In the second half of last year, the mobile phone market experienced a sudden change. Whether the iPhone sells well or not has become a topic of great concern to everyone. IDC announced global smartphone shipments in the fourth quarter and the full year last year. With an 11.6% shipment growth in the fourth quarter, Apple overtook Samsung in full-year shipments for the first time.
In the first three quarters, Samsung lowered its shipment target due to the rapid decline in shipments. Many mainstream institutions were optimistic that Apple would officially become the "King of Devices" this year. Every time a new phone is released in the fall, the iPhone will dominate.
However, the iPhone 15 encountered headwinds in the fourth quarter.
Huawei's strong return has injected a strong competitive force into the high-end machine market; Xiaomi 13 and 14's share in the high-price segment has grown rapidly; OPPO and vivo have launched folding screens and large models; Honor, which operates independently, has maintained quarter-on-quarter growth in the first three quarters...
The price of iPhone 15 has dropped from the launch day, to price reduction promotions on e-commerce platforms, to the price reduction of the entire series on the official website, and with the preferential means of trade-in and interest-free installment, the cheaper it sells, the more it seems that the iPhone cannot be sold anymore.
At the beginning of the year, Apple's stock price also suffered a continuous decline, with its market value evaporating by 1.7 trillion yuan in one month. Yesterday, Tmall and JD.com continued their efforts. The entire iPhone 15 series was discounted by 1,000 yuan, and the obtained price has dropped below 5,000 yuan, which is even greater than the discount on the official website.
The market does not seem to recognize Apple's performance last year. Competition in the high-end mobile phone market has intensified, and pessimistic expectations for the shipments of the 15 series have caused many institutions to downgrade their ratings.
Can Apple secure its position as the mobile phone leader?
01
The stock broke on the first day, and the price was actively reduced.
What I didn't expect was that the iPhone 15 had just been released, and the price dropped much faster than everyone expected.
On the day of the launch, news of a "break" came from third-party channels. The quotes from multiple third-party channels in Shenzhen Huaqiangbei were lower than the official website quotes. The popular Pro series at the time still maintained a premium.
According to data tracking by market research organization Counterpoint, within 17 days after the release of iPhone 15, sales dropped by 4.5% compared with iPhone 14. iPhone 14 has also declined compared with iPhone 13, and has become worse than the previous generation.
Moreover, less than a month after it was launched, the global shipping time of 15 has been reduced to 15 days. According to the product inventory tracker of financial company J.P. Morgan, the delivery time of the entire iPhone 15 series has continued to shorten for two consecutive weeks.
On October 23 last year, in order to welcome Double Eleven, the entire iPhone 15 series on the e-commerce platform was discounted.
During Double Eleven, at Apple’s self-operated flagship store on JD.com, the entry-level product is discounted by 801 yuan with coupons, and the Pro version is discounted by up to 600 yuan. Despite the bleeding price cuts, fortunately it has won many lists.
Four of the top five models in JD.com’s cumulative single product sales list during Double 11 are iPhones. After releasing the third quarter financial report, Cook said cheerfully, "The sales of 15 are actually better than 14, and our Pro series is not enough to ship."
However, data from market research organization BCI shows that in November after the release of iPhone 15, although Apple ranked first in the high-end mobile phone market with a price of more than 4,000 yuan, accounting for more than 50% of the market share, its market share fell by 21.2% year-on-year.
Across 2023, the iPhone has suffered an even greater blow.
Analysts at Wall Street investment bank Jefferies said in a report,In the first week of 2024, Apple’s iPhone sales in China dropped by 30%.
Also showing weakness is Apple's performance in the capital market. After several major investment banks lowered their shipment forecasts, Apple's stock price fell by 5.9% in the first trading week of 2024, and its market value evaporated by more than 100 billion US dollars. For the first time since November 21, it was surpassed by Microsoft, which had successfully turned around with AI.
UBS Securities stated that due to factors such as the lack of competitiveness of the iPhone 15 itself, it has decided to lower the shipment volume of the new iPhone 15 series from 80-90 million units to 78 million units, which is lower than the 90 million units of the iPhone 14.
There are overwhelming voices of bad-mouthing. Is Apple’s adjustment a foolish move, or is it adaptable?
