The White Apple Is Becoming A Little Bit More Red

While rumors about the upcoming announcements from Cupertino are circulating among consumers around the world, Apple, Inc. has published its results for the second quarter of 2012. Some results came in below the forecast (and there was some corresponding pressure on Apple’s value on the stock exchange over the last few days as a result), but other categories are showing some impressive trends, and also some simple evidence that sometimes Apple’s marketing’s gurus incredibly forget to consider.
Indeed Apple’s global turnover continues to rise by double digits, even if less than expected, and it’s easy to note the impressive trend in China, now confirmed to be Apple’s second market with a 20% share. Revenue in China jumped 48% yoy, more than double of the rate of Apple’s worldwide revenues. iPhone sales jumped 100% yoy in the last quarter, after a new Apple partnership with China Unicom and China Telecom launched the latest iPhone 4S in the country. Sales of the iPhone are expected to rise further thanks to a collaboration with China Mobile, the world’s biggest mobile carrier by subscriber base. All of this means that the Apple’s marketing policy and sales strategy in China continues to be a successful one, and the status of being an Apple user and consumer continues to have a strong appeal among the Chinese, but there are two points that need to be considered for the future.
First of all, Apple’s competitors are gaining ground and in some cases overtaking Apple’s trend (not in absolute figures of course but it can be considered an alarming signal). There were some initial positions that were inside the manufacturing process of Apple products (Samsung is a supplier of Apple, for example), but from that initial “win to win” position, the moment is fast approaching when these companies will become real competitors on the final market. This means that soon Apple needs to consider again its manufactured supply chain around Asia.
The second point has had an overall sensible impact around the world, and is about the commercial strategy of introducing new products that have no actual “tangible” improvement over older versions. Whether it is true or just perceived as true by the consumers (there is no difference between reality and the perceived reality), it can cause a “waiting for the real new next one” phenomena. The iPhone 4S is a prime example: there was no significant difference between the 4 and 4S series, and the 4S launch was relatively close to the coming iPhone 5 introduction. As a result, many consumers remained with their 4 and waited for the 5, renouncing the “little news” of the 4S. When this situation happens on the broader market (similar examples can be seen in the car industry), it is a strong signal that there is a share of brand devoted consumers, but this share cannot be considered as a permanent customer base, because the consumers ultimately have the power of choice, and that can be lured away by more attractive offerings from competitors.
As Apple continues to be the leader in the market and its colour continues to become a little more red (China is the most strategic market for Apple’s future fortunes), worldwide attention is now focused on the coming autumnal news. There will be the introduction of the first new model after the Steve Jobs age, and this will be a fundamental moment in the new life of the most famous apple in the world. The iPhone 5 needs to consolidate and eventually to increase Apple’s current advantage over the market. Overall it will be a new challenge for the followers, and Apple will remark that the others will be always just that, followers: at Cupertino they dream that the future will always be in the shape of an apple, a little bit more red, but always an apple.