If you haven’t already heard the traumatic news that’s graced the world over the past month and a half, Apple’s stock has crashed dramatically. The first signs of the crash began in late November with the most recent motherload crash of 10% just a few weeks ago.
The 10% crash was due to the release of Apple’s quarterly report that showed that the quarters revenue was significantly below what was forecasted. The reason for the drop? China.
China and Apple
Many of you may not know, but China has recently placed bans on certain iPhone model. These bans have caused iPhone sales to drop dramatically in China. This accompanied by the iPhones wildly ridiculous price in a declining Chinese economy, has caused a 10 million drop in sales volume.
iPhone sales as a whole dropped by 7% compared to 2017 values declining production volume by 3%. Production volume is predicted to fall to 189 million units in 2019 according to TrendForce.
If they’re not buying Apple, what are they buying?
While the American social battle between iPhone and Android users is still as fiery as ever, the iPhone is predicted to give up its international contending position to Huawei.
As you can see from the chart below, Samsung is by far the international leader in smartphone production and sales. While the iPhone has thus far held onto its second place position ever since the invention of the smartphone, it’s predicted that it will be yielding to Huawei in 2019.
While Huawei has yet to gain any real popularity in the US and is controversial at best, internationally it’s been gaining popularity. A Huawei smartphone is typically substantially cheaper than an iPhone or a Samsung and features the advantage of self developed chips.
In 2018, Huawei produced 205 million units which is already significantly above what Apple is forecasted to produce in 2019.
Will Samsung Stay?
For all of you Android lovers out there, there’s no need to worry that Samsung will be losing its dominance any time soon. While Samsung has recorded losses in 2018 much like Apple, it’s still predicted that Samsung will continue to control at least 20% of the market.
Samsung’s prices for their Galaxy smartphones are still to high for China’s economic decline but its expected that Samsung will find some way to adapt to the changing market. One potential strategy is to develop a different set of specifications for the Chinese market to help lower the production price.
Is Apple going to Die?
Unfortunately for us android lovers, just because iPhone sales are down it doesn’t mean Apple as a company is going anywhere anytime soon.
Apple initially gained popularity as a company because of Mac and the laterly developed iPod. While these were both initially huge revenue generators, the market has changed. IPods have been replaced by smartphones and Apple’s biggest revenue stream is what they now call ‘wearables’.
Wearables include the Apple Watch and Airpods amongst others. Apple’s CEO Tim Cook states
“On a trailing basis, … the revenue for wearables is already 50 percent more than iPod was at its peak.”
While Apple’s stock is still struggling to recover from its 10% loss, the potential release of new airpods holds great promise for the company.