Old wine, new bottle: ‘Formulaic’ iPhone has investors worried as customers switch to Samsung, Huawei

In a surprising turn of events for tech giant Apple, the iPhone 15 is facing significant criticism and lacklustre sales, prompting a 3.6 per cent dip in the company’s shares. Some industry analysts are even dubbing the iPhone 15 as potentially ’the biggest flop in Apple’s history,’ as per a report by The Daily Mail. The once-dominant force in the smartphone market seems to be losing its grip, as customers reportedly shift allegiance to rivals Samsung and Huawei. Barclays analyst Tim Long downgraded Apple’s stock rating to ‘underweight,’ advising investors to reduce their holdings due to anticipated continued weak sales, not only for the iPhone 15 but also for other Apple hardware. Globally, Samsung remains Apple’s main competitor in the premium smartphone market, with its focus on foldable devices potentially luring consumers away. Counterpoint Research reports a decline in Apple’s global market share from 75 per cent to 71 per cent in 2023, while Samsung and Huawei see increases. This is particularly disconcerting for Apple, considering how it has expanded its presence in countries like India, both in terms of manufacturing and in terms of offering sales and other services. The decline in iPhone sales has been particularly noticeable in China, where local competitor Huawei has made a resurgence with the release of the Mate 60 Pro, as reported by Reuters. According to market estimates, Apple’s iPhone sales dropped from 240 million in 2021 to 225.3 million in 2022 and are expected to further decrease to 215 million in 2023. Experts attribute this decline to a perception that Apple’s recent smartphone models, including the iPhone 15, have fallen behind competitors in terms of innovation. Uswitch.com’s mobile expert, Ru Bhikha, notes that while the iPhone 15 showed gradual improvements, consumers are seeking more innovative and unique experiences offered by other brands. Dr Bipin Patel, CEO of electronRX, adds that Apple is struggling to keep pace with the growth of Samsung and Huawei. The sentiment is echoed by Paolo Pescatore of PP Foresight, who suggests that users may be holding onto their older devices for longer, viewing the incremental changes in the iPhone 15 as insufficient motivation to upgrade. Despite these challenges, some analysts believe that Apple remains a formidable competitor in the smartphone market. Ben Wood, chief analyst at CCS Insight, argues that Apple’s slowing iPhone sales are more a result of users holding onto their existing devices rather than a shift to alternative brands. He emphasizes Apple’s strong position, backed by unwavering loyalty from existing customers. Looking ahead, industry insiders anticipate the release of Apple’s Vision Pro mixed reality headset in early 2024, potentially stealing the spotlight from the next iPhone. Apple insider Mark Gurman suggests that, despite anticipated minor changes to the upcoming iPhone, the wearables business, including Vision Pro, AirPods, and Apple Watch, will take centre stage. As Apple grapples with declining iPhone sales and growing competition, the company’s ability to innovate and capture consumer interest will be closely watched in the coming months. (With inputs from agencies)