The Apple Is Still a Branch Too Far For Most Of Us


Only Steve Jobs (right) know what he's thinking right now...

Only Steve Jobs (right) knows what he’s thinking right now…

There were a few firsts for Apple at their recent launch of the IPhone 5s and the much talked about IPhone 5c (side note; the ‘c’ doesn’t stand for cheap but rather colour). It was the first time in Apple’s history that it has introduced more than one phone at a time, the first time that Apple held a launch event in Beijing hours after the initial launch accentuating the status of the Chinese market and Apple’s first ever “budget” phone. The launch promised to brighten everyone’s day according to CEO Timothy D. Cook – but did dear Mr Cook manage to brighten the day of this Starving Creative?

Apple is at a cross roads; the share price has dropped by 28.5% since the record highs of $700(R6960) per share just a year ago to just over $500 (R4970) recently.

In order to counter this loss in profit, Apple has introduced a budget phone to try and wrestle control of emerging markets from the dominant Asian giant Samsung. The share price rallied in recent weeks with news of the impending launch (but that is to be expected with any new product launch). But the rather lukewarm reception the phones have received since the subsequent launch has seen the share price fall slightly to its current figure of just over $500.

The IPhone 5c & 5s could be the biggest moves between somewhere to nowhere since the Million Man March

The IPhone 5c & 5s could be the biggest moves between somewhere to nowhere since the Million Man March

The question though remains; is cheap compatible with the premium brand? Apple prides itself on not engaging in price wars but rather banking on their innovation to outsmart their competitors.

In order to gain back lost profits, Apple needed to find a way of gaining traction in China where Android has a staggering 90% share of the market.  Apple’s share of the Chinese smartphone market slipped to 5%, according to research firm Canalys in the second quarter of 2013, trailing not just Samsung but also the likes of Lenovo Group Ltd , ZTE Corp , Huawei Technologies and Xiaomi Technology (that’s got to hurt). So this was a make or break event for Apple unfortunately the price has not been well received in China. Apple’s plastic iPhone 5c will sell for 4,488 Yuan, almost $200 more than the United States retail price of $549 and only 800 Yuan less than its top-of-the-line sibling, the 5s (Reuters). This absurd pricing has left investors feeling frustrated and others questioning “does Apple even know what cheap is?”.

Ultimately, it is the Chinese who feel most cheated. These meme that was a big hit in Asia has shared their centiments

Ultimately, it is the Chinese who feel most cheated. These meme that was a big hit in Asia has shared their sentiments

Asia and the developing world are not the only problem Apple are facing; App developers are increasingly thinking of developing for android first rather than  IOS (Apple’s Operating System). One of Apple’s biggest draw cards was that it would get all the latest apps first prior to anyone else, but with the continued rise of Android with a 52% market share compared to Apple’s 40%, developers for the first time are considering writing for android first.

The Apple is still just a branch too high for most of us and Apple will continue to struggle in the coming years.

It’s not all gloom and doom for Apple though. Apple still has a market capitalization of $449 billion (about R 4 463 958 000 000.00), making it the world’s most valuable publicly traded company. Its sales continue to rise and the phone remains profitable, but the smartphone market is growing faster – especially in China.

Despite serious growth from Android and sum fun ambush marketing, the truth remains constant

Despite serious growth from Android and sum fun ambush marketing, the truth remains constant

The market size is expected to grow by 40% to over 1 billion smart phones according to research company IDC. Penetration into the developing market is key for Apple’s future profitability and continued dominance, especially in BRICS countries. Nevertheless, Apple continues to lag behind with even Microsoft winning more users than Apple in emerging markets. This was a make or break event for Apple but sadly an absurdly priced plastic 4s (which is what the 5c essential is) was never going to be enough to propel Apple in Asia.

The Apple is still just a branch too high for most of us and Apple will continue to struggle in the coming years.

It’s definitely too early to say that this is the end for the iconic IPhone but the warning signs are gathering and similarities between it and the joke that is now Blackberry cannot be ignored. Apple needs to find some way of getting its foot into the Chinese and Asian market, Samsung and HTC are well ahead the 5c is not the answer though.

That’s our piece and tell them you heard it from Matt “The Rat” Mkhize. 

Follow us Starving Creative or follow @Mr_MediaX

 

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