NEW YORK – Apple will reverse its smartphone market-share decline in the U.S. and abroad in the short term with the launch of its 4.7-inch iPhone 6 and 5.5-inch iPhone 6 Plus, but Apple’s share could resume its slide if the company maintains its premium position in the face of lower priced competition, multiple analysts told TWICE.
The company’s early-2015 entry into the smart-watch market has the potential to energize smart-watch sales, they added, thanks to the Apple Watch’s jewelry-like design, watch-like digital crown that simplifies the user interface, and a variety of features from mobile payment to built-in sensors and GPS navigation.
“The new products will slow and potentially reverse the share losses for a short period of time in both the U.S. and international markets,” said Gartner’s Van Baker. “That said, the reversal will happen in the high end of the smartphone market. The biggest threat is coming from the midtier of the market from vendors like Xiaomi, which is eroding Samsung share even faster than Apple share with its affordable phones in China.”
Linda Sui, director of wireless smartphone strategies at Strategy Analytics, also sees Apple’s share rebounding in the U.S. but agreed “if Apple continues to maintain its premium-only strategy, we believe its market share will continue to fall in global smartphone markets.”
For his part, Frost & Sullivan analyst Todd Day noted, “The thinner and seamless design will help sales, along with the larger 128GB model, because users understand storage space and the advantages of having more of it for apps, movies, games and music.”
As for the Apple Watch, Day said it “may prove to be a very competitive product in the wearables market.” Although the smart-watch concept isn’t new, “Apple releasing one should provide a huge boost to the wearables market,” he said. “Apple has a reputation for making their products and technologies user-friendly and functional. If this holds true ... customers will be lining up to purchase their new wearable product from Apple.”
Matt Wilkins of Strategy Analytics called it a “well-designed device” and said “it is clear they have been looking at the design of traditional wristwatches and not going for something that looks too nerdy.”
Ovum’s Paul Jackson said interchangeable straps and multiple cases and sizes “show they’ve thought more about the fashion and jewelry elements compared to their competitors. This watch, along with the Moto 360 and LG G Watch R, finally offer something non-techies might consider wearing.”