Apple’s Adaptation

Sep 09 2013, 19:23 IST
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SummaryIncreasing competition seems to forcing Apple to become more fluid in its product designs

Under Steve Jobs, Apple had the luxury of scorning innovations like larger screen size, features the company’s competitors in the smartphone market have been using to differentiate themselves from the iPhone. However, Apple under Tim Cook is in a very different environment. Under Steve Jobs, the iPhone was a revolutionary product that created its own market. Now, however, the competition has caught up, with companies like Samsung, Microsoft and Nokia eating into Apple’s marketshare. Successive iterations of the iPhone have provided only relatively minor improvements, and the phone’s high price has meant that cheaper alternatives have gained substantial traction. In addition, a recent trend in the smartphone market has added to Apple’s slow decline in market share—the rise of phablets (smartphones with screens between 4 and 7 inches). According to IDC, phablet sales have been growing tremendously in the US and Asia. In India, for example, phablet sales grew 17-fold over the last year, now accounting for 30% of all smartphone sales.

It should, then, come as a relief to Apple’s shareholders that the company is reportedly developing an iPhone with a larger screen—between 4.8 and 6 inches. Gone are the days when the market adapted to what Apple did; the roles are now reversed. It may also be time for Apple to introduce a lower-priced iPhone, since it’s the low-end segment that is driving smartphone adoption.

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