New iPhone? No thanks, say cash-conscious Europeans

Thu Dec 22, 2011 11:58am EST

Luke Peters holds the new iPhone 4S outside the Apple store in Covent Garden, London October 14, 2011. Apple Inc's new iPhone went on sale in stores across the globe on Friday, with fans snapping up the final gadget unveiled during Steve Jobs' lifetime, many buying the phone as a tribute to the former Apple boss.    REUTERS/Suzanne Plunkett

Luke Peters holds the new iPhone 4S outside the Apple store in Covent Garden, London October 14, 2011. Apple Inc's new iPhone went on sale in stores across the globe on Friday, with fans snapping up the final gadget unveiled during Steve Jobs' lifetime, many buying the phone as a tribute to the former Apple boss.

Credit: Reuters/Suzanne Plunkett

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(Reuters) - Weakening economies and falling prices of rival smartphones are hurting sales of Apple iPhones across Europe, data from research firm Kantar Worldpanel ComTech showed on Thursday.

The October roll-out of Apple's iPhone 4S boosted its position in Britain and United States, but the new phones failed to excite interest in continental Europe, where Apple's share of the fast-growing smartphone market slipped.

The smartphone industry is dominated by Google, which has stormed the market with its free Android platform.

"In Great Britain, the U.S. and Australia, Apple's new iPhone continues to fly off the shelf in the run-up to Christmas. However, this trend is far from universal," said Dominic Sunnebo, global consumer insight director.

Apple's market share in the 12 weeks to end-November rose to 36 percent in the United States from 25 percent a year earlier and in Britain to 31 percent from 21 percent, Kantar said.

However, in France its share slipped to 20 percent from 29 percent and in Germany to 22 percent from 27 percent. Similar drops were seen in Italy and Spain.

"The French market is showing increasing signs of price sensitivity," Sunnebo said.

In part, the European sales of the expensive Apple model were hit by weakening economies across the continent.

Euro zone GDP grew just 0.2 percent in the third quarter and most economists expect it to contract in the fourth and also in the first three months of next year, sending the bloc back into recession after its two-year recovery from the worst global financial crisis since the 1930s.

The euro zone's own crisis