NOTE: GrowthBeat -- VentureBeat's provocative new marketing-tech event -- is a week away! We've gathered the best and brightest to explore the data, apps, and science of successful marketing. Get the full scoop here, and grab your tickets while they last.
Europeans are losing interest in Apple.
The International Data Corporation (IDC) released a report which found that the Western European mobile phone market shrunk in the first quarter of 2013 due to a slowdown in smartphone shipments.
Apple continues to lose ground while Android continues to “dominate the smartphone landscape.” IDC found that Apple’s iOS dropped to 20 percent market share — a year-over-year drop of 11 percent. Apple shipped 6.2 million devices this quarter, which is down from 7 million at this time last year.
IDC analyst Francisco Jeronimo attributed these trends to the European economic climate. He said the region is now entering the second wave of smartphone adoption, which is primarily motivated by cost. Europe has been “mired in recession” for the past couple years, and consumers are less willing to shell out the big bucks for “fancy gadgets” when they can access the same apps from cheaper devices. People that already have higher-end smartphones are also more prone to holding on them for longer periods of time rather than regularly trading up.
“Most Western European countries experienced a slowdown in smartphone sales as economies deteriorated, with a consequent decline in disposable income for consumers,” the report said. “Mobile operators are also cutting handset subsidies to reduce their costs as revenues decline. In Western Europe, phone makers are facing the most challenging time ever; the economic environment is impacting demand, while users are buying cheaper handsets, which impacts manufacturers margins.”
Smartphone shipments increased by 12 percent year-over-year to 31.6 million devices this quarter, but this is the lowest growth rate this market has seen since 2004. Samsung shipped 14.3 million of those phones, which is more than Apple, Sony, LG and Nokia combined.
This report followed on the heels of another report yesterday which found that Samsung dominates the Indian smartphone market in unit sales as well as value, and Apple didn’t even make the top 5 in the first quarter. India is now the third largest smartphone market in the world and are turning the subcontinent into the “sleeping giant” of smartphone markets. Android has a 90 percent market share.
In the midst of the Apple-obsessed world of Silicon Valley, where people get worked into a tizzy over iOS7 and camp out over night to get the latest iPhone, this is a reminder that iPhones are out of reach for a majority of people around the world. Emerging markets, however, present massive opportunities. When asked about the possibility of making a cheaper iPhone for these consumers, Apple CEO Tim Cook said “the only thing we’ll never do is make a crappy product. That’s the only religion we have: We must do something great.”
He also pointed out that Apple has aggressively lowered prices on products in the past and that it will eventually bring out a less expensive phone without comprising quality. Rumors about the elusive budget iPhone continue to circulate, and last week AppleInsider released a 3D rendering based on leaked blueprint images. The phone is thought to the plastic, although the CEO Chinese company Pegatron — which is handling a portion of the manufacturing — said that the “price is still high.”
In the meantime, Apple’s less expensive competitors are scooping up existing (and future) marketshare around the world.