The smartphone market has been declining globally due to factors like chip shortage, the COVID-19 pandemic, supply chain issues and market saturation for a few years. These also contribute to the recent economic recession. We have seen a significant drop in sales from shipping 1.5 billion smartphones in 2019 to 1.3 billion smartphones shipped in 2020.
Companies have been doing a lot of discounting to maintain the shipping units, but Apple does not do any of those. Still, Apple is rising and dominating the premium smartphone segment with 62% of sales in Q1 2022, 24.1% in global market share in 2022 and 10.9% in India.
Why Everyone Buying Apple, & Why Apple having Strongest position?
Many things contribute to this, including the Apple ecosystem, high resale value, regular software updates, innovation and design and quality. Let’s look closely at this and know why everyone buys Apple smartphones.
Apple Income 2022
The company’s income keeps rising. In 2020, Apple’s net income was 99.8 billion US dollars, the highest net income to date and the company reported 365.8 billion US dollars in revenue in the same year. Also, 50 million+ people started getting higher income, as reported by McKinsey in India and started earning $75,000 annually, which contributed to the super-rich in the country increasing their share of global income from 77% to 52% in 2021.
So naturally, people now start adopting smartphones. As people make more money, they can afford more expensive things. Which makes sense as Apple only makes expensive products. Other big companies like Samsung, Oppo, Xiaomi or other smartphone companies have expensive smartphones but also cheap ones. Whereas Apple only makes smartphones that reflect their features, specifications, design, brand value and others, you must spend at least $400 for the iPhone SE series.
This means buying an Apple product actually means something compared to people buying Samsung or any other brand of smartphones, even though both companies’ smartphones cost almost the same. The feel of inaccessibility of Apple smartphones makes the brand an aspirational brand in India, where Apple has likely gained 5.5% of the market share.
Find more statistics at Statista
Especially in India, Indonesia and Vietnam, the iPhone almost has a status associated with it, and these are Apple’s most substantial growth areas where people are willing to pay a premium for its features and design. Most developing countries, such as Afghanistan, Bangladesh, Ethiopia, Haiti, Nepal and Zimbabwe, or newly industrialised countries (NICs) like Brazil, India, Mexico, and South Africa, have rising incomes, and Apple is well positioned to take advantage of that.
Apple’s Network Effect
This phenomenon is because of the positive feedback loop that attracts more customers and enhances customer loyalty. This means that the value of Apple products and services increases as more people adopt them. Different types of network effects contribute to Apple’s leverage, such as direct network effect, indirect network effect and two-sided network effect.
- Direct Network Effect
- Indirect Network Effect
- Two-sided Network Effect
These networks give a competitive advantage and source of innovation that helps Apple maintain its dominance in the market as more people use the product and it becomes popular with the people.
Apple used to do it so carefully. Examples like iMessage, AirDrop, Apple Notes, and FaceTime which are restricted to Apple devices, are one of their network effects, but there is more. The full potential comes into effect with their digital ecosystem, which includes the iPad, Apple Watch, AirTags, HomePod, and App Store, with better app support and accessory options. And despite their smartphone market falling, their ecosystem products in each category keep rising.
This brings different types of user groups into the world of Apple as they won’t get the best Apple experience until they buy the iPhone, which is the entry point of the Apple ecosystem. Apple uses this to attract customers with their line of products and convince people to buy an iPhone to experience the Apple lifestyle. It is often praised for how seamlessly integrating and optimising its various devices work together.
Nature of Smartphone
Android smartphone companies do more experiments and try features than Apple does because they have nothing to lose, while Apple has everything to lose. Android smartphone companies might not even use those experimental features next time as we have a set example of LG, which used to do a lot of experiments with their smartphones with their main series of smartphones, but they ended up losing and shutting down their entire smartphone division. Now, smartphones are more critical and have been an essential part of the routine basis and in the market; because of this, your smartphone choice is more vital than trying new things.
Now people want a smartphone that does the work as expected. This applies to Apple, where the safer approach with fewer experiments helps Apple to become more stable, and with fewer experiments, you save cost instead focus on optimising the things and innovating that attract and make money while seeing how other smartphones are doing makes more sense for Apple. As for Apple, other Smartphones have tested that feature and saved some amount while being profitable.
iOS is catching up with Android
As we have seen, the latest SoCs from Qualcomm and MediaTek overtake the Apple Bionic SoC. So does iOS have to catch up with Android? As Android always receives the features which iOS doesn’t like, Android got the dual camera in 2013, Apple did this in 2016, Wireless charging on Android in 2013, and Apple did this in 2017. Android smartphones have millions of customisations, whereas now Apple does this slowly so they can charge extra when that feature actually releases, Where Android devices forget those features exist.
So while Android users get used to those features for Apple users, it’s new and exciting. There are still a lot of things which still need to be added to Apple devices. They take time to polish those features in a controlled manner. This drives loyalty, and the official resources work better than Android.
Apple doesn’t always offer discounts on their products. They do less, especially with their latest smartphones. Whereas the smartphones like Samsung used to give a lot of deals throughout the years, even with their latest smartphones. Therefore, while people try to save money as much as possible, this isn’t a good idea either. So Apple doesn’t devalue their products, and that’s great and makes their fans loyal to protect their value so the pricing that people can trust and secure investment.
Huawei was one of the fastest-growing smartphone companies before the US banned it, which released millions of smartphone users for Apple. The company was exponentially growing, a significant threat to South-Korean companies Samsung and Apple.
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