Has The iPhone Peaked in The U.S.?

Apple’s vice like grip in the US smartphone market is falling off as sales of the overpriced gadgets slump.

Research outfit Kantar Worldpanel ComTech said the 2.3 per cent drop in US sales had been covered by rises in China, Japan and Australia.

But the fact that Apple’s home ground is the US and that it has become increasingly dependent on its iPhone, this statistic does not bode well, particularly as the company depends on continual growth to maintain its share price the whole lot is starting become unstuck.

For the second quarter of 2015, iPhone sales grew by 2.1 percent from the same quarter last year across Europe’s five biggest markets, namely the UK, Germany, France, Italy and Spain. Growth was strongest in the UK at 5.5 percent and weakest in Italy at only 0.1 percent. Beyond Europe, iPhone sales surged by 9.1 per cent  in Australia, 7.3 percent in China and 2.7 percent in Japan.

It is worthwhile pointing that the European growth outside the UK, Australia and China is more indicative of a flat market rather than actual growth.

A possible reason for the fall in the US is better competition from Android where Apple’s Android rivals provided a tougher fight.

Carolina Milanesi, chief of research at Kantar Worldpanel ComTech, said in a press release. “In the U.S., as we forecasted last month, Android’s growth continued in the quarter ending June 30, with both Samsung and LG increasing their share sequentially. Forty-three percent of all Android buyers mentioned a ‘good deal on the price of the phone’ as the main purchase driver for their new device.”

“Android in the U.S. is undergoing its strongest consolidation yet, with Samsung and LG now accounting for 78 percent of all Android sales,” Milanesi added. “LG is the real success story of the quarter. Not only did it double its share of the US smartphone market once again, but it was also able, for the first time, to acquire more first-time smartphone buyers than Samsung.”

Screen size was the main driver for Android buyers across Europe, according to Dominic Sunnebo, business unit director at Kantar. Samsung and LG both sell big-screen “phablet” phones. Samsung’s Galaxy Note 4 sports a 5.7-inch screen, while LG’s G4 packs in a 5.5-inch screen.

Though the iPhone 6 Plus also uses a 5.5-inch display, iOS buyers are driven by a wider range of factors, Sunnebo said, including “phone reliability and durability, as well as the quality of the materials.”

Of course if you are member of Tame Apple Press you will forget to report the news and say the opposite and claim that the iPhone’s wonderful sales are a problem.

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Is Acer Doomed?

Taiwanese PC maker Acer reported worse-than-expected quarterly loss. Actually, it had been expected to be bad, but no one had predicted it would be this bad.

For the fourth quarter, the world’s No.4 PC vendor reported a net loss of $254 million. The company had posted a worse-than-expected net loss of $446 million in the third quarter and a $112.31 million loss in the same quarter of 2012. In short, its troubles have been getting worse for more than two years.

At the end of last year the company named former Taiwan Semiconductor Manufacturing Co sales executive Jason Chen as its new CEO and launched a new initiative to integrate hardware, software and cloud services. It will be a while before the new broom can sweep out two years of doom, so many are expecting more doom to emerge. Acer relied too heavily on making low-end laptops, which weakened its brand, it also missed the shift to mobile.

Acer’s senior executives are taking a 30 per cent voluntary salary cut starting January, the company said in a statement.

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Can Acer Go High-End?

Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.

With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.

The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.

Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.

It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.

“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.

Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.

One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.

“I think Acer has started to learn they are able to sell some expensive products,” he said.

Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”

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Should HP Reconsider The TouchPad?

Hewlett-Packard Co (HP) should re-think its decision to dump its TouchPad tablet since the device could double the value of the PC division HP plans to spin off, technology research firm Canalys said in a statement to clients.

HP stunned markets in August by saying it may shed its PC business — the world’s largest after the $25 billion acquisition of Compaq in 2002 — while at the same time killing webOS-based phones and the TouchPad tablet which was launched only six weeks earlier.

HP slashed the price of its tablet to $99 the weekend after announcing the TouchPad’s demise, igniting an online frenzy and prompting long lines to form at retailers as bargain-hunters chased down a gadget that had thus far failed to excite consumers.

“The TouchPad was overpriced at launch and did not sell. This led HP to draw a premature conclusion that the product category had failed,” Canalys analysts said in a research note.

Canalys said the price cut had helped make TouchPad the hottest brand in HP’s entire portfolio, gathering more interest than anything from HP in more than 10 years.

“The TouchPad has become the ‘must-have’ technology product of 2011. Perhaps no other technology vendor, apart from Apple, has ever created such hype for a technology product,” the research note said.

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Android To Control Smartphone Market By 2016

Android will be the operating system of choice for 45% of smartphones shipped by the year 2016. It will take up most of the market share vacated by the soon-to-be exiting of Nokia’s Symbian operating system, according to figures released today by ABI Research.

Although Android will come to be the dominant player in the smartphone market, this doesn’t mean that OSes will necessarily see a big cut in their own market shares, ABI said.

In fact, the firm projects that Apple’s iOS will see its market share rise from 16% in 2010 to 19% in 2016, while Research In Motion’s BlackBerry OS is expected to fall slightly from 16% in 2010 to 14% in 2016. Microsoft’s Windows Phone 7 and Samsung’s Bada will also be players in the 2016 smartphone market, as ABI projects those two operating systems to take 10% and 7%, respectively.

ABI vice president Kevin Burden says that although RIM stands to lose a bit between now and 2016, the company will carve a comfortable niche for itself in the enterprise market, as enterprise users will still need the security provided by RIM’s network operations center.

“RIM’s slight loss of share doesn’t mean falling shipments,” he says. “RIM has found its niche, but the consumer market will grow faster than its portion of it.”

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