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Apple's worldwide market share stalls as consumers await the iPhone 6

Can Apple grow beyond its installed base of loyal consumers?

seized iphones in china
Credit: REUTERS/Bobby Yip

Android continued its relentless march, gaining market share in every major world market except for Spain, according to Kantar World Panel's recent market share report. Apple lost market share in 8 of the 10 major markets on which Kantar reported, resulting in an overall 1.6% drop.

Apple’s performance measured for the quarter ending on August 31 was negatively affected by consumers delaying iPhone purchases in anticipation of the iPhone 6 and 6 Plus announcement last month.

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But the precipitous 17% decline in Japan was due to more than just consumers holding out for the iPhone 6. According to Kantar’s strategic insight director Dominic Sunnebo:

"Premium sales in Japan have recently been impacted by a rise in VAT meaning consumers rushed to buy products before the rise. Additionally Japanese consumers are very in touch with the Apple lifecycle, so we traditionally see a steep fall before a new launch and will likely see a big spike in September and October. It is also the case that local brands Sony, Sharp and Fujitsu are pushing hard in their home market and looking increasingly resurgent against global brands such as Apple and Samsung."

In the UK the iPhone 5c continued to sell well. Sunnebo explained:

"This has in part been achieved through focusing on the iPhone 5c which tends to attract a slightly less tech savvy buyer who will be less likely to be holding off for the iPhone 6. The iPhone 5c was the best selling phone in Britain in August with 8.9% share, outselling the flagship iPhone 5s with 7.6% and the Samsung Galaxy S5 with 6.0%."

Worldwide, iPhone shipments declined by 1.6%, which is just half that experienced in the quarter before the iPhone 5 line debuted in 2013. Sunnebo attributes this to Apple's focus on marketing the 5c. At $450 without a contract, the iPhone 5c isn't exactly a budget smartphone, but it brings with it the valued Apple brand, and once enclosed in a protective case it doesn't look any different than the 5s except for its lack of a fingerprint scanner.  

Sunnebo also alluded to Apple customer loyalty having a positive effect on iPhone 6 sales. Sunnebo said:

"Even before the iPhone 6 and 6 Plus were revealed, 85% of British iPhone owners planned to choose another iPhone at upgrade time."

Apple customers are known for their loyalty. But market share growth can only come from taking customers of other smartphones. Now that Apple has the iPhone 6 Plus, Sunnebo considered the possibility of consumers paying a premium for an iPhone 6 Plus over large-screen smartphones from companies such as Samsung:

"Before the iPhone 6 was announced just 13% of Samsung owners planned to switch to Apple with many choosing Samsung devices because of their larger screens. With this screen size issue now addressed by Apple with the iPhone 6 Plus, it now remains to be seen how much of a barrier iPhone’s significant price premium will have on people switching to it."

Along with Apple's customer loyalty, iPhone trade-in programs to upgrade to the iPhone 6 will fuel shipments into its installed base in the coming quarter and over the holiday season. Though the question begs to be answered – can Apple take market share away from Samsung and other Android smartphone makers?

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