The Apple / Samsung battle for smartphone domination is starting to mirror the foment surrounding the movie industry’s opening weekend box office tallies. How did you open? Well for Apple, the opening weekend for the iPhone 5s and 5c was a blockbuster. Nine million units sold.
Big Weekends or Big Portfolios
Samsung’s flagship smartphone the Galaxy S4 took close to a month to sell 10 million units. That was about 25 days faster than its predecessor, the Galaxy SIII, but still a far cry from a little more than a weekend.
To be fair, Apple is counting sales of both its high-end 5s model and its slightly lower priced 5c models. As a result, it is an apples to oranges comparison on some level. With that said, last year’s iPhone 5 opening weekend sales tallied 5 million units, so it would seem that the dual phone release strategy has its merits to the tune of 4 million incremental units. There is little doubt that scarcity of 5s models has helped boost 5c sales. That is a sales innovation if not a technical one. It is a strategy optimized for a big opening weekend. You could say Samsung reduces this opportunity by opting for a big portfolio of products that spread out is sales among more devices launches.
Apple is far from dead
It is fashionable these days to herald the end of Apple. This is no surprise. If you are a professional prognosticator you are rewarded for making outlandish predictions. If the predictions don’t come true, people generally forget them. If they do come true, you are heralded as a sage.
What is clearly different from three years ago is that Apple is losing smartphone market share and that decline is rushing into tablets as well. On the positive front, it still accounts for the highest margin products, most of the industry profits and tablet market share. All of these add up to a formidable market position that consumers seem happy to reinforce with each new product launch. When it comes to many usage metrics, even a small slice of Apple pie appears to have much more punch that large slices of unprofitable masses.
The question for Apple is, “What’s next?” Since it has adopted a high-end of market strategy, it must invent to grow. It can milk a large slice of the mobile device market that it largely created while new entrants whittle away at its share. As these markets mature there is no market share to grab, so it must append new markets to its existing portfolio. iWatch? Apple TV? It’s hard to see any of those coming close to the iPhone 5s/c opening weekend. As a result, the iPhone is still Apple’s core franchise and it appears to have some life left in it.