This price reduction on the official website is a limited-time discount for the Chinese New Year event. Most Apple products can enjoy discounts. Among them, iPhone15 series, iPhone14, iPhone14Plus or iPhone13 can save up to 500 yuan.
The reason why it is surprising is that this time it is not a price reduction promotion by channel dealers and third-party e-commerce platforms, but an official price reduction by Apple, followed by price reductions for the entire series, including Apple's high-end Pro series, which has been selling well.
However, judging from the extent of the price reduction and the preferential conditions, it is still more form than substance, and netizens have complained a lot.
There are two main points of dissatisfaction. One is that the discount range is not as good as that of third-party platforms, and the other is that it is limited.
Each customer is limited to purchasing 2 pieces of each product category. The number of products that can participate in this promotion in Apple Store retail stores is limited and while supplies last.
On the other hand, major e-commerce platforms have gone to great lengths to match orders, and have given even greater discounts to the Pro series.
Combining different offers and discounts, the price reduction of the 15 series on Pinduoduo has reached 16%. For example, Pinduoduo’s discount on the iPhone 15 Pro Max model is as high as 1,771 yuan.
The reason for Apple's proactive price reduction promotion may be that the previous shortage of Pro series products has been alleviated. As Cook said during the last financial reporting season, supply and demand will strive to reach a balance by the end of the fourth quarter, which will leave room for price adjustments.
The same strategy was used after the supply was restored in February last year. Apple lowered the channel price of 14 Pro & Pro Max from February 5 to April 1, which lasted longer. The market feedback was good. Compared with other manufacturers who frequently reduced their shipments by more than 10%, Apple only experienced a single-digit decline.
This year’s consumption trend is obvious. People buy things either for cost-effectiveness or for a better experience.
High-end phones are not unaffordable, but Apple is famous for its "toothpaste-squeezing" innovation. Although Apple fans are very loyal to the iPhone, "waiting for the next generation" will naturally become an option. Even if you consider trade-in and interest-free installments, if you can't show greater sincerity in upgrading the experience, the replacement cycle will become longer and longer.
CINNO Research has predicted that last year’s sales of the new generation of iPhone 15 series models may be around 10 million units in 2023, which is a 22% decline in sales compared to the previous generation of iPhone 14 series in the same period.
What's more, the global smartphone market has already peaked, but consumers are willing to spend more money to use better mobile devices. The average selling price of smartphones has maintained a growth trend for four consecutive years. Competition among major manufacturers in the high-end phone market will become increasingly fierce.Apple’s dominance of the high-end market is about to face an unprecedented impact.
02
Domestic manufacturers raid
Last year, major domestic manufacturers launched high-end models to compete for market share. Although global smartphones had already seen the ceiling as early as 2017,Sales of high-end mobile phones with a wholesale price of more than US$600 still grew by 6%, accounting for nearly a quarter, and revenue accounted for 60%.Compared with 2017, there has been a switch several times.
Apple’s main competitor in the high-end mobile phone market is, first of all, Huawei. Huawei's smartphone market share in China has reached 46% in 2020. Last year's return will undoubtedly give Apple a heavy blow.
In November after the official launch of Mate60, according to BCI data, the number of activations of Huawei's new machines increased by 75.6% year-on-year to 4.014 million units. In the market range above 4,000 yuan, Huawei's market share was approximately 22.3%, a year-on-year increase of 8.8%, second only to Apple.
Other manufacturers are no less generous. Xiaomi has launched flagship products such as the 13Ultra and 14 series, OPPO has launched high-end models such as the OPPO Find N3, Find
According to media reports such as Mobile China and Southern+, Xiaomi and Huawei's mobile phone sales in the Chinese market surged by 38.4% and 79.3% respectively in the fourth quarter of 2023.
Compared with 2022, Apple's share of the high-end market fell by 4% last year, and the shares of other manufacturers Samsung, Huawei, and Xiaomi have increased accordingly.
The shipment situation of the Double 11 promotion is also a reference. Based on the opinions of many people, high-end phones, especially in the price range above 8,000 yuan, are dominated by Apple; sub-high-end phones and mid-range phones (4,000-7,000 yuan), Huawei (Huawei Mate60 series) and Xiaomi (Xiaomi 14 series) are the main players.
