Rising Sales of iPhone 7 Is Helping Apple Win Back Lost Ground [REPORT]

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Android has been dominating the smartphone OS market with nearly 85% of the market share in 2016. For the last few years, Android has further strengthened its smartphone market share as iOS from Apple Inc. (NASDAQ:AAPL) has been losing grounds. However, looks like Apple iOS is all set to reclaim its lost market in the smartphone segment. In a recent report from Kantar World Panel, Apple iOS has witnessed a positive YoY growth in smartphone sales for the three months ending October 2016. This growth is witnessed in most of the regions except Germany and Urban China.

So, what has helped Apple to bounce back and register a positive growth in Smartphone OS market after a long time? The credit goes to the latest iPhone 7 and 7 Plus.

Sales of iPhone 7: Apple’s Smartphone Market Presence is Strengthening

Among all the regions that witnessed the strong sales of iPhone (Smartphone iOS sales share) during the 3-months ending October 2016, Japan tops the list with 51.7% share. The sales jumped up by 1.4% point during the period compared to the same period a year ago. Japan is closely followed by Great Britain, USA and Australia with 44%, 40.5%, and 39.3% of smartphone OS sales share, respectively.

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In a competitive market, it is the growth rate that matters the most for any brand. And for Apple iPhone, it was much needed. The US witnessed the highest year-over-year growth at 7% point in Apple iPhone sales during the said three months in 2016. Australia, Japan and EU5 each recorded a positive 1.4% point year-over-year growth. Probably it is the first time in the last two years when the Apple recorded some positive growth in all of these regions, while the sales declined in China and Germany.

Premium smartphones mostly drive the smartphone market in the USA. This could be a reason Android OS sales in the country has declined by 5.6% point. Despite extreme criticism for not innovating iPhone enough in the last two years, Apple has squeezed the gap with Android in the last 12 months. During the 3-month period ending in October 2015, more than 3 out of every 5 smartphones sold in the US were powered by Android. Fast forward 12 months, less than 3 out of every 5 smartphones sold during the 3-months were Android powered. The difference between the sales share of iOS smartphone and Android Smartphones decreased from 30% point in Oct. 2015 to 17.4% point in Oct. 2016, which is almost half. The changing market equation in the US clearly indicates smartphone buyers in the US are leaning back towards Apple iPhone.

Apple’s Daring Stance with the Headphone Jack

Apple made a daring move by removing the headphone jack from iPhone 7 and 7 Plus, which was criticised, globally. However, the growth rate indicates that it wasn’t really an issue for the US iPhone customers. During the three months ending in October 2016, around three iOS devices made to the top four positions in the list of top-selling smartphones in the USA. iPhone 7 was the highest selling smartphone in the USA, attaining 10.6% of the total smartphone sales. iPhone 7 Plus stood at the fourth position with 5.3% share, just behind iPhone 6s and Samsung Galaxy S7.

Google and China: Potential Threat to iPhone

Google’s newly launched Pixel Phones captured 0.5% share of the total smartphone sales in a span of just ten days. Considering the pace at which Pixel Phones are gaining popularity, it could pose a major threat to Apple in several markets.

Chinese smartphone market has never favoured iOS devices. Chinese OEMs like Huawei, Oppo, Xiaomi and Vivo continue to provide consumers with a variety of smartphones at a highly competitive price. As a consequence, Apple iPhone sales share has taken a hit in the world’s largest smartphone market, China.

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In China, iPhone sales declined by 5.4% point from 22.5% in three months ending in October 2015 to 17.1% during the same period in 2016. Amidst the declining share, iPhone 7 still came out as the second best selling smartphone with 3.8% share of overall smartphone sales in Urban China, followed by Oppo’s R9. iPhone 7 Plus even made it to the list of the ten top-selling smartphones with 1.9% share.

Japan is the only country where the iPhone sales have beaten Android smartphones sales. During the three months ending in October 2016, Apple iOS captured a major 51.7% share of all smartphone sales. Compared to this, Android accounted for 47.5% of all sales in Japan. This indicates that the smartphone market in Japan is highly driven by premium smartphones, iPhones being the consumers’ favourite. Android sales declined by 0.2% point, while iOS sales increased by 1.4% point.

Sales of iPhone 7 in EU5 Market

For the three months ending in October 2016, iOS accounted for almost 21.2% share in sales in Europe’s big five market (EU5). EU5 includes Germany, Great Britain, Italy, France and Spain. Android, on the other hand, had a share of over 75% in this market.

iOS witnessed a positive year-over-year growth across most of the regions in EU5 except Germany where its sales declined by 2.7% point from 19.2% in Oct. 2015 to 16.5% in Oct. 2016. Out of these five regions, iOS holds the highest share in Great Britain, with 44% of smartphone sales and the lowest in Spain, with 7.9% share. In Great Britain, iPhone 7 was the top-selling device, followed by iPhone 6s and iPhone SE at the second and third position, respectively. In the rest of the regions, iPhone 7 was successful in making its spot in the top ten list, except in Spain. Spain has an Android dominated ecosystem with the OS capturing a whopping 91.7% of the total smartphone sales.

Final Takeaways

Looking at the sales performance of iOS devices across all the regions, Apple seems to have a promising market. Even though Apple’s market share is very less compared to that of Android’s, but iPhone 7 made its place in the list of top 10 selling devices, in 9 out of 10 regions. It even gained the top spot in the USA and Great Britain. In China’s smartphone market, even though iOS sales have declined, iPhone 7 captured the second position in the list of top-selling smartphones, along with iPhone 7 Plus which made the top ten list as well. Undoubtedly, the credit for Apple’s reviving market share goes to iPhone 7.

It is next to impossible for Apple to reach Android’s level of penetration since almost all the devices available in the market hosts Android OS. But if we talk about the premium segment, Apple remains unbeatable. Apple launches one smartphone every year with premium pricing, whereas new Android-powered smartphones come up almost every month from multiples OEMs.

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