Apple iPhone sales plunged by 20% in November – Counterpoint

Facing more affordable competition from the Chinese brands, the iPhone’s total sales suffered a 20% decline in November, with the cheaper XR model outselling the more expensive models, according to an update from Counterpoint.

The research firm published its monthly update on iPhone sales for November, estimating that the decline was across the board. In Europe and North America, replacement cycles are getting longer while operators are reducing their subsidies, both trends playing to the decline of iPhone sales.

One exception was China, where the sales held largely thanks to the 11.11 (“Single’s Day”) sale, where all online channels would hand out discounts. However, the China market is expected to go down in December. On one hand the Single Day sales already satisfied much of the demand; on the other hand, the ongoing trade war with the US has pumped anti-American sentiment into some consumers, which Tim Cook also employed to explain away the weakness in its phone business.

When it comes to the model breakdown, Counterpoint said the best-selling model was XR, the cheapest among the three new models recently launched. More specifically, the 64GB version, the one with the smallest memory, was selling the best. This is in stark contrast to a year ago, when the best-selling model was the then newly launched iPhone X, the most expensive one in the new line-up. The research firm also concluded that when looking at the performances of the two most expensive models of the two years, the “iPhone XS Max, when compared to iPhone X during the same month last year, shows a 46% decline in sales.”

iPhone-November-Sales-2017-vs-2018

The decline should not come as a surprise though. In all markets the Chinese brands are gaining momentum, not the least in emerging markets like India, where smartphone market is still expanding. “iPhone has never achieved a significant share of the Indian market because it’s just too expensive. It rarely makes it above 1% of the overall market or 2% of the smartphone market. Recent changes to import taxes made the cost even more prohibitive. Apple has now decided to start assembling in India through Foxconn. This should help offset the import taxes it currently has to pay. This move may also be a hedge against potential damage from the ongoing China/US trade war.” Peter Richardson, research director and partner at Counterpoint told Telecoms.com. “However, while Apple’s brand is certainly well-regarded, Indian consumers have become accustomed to the quality of Chinese Android products, from players such as Xiaomi, Vivo and Oppo. It is questionable whether they will see the value in iOS relative to these Chinese players that are innovating much faster. Huawei (and Honor) has also been a marginal presence so far, but is expected to grow relatively quickly, adding to the market’s competitive landscape,” Richardson added.

Even in the more advanced markets Apple has shown weakness for a while. Earlier we reported that Apple was compensating the Japanese operators to offer discount and considering reviving iPhone X in Japan to boost sales.

Jio leapfrogs Idea and Vodafone for second place in India

The Telecom Regulatory Authority of India (TRAI) has unveiled the monthly growth statistics for July and India is still the market which keeps giving.

Looking at the wireless segments to start with, Jio is once again dominating. Overall, the market grew by 10.5 million subscriptions taking the total to 1.15 billion. This number is already pretty staggering, though when you consider the total population of the country is over 1.3 billion there is still room for growth. In most developed markets the mobile penetration (the total number SIM cards) exceeds 100% of the population, while there are numerous cases of this percentage going north of 110%. Looking at these statistics in the simplest of terms, there is still potential for another couple of hundred million subscriptions in the country.

Of course, Jio is capitalizing most from the insatiable appetite of the Indian digital society. When looking at the total number of subscriptions secured by the telcos, Reliance Jio captured roughly 91% of the new customers, boosting its subscription base by 11.7 million. Amazingly, the 609,000 subs captured by Vodafone or the 313,000 attributed to Bharti Airtel are nothing more than footnotes; how many markets are there were you could say that!

The end result is continued momentum for Jio. As you can see below, Jio has leapfrogged both Vodafone and Idea in the market share rankings. That said, with the much-anticipated merger on the horizon it won’t be long before the combined entity hits top spot.

Telco Net Adds Market Share
Reliance Jio 11,796,630 19.62%
Vodafone 609,974 19.3%
Bharti Airtel 313,283 29.81%
BSNL 225,962 9.8%
Idea 5,489 19.07%
MTNL -9,914 0.3%
Reliance Communications -31,814 0.004%
Tata -2,357,690 2.1%

Perhaps the most amazing aspect of these statistics is in the broadband market however. The staggering growth of the mobile segment will continue for at least the short- to mid-term future, though with a total of 22.2 million broadband subscribers there is an incredible opportunity for the right offering.

Just to put these numbers in perspective, the broadband would have to grow 50-fold to even come close to the same scale as mobile. Admittedly, it significantly more expensive to invest in infrastructure for a future-proofed broadband network in comparison to mobile, but this is an area which seems primed for the right disruption.

Of course, with disruption comes uncomfortable truths. Jio might be on an upward trend, collecting subscriptions and hiring generously, though the consequence of this disruption has been market consolidation. In the most general terms possible, consolidation is never a positive for the job market, while the Financial Express is reporting job losses of 50,000-75,000 in the Indian telco market across 2018.