Girish
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Apple Inc. (NASDAQ:AAPL) has faced a bumpy road since the launch of the famed iPhone 6s and 6s plus. The tech giant needs to brace for a stormy year ahead after the launch of their latest models as reports show that Apple had to cut iPhone 6s production by a third.
The storm has not yet passed, as a new study conducted by Consumer Intelligence Research Partners (CRIP) claims that Apple experienced a shunted demand for their latest models. CRIP's data claims that the iPhone 6s accounted for 48% of all U.S iPhone sales, during Apple's Fiscal first quarter, ended on December 31, 2015; while the iPhone 6s Plus accounted for 19% of all U.S. iPhone sales. This is considerably lower when compared to the same quarter in 2014 when Apple introduced the then latest model. iPhone 6 and iPhone 6 Plus. Then, the iPhone 6 represented 45% of all iPhone sales in the U.S, while the 6 Plus bagged 30% of the sales.
A smaller combined share of the iPhone 6s models implies that things are not working in the company's favor. Moreover, a larger share of the previous iPhone 6 model indicates that Apple might have to reduce price margins with their next launch. The successor of iPhone 6, though, performed slightly better but the sales share of iPhone 6s Plus were quite a disappointing.
CRIP further adds that the average screen size and storage per device improved by a small factor, whereas retail prices were slightly lower as the sales share of new 6s models was down 7 to 8 points Year-over-Year- which is below historical norms.
There has been a concern that consumers are less enthusiastic about the feature and performance gains with the latest iPhone 6s/6s+ models. Indeed, more consumers appear to be opting for last year's iPhone 6 models that are priced $100 lower.
As a result, the average selling price of the new iPhone models may come down to $662-which turns out to be reportedly lower than what Wall Street's expectations of $680.
Additionally, for the second quarter this year, analysts have predicted iPhone sales of bare 50 million units while the original expectations stood at 55 million units.
In 2014, even though the 5c was deemed to be a 'flop', but surprisingly it witnessed the highest Year-over-Year growth when compared to the older iPhone 4s. The iPhone 5c was aimed at the mid-range market, and apparently even outsold Blackberry, Windows Phone and all other Android flagship in Q4 2014. This was a sign for Apple to introduce more iPhone models in its 'C' range, amongst the growing competition it was facing from players like OnePlus and Xiaomi.
However, a Localytics report last year in September 2015 revealed that the iPhone 6 is the most adopted iPhone model, with a 30% share of all iPhones shipped, just before the launch of the iPhone 6s models. These further points out that consumers in the higher-end segment were longing for an upgrade to a bigger screen size than what the iPhone 5s offered.
But, all hasn't gone well with the 6s series launch, possibly because of increasing competition from Chinese vendors who manufacture high-end phones for a considerably cheaper price. With the rumors of Apple's new 4-inch iPhone model becoming a reality, Apple could get a considerable chunk of the smartphone market this year if the pricing doesn't empty the consumer's pocket.
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