow decline of smartphones and the rise of everything else. Speakers, robots, voice assistants, screens, clocks, clothing, among so many other products. Basically, the future is in all those technologies that will make the cell phone less central to what it is today.
Source: La Vanguardia