The data shows that the consumer groups of Apple’s high-end mobile phones are quietly diverted to domestic mobile phone brands.
Among them, folding screens are a breakthrough for domestic manufacturers to capture the high-end mobile phone market. Samsung is still the dominant player in folding screens globally, but its market share has continued to decline under the successive impacts of domestic manufacturers.
As the experience of hinges and screens gradually improves, China has rapidly grown into the world's largest folding screen consumer market. Some data predict that the domestic shipments of folding screen mobile phones will account for 30%-40% in 2023.
Last year, China's foldable screen mobile phone shipments in Q2 were approximately 1.26 million units, a year-on-year increase of 173% and a month-on-month increase of 24%. In the domestic market, Huawei ranks first, with a market share of 43% in Q2, followed by OPPO and Vivo in the second tier.
Not only domestically, foldable screen mobile phones are also continuing to be exported overseas. After Honor Magic V2 entered the European market, its market share in the folding screen market increased rapidly, with sales increasing by more than 300% year-on-year in the first three quarters of last year.
OPPO’s first vertical folding screen released in the Southeast Asian market also received good feedback. In the second quarter of last year, OPPO's small folding products accounted for 65% of the local small folding screen market share in Indonesia, 81% in Malaysia, and 53% in Singapore.
Last year, mobile phone manufacturers found a new direction of involution—implanting large AI models into mobile phones.Except for Apple, almost all mainstream manufacturers have announced the latest results on large-scale mobile phone models.
The forms of each AI large model mobile phone are different, with different emphasis on parameters, architecture, etc., but they emphasize the qualitative improvement of the user experience, and their latest flagship mobile phones are equipped with AI large model function.
For example, the "voice summary function" can be fully intelligent and then fully automatic to generate focused and clear summaries and to-do items. The "AIGC elimination function" can not only easily eliminate unwanted people or objects, but also create a pixel-accurate complete original image after elimination, raising imaging technology to a new level.
The "any door" that Lao Luo questioned as plagiarizing Smartisan mobile phone functions comes from Honor's large terminal-side model. If someone sends you an address, you only need to hold down the address information and drag it to the edge. The model can automatically identify the user's intention, so we don't need to switch apps ourselves.
Compared with the previous models of rolling lenses, rolling signals, and rolling screens, AI large models generally hide opportunities for mobile phone manufacturers to stimulate the desire to change phones, and they are also a weight on the high-end mobile phone table.
Even the Galaxy S24 series of mobile phones just released by Samsung, which was surpassed by Apple, integrate Qualcomm’s third-generation Snapdragon 8 chip that can support 10 billion large models, and is equipped with the on-device assistant Galaxy AI.
Now, with the exception of Apple, all mainstream players in the high-end market have devoted themselves to large models, and Apple is on the cusp of launching AI applications next year. The market's interest in Apple's entry into AI models will be even stronger.
According to foreign media reporters, Apple has been quietly developing AI products internally, and has established its own large model framework "Ajax", and has tried to apply it to product functions such as maps and Siri. The iPhone 16 series will also be equipped with a unified 8GB memory chip. In the future, as the demand for terminal AI reasoning increases, mobile phone memory continues to expand is a very certain trend.
03
end
Although gimmicks such as folding screens and large AI models may not be enough to sway Apple's loyal users, including those who continuously replace their iPhones, Apple's brand stickiness is still very strong. With Apple's solid foundation in the high-end market, consumers are actually more worried about whether their wallets will shrink.
For consumers whose replacement cycle lasts as long as 51 weeks, all mobile phone manufacturers are actively looking for the next key to driving the desire to replace their phones.
But for the iPhone itself, there are many directions that Apple can optimize, such as signal, charging speed, battery capacity, etc. Apple's long-term development strategy for its products is based on the integration of user experience and technological development, and is almost unaffected by the influence of rival companies.
The prospect of the next innovative growth point is still unclear. How to hold on to the high-end mobile phone market is Apple's number one problem now.
As the iPhone, which accounts for nearly half of Apple's revenue, the growth in gross profit margin driven by the high-end Pro series has declined. As the competition in the high-end market worsens, Apple has to face the same dilemma as Tesla.