Has Apple’s iPhone lost its mojo in SEA?
By Edwin Yapp January 31, 2013
- Apple no longer the must-have smartphone in Hong Kong and Singapore
- Samsung continues to get under Apple’s skin, giving real options for consumers
NEWS ANALYSIS THE once impregnable dominance of Apple’s iPhone may be somewhat waning in two of South-East Asia’s (SEA) most advanced smartphone markets thanks to a confluence of factors, all of which are slowly chipping away at Apple’s market share, according to an article in Reuters.
In its report, the news agency suggested that for consumers in Hong Kong and Singapore, 'iPhone fatigue' has set in, and this has led smartphone buyers choosing devices built by other brands, notably those from Samsung Electronics, in a bid to differentiate themselves from the crowd.
The article noted that Apple's products were so dominant in 2010 that more devices in Singapore alone ran its iOS operating system per capita than anywhere else in the world.
But StatCounter, which measures traffic collected across a network of three million websites, calculates that Apple's share of mobile devices -- iPad and iPhone -- in Singapore declined sharply last year, Reuters noted.
“From a peak of 72% in January 2012, its share fell to 50% this month, while Android devices now account for 43% of the market, up from 20% in the same month last year,” it reported. “In Hong Kong, devices running Apple's iOS now account for about 30% of the total, down from about 45% a year ago, [while] Android accounts for nearly two-thirds [of the market ].
The fall in iPhone’s market share in two of Apple’s most popular markets in SEA comes off the back of the Cupertino, California-based giant’s miss of Wall Street's revenue forecast for the third straight quarter. Its shares slid to US$463 in after-hours trading on Jan 23, wiping out some US$50 billion of its market value.
Apple had said it shipped a record 47.8 million iPhones in the December quarter, up 29% from the year-ago period, but that lagged the 50 million that analysts on average had projected.
Expectations heading into the results had also been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone – accounting for half of Apple's revenue – and the iPad could be slowing, noted another Reuters report.
Other ominous signs
Besides statistical data showing the slowing sales of the iPhone, Reuters also noted that there are several anecdotal indicators in the two countries that corroborated the trend
These factors include functional reasons like the smaller battery capacity and the relatively smaller screen of the iPhone 5 compared to that of the Samsung Galaxy Note 2; the relatively cheaper and greater choice of models for the Android ecosystem; and the perception that being common leads to a loss of the “cool” factor.
“IPhones are like Louis Vuitton handbags,” Reuters quoted marketing manager Narisara Konglua in Bangkok, who uses a Galaxy SIII, as saying. “It's become so commonplace to see people with iPads and iPhones so you lose your cool edge having one.”
Singapore entrepreneur Aileen Sim said, “Android is becoming really hard to ignore, around the region and in the US for sure, but surprisingly even in Singapore.” She told Reuters, “Even my younger early-20s cousins are mostly on Android now.”
Cool factor not there
This trend, in which the younger set are beginning to abandon Apple for competitors’ devices, is another growing factor in play, noted a Forbes article earlier this month.
In a Jan 9 story, Forbes noted that young people want the latest, greatest phone that speaks to their generation and that the iPhone has possibly become passé, used by adults such as their moms, dads, and the coffee barista, a notion that young people do not like to have hanging over their heads.
Ultimately, in the eyes of today’s youth, massive popularity has watered down Apple’s coolness, Forbes noted.
“Teens are telling us Apple is done,” Forbes quoted Tina Wells of the youth marketing agency Buzz Marketing Group as saying. “Apple has done a great job of embracing Gen X and older [Millennials], but I don’t think they are connecting with Millennial kids. [They’re] all about [Microsoft] Surface tablets/ laptops and [Samsung] Galaxy.”
Signs that younger smartphone audience has cooled on Apple have been steadily accumulating over the past few months, according to Forbes. The business bi-weekly also said Apple dropped several spots or remained flat on several teen brand opinion polls, including marketing agency’s Smarty Pants’ Young Love survey.
It’s not quite clear yet how these surveys, predominantly conducted in the United States, will play out here in Asia but what’s clear is that Apple is increasingly being challenged by the plethora of readily affordable Android devices in the region.
A straw poll conducted by Digital News Asia (DNA) amongst Generation-Ys noted that there is not a lot separating Apple’s iPhone 5 and the Samsung Galaxy series of smartphones and the latest iteration of the Android operating system, known as Jelly Bean [4.2].
A number of young people pointed to the fact that while the iPhone 5 still commands a fan base, Samsung has caught up as a real alternative, and many of them are open to change.
The reality on the ground in Malaysia seems to support an earlier DNA report, in which analyst firm Ovum noted that without a redesign of the iOS user experience and underlying software platform in the next two years, Apple will find itself in a position similar to Nokia and RIM, which found themselves with outdated smartphone platforms that needed replacing.