"Apple has become a victim of its own success,” Technology Business Research senior analyst, Jack Narcotta, said.
According to Narcotta, Apple’s “largely iterative updates” to Mac PCs and the iPhone are due to the world’s most valuable company perceiving a "lack of true competition" in its target markets.
Consequently, this has provided competing mobile device vendors such as Huawei, Samsung, OPPO and vivo, and PC OEMs such as Asus, Dell and HP with opportunities to loosen Apple’s grip on the premium device segment, the most coveted as it generates greater profits.
“Apple’s addressable markets, and the company’s revenue and profits, are shrinking as sales of hundreds of millions of entry-level and midrange Android smartphones and resurgence in Windows premium consumer PC demand weaken Mac PC and iPhone demand,” Narcotta explained.
iPhone
For Narcotta, the iPhone remains “at the nexus of Apple’s current and future ambitions”, yet key challenges remain.
Presented by the hundreds of millions of iPhone customers keeping older iPhones longer, Narcotta believes such customer behaviour has subsequently stunted the one- to two-year upgrade cycle that drove most of Apple’s prior growth.
Apple CEO, Tim Cook, would argue however that iPhone revenue and profit volume still surpassed that of its competitors.
Specifically, the company’s Services segment revenue climbed 24.4 per cent year-to-year to $US6.3 billion, because of Apple’s commitment to greater monetisation of iPhone user engagement.
