Here’s How Apple Could Be Marginalized
Early in its history, Apple had a strong hold on the personal computer market. But the 1980s saw cheaper PCs emerge that took sales from Apple and drove the company to the fringe, making it a “niche player,” a position that Poletti suggested the company could soon occupy once again.
The main risks Poletti identified are the iPhone’s “higher premium prices,” a lack of demand in emerging markets, and iPhone saturation in other markets. Given that emerging markets are some of the fastest growing markets for smartphones and that the average selling price in those markets tends to be well below the cost of an iPhone, Apple may be in trouble in those locations even if it does boost its presence.
On the other hand, Google’s Android has been successfully hitting numerous price points and spreading to a variety of different markets, filling the low price-point and emerging market gaps left open by Apple. Emerging markets present an opportunity for Android to boost its presence even further — it has already topped Apple, grabbing 69 percent of sales in the global smartphone market in 2012, compared to Apple’s 19 percent…
Apple may have trouble resolving its position in the coming months, as no new products have come out recently, and the next iPhone is expected to simply be a refresh — which may have trouble competing with other smartphones that have increasingly larger screen sizes.
Even with a low-cost iPhone — which analysts expect Apple to launch — the predicted price of $350 to $450 might not be enough for Apple to truly expand its global positioning; in many other markets, including most of Asia, Latin America, and Eastern Europe, average sales prices are less than $200, with many falling below even $100. This would make a cheaper iPhone still too expensive to compete.
In the second half of the year, expected new products from Apple could potentially help the company turn around its shares and improve negative analyst opinion, but if the new products fail to wow consumers, the company’s slide could continue on the stock chart and in the global market.
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