According to a report from ABG Sundal Collier, iPhone 5’s lackluster start highlights the trend of “Crowding out” from iPhone 5. The latest iPhone managed to sell 5 million units within the first week, which was about 25 percent more than the numbers registered a year ago for iPhone 4S. The report from ABG Sundal Collier terms the increase in numbers to be “like-for-like” loss of volume share, as the smartphone market also surged by about 40 percent to 45 percent for the same time.
The report found that iPhone’s upgrade cycle is “perceptibly decelerating”, on the assumption “first weekend sales” of the devices are within the Apple community, which was around 3 percent of the existing iPhone users upgraded last weekend. For iPhone 4S, the same stats were around the 7 percent mark. The report also highlights that Apple Inc. (NASDAQ:AAPL)’s Maps, a “premature introduction” from the company, will ultimately “degrade the brand”. The ongoing brawl between Apple Inc. (NASDAQ:AAPL) and Samsung provides a valuable opportunity for Nokia Corporation (NYSE:NOK) to claim back the lost market share. Despite enjoying high popularity, the report states, iPhone is not the “product for the masses”, as it is way too expensive for the majority of the population in the emerging markets. Commenting on Nokia Corporation (NYSE:NOK)’s strategy with Lumia, the report says, the company should aim for new users to compete with Android, and poach on the users of Symbian, the Blackberry, and some other proprietary systems. The report suggests that now is the right time for operators for the creation of a third ecosystem, as “Windows Phone has been resurrected as a viable alternative”, “Samsung faces sales bans”, and “Apple is marred by its Maps disaster.”
According to the report about 15 percent, or around one billion, of the world’s active smartphone users have iPhone. The math behind the number shows that “Apple Inc. (NASDAQ:AAPL) has shipped (sold into the channel) around a quarter of a million iPhones by now. Of these, atleast 100m, i.e. 40%, are not likely to be in active use: a large proportion of iPhone fans upgrade through every iteration, some models are kept as memorabilia, others are left in a desk drawer, and quite a few are simply scrapped (due to obsolescence).”
Apple Inc. (NASDAQ:AAPL), which caters to the luxury segment, provides a golden chance for Nokia Corporation (NYSE:NOK) to capture the mass market, set to at least double by 2015. The introduction of the S40 budget model, under the Asha family by Nokia, could take the company’s smartphone volumes upward, and “quite conceivably top the 100m mark already next year” and at the same time, help the handset maker to “leverage its distribution apparatus in emerging markets, fend off Chinese competition, bolster average selling prices, and prepare the ground for Windows Phone 8.”