The Competition Has Learned Too Much from Apple

The time of easy sales records is over for Apple. Despite an increase in its profits, the corporation has to accept losses in the smartphone business. Competition from Android has become too strong.

For the first time, Apple is feeling the pressure in the smartphone market: By its earliest quarterly estimates at least, the Californian electronics producer has surpassed its own projections, but they have fallen short of analysts’ expectations.

Sales and profits have indeed increased more than 20 percent to $35 billion, but this success is particularly based on record sales figures of Apple’s iPads 2 and 3. In April, May and June, both versions combined for 17 million over-the-counter sales — an increase of over 80 percent in comparison to the same quarter of last year.

But when it comes to Apple’s biggest seller, the iPhone, the corporation must figure out the reason for the clear 26 percent sales decrease, having only sold 26 million units.

A Victim of its own Nondisclosure Policy

One sure cause of the decrease definitely lies in regular customers’ anticipation. The new mobile operating system, version iOS 6, is already waiting to be released; now buyers and analysts alike are expecting the announcement of a new iPhone 5 by the notoriously silent Californians.

Even though in interviews with analysts about Apple’s quarterly numbers, Apple’s CEO Tim Cook teased about a great product pipeline, Apple must come out with a new device in time for Christmas in order to keep pace with the competition — Apple’s regular customers realize this, and are currently holding off on new purchases.

This is where Apple is becoming a victim of its own nondisclosure policy. If customers knew with certainty that the new iPhone would not appear on the market until later in the year, then perhaps they would be less hesitant.

The Daily Battle for Market Shares

However, the second cause of the decrease in iPhone sales lies in the strengthening competition from Android. In spring 2012, Samsung finally overtook Apple as the biggest smartphone producer, and now the Koreans sell almost twice as many smartphones as Apple. In a plea made public on Monday, Apple is admitting that Samsung’s success is costing Apple substantial sales.

Apple’s lawyers are arguing that the only reason Samsung was able to overtake Apple was because Samsung copied Apple’s innovations; for this reason they are demanding $2.5 billion in damages for sales shortfalls.

Even if Apple should be successful with this line of reasoning, the courts cannot stop the success of hardware producers like Samsung and Google as the distributor of Android software. The time of easy sales records is over. The competition has learned too much from Apple. Now there is a daily battle for market shares.