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Apple hit with first double-digit drop in iPhone sales

Smartphone market saturation in developed countries blamed for fall in demand for Apple devices

Apple saw its first ever double-digit drop in year-on-year iPhone sales during the first quarter of 2016, on the back of weakening demand for smartphones in developed markets.

According to Gartner’s latest worldwide smartphone market tracker, iPhone sales were down 14% on the previous year during the first quarter, despite efforts by Apple to encourage users to upgrade to the latest version of its devices.

This saw the consumer electronics giant roll-out an upgrade programme in the US, its largest smartphone market.

Apple posted its latest set of financial results in April 2016, which painted a similar picture of how demand for the firm’s smartphones is falling, with the firm posting details of its first drop in iPhone sales.

Sales of the devices were down 16% on the previous year, while the number of iPads it sold declined 19%, year-on-year.  

Apple aside, worldwide smartphone sales were up 3.9% on 2015, with a total of 349 million units shifted. Overall, the devices accounted for 78% of all mobile phone sales during the first quarter.

Gartner attributed the growth in sales to the growing demand for low-cost devices in emerging markets, as well as 4G-led sales promotions in certain territories.

Anshul Gupta, research director at Gartner, said: “In a slowing smartphone market where large vendors are experiencing growth saturation, emerging brands are disrupting existing brands’ long-standing business models. With such changing smartphone market dynamics, Chinese brands are emerging as the new top global brands.”

Gupta pointed to the fact that Chinese smartphone manufacturers now hold three places in the global top five smartphone rankings, up from two a year ago.

Samsung, meanwhile, managed to extend its lead over Apple in the smartphone market in the first quarter, with Gartner citing the brand’s ability to pick up sales within both emerging and more developed countries. Samsung led the market with 23% share, while Apple was second with 14.8%. 

“Samsung’s Galaxy S7 series phones and renewed portfolio positioned it as a strong competitor in the market, and more so in the emerging markets where it has been facing fierce competition from local manufacturers,” said Gupta.

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Welcome to global competition. The battery on my dumb phone died last week. A replacement phone cost less than a new battery. Then looked at the price of second hand smart phones and tablets. If the competition goes for third world reliability (where they cannot afford to upgrade or replace every other year) we can expect to see markets implode.
Inevitable, but stunning nonetheless. People can only be convinced to buy so many Apple iThingies that they don't need before their desk is overrun with last years technologY. Yes, but the new one has a Double Whirlygig for better whatever." 

Everyone (except Apple, it seems) saw this one coming almost from the start. The interesting questions are "What's Next" and "Will it Sell".