Smartphone's Soaring Success

9 Oct 2014

The iPhone 6 and iPhone 6 Plus proved to be Apple’s most successful launch ever. Four million were sold in 24 hours and 10 million units were sold within the release weekend.

21 million iPhone 6 and iPhone 6 Plus phones in the launch month of September.

Talk of the newest Apple gadgets dominated Twitter and Facebook. Over 4 million tweets were posted on the day of the release, featuring tweets from celebrities Ellen DeGeneres, Snoop Dogg and Justin Bieber. 

The extent of the hype is uncharacteristic of Apple products. 3 million third generation iPads were sold in their release weekend and 9 million iPhone 5s and 5c were sold in the release weekend.

Yet, iOS (iPhone’s operating system) only comprises 30 percent of Australia’s smart phone market. Android holds the largest share of the market at 60 percent.

Associate Professor of Marketing Jay Weerawardena from The University of Queensland, specialises in innovation-based competitive strategy. Professor Weerawardena believes Apple is dominating the top-tier market for smartphones, explaining this market success.  

“Apple is targeting a very lucrative marketing niche. Their price scheming means they are targeting the top tier market.

“The highly regarded brand value of Apple could have contributed to the iPhone 6 purchase behaviour.”

Professor Weerwardena believes that the iPhone’s success can be attributed to Apple’s culture of innovation, stemming from founder Steve Jobs.

“Steve jobs was a great market driver. He was able to visualise what the market requires. You can’t just push technology to the market.

“If you ask a customer, they can’t visualise these types of products. The development of the iPod is a great example of this.”

A successful marketing ploy that Apple has mastered is patenting. By creating a network of products that work harmoniously together, Apple have drummed up loyalty among their customers, with 85 percent admitting they will be returning to Apple. Throughout Apple’s recent success, Samsung, Australia’s largest Android seller, are in a financial predicament of their own. Their profits are set to experience a 60 percent drop in profit for 2014.

Samsung are losing out in the low-cost smartphone market to brands like Xiaomi and Huawei, who price their handsets around AUD $100-$300.They’re also struggling to penetrate the top tier smart phone market. Their solution for the top tier market, the Galaxy S5, sold 7 million handsets in the first month, placing it behind the iPhone 5c, 5s, 6 and 6 Plus. 

Professor Weerwardena thinks that this decline from Samsung will continue due to a new CEO.

“Last year, Samsung was outselling Apple – they almost became the market leader.

“But this year, Samsung sales have gone down, and they will continue to go down,” he said.

The smartphone market is constantly evolving. Professor Weerwardena thinks it won’t be long until there is another strong contender that will rival iPhone’s stable position in the top tier smartphone market.

“There’s no saying that Apple will have a monopoly over the expensive smartphone market forever.”

The smart phone industry is undergoing many profound changes, partly due to the emergence of handsets under $200 by Xiaomi and Huawei.

The market may be evolving sooner than we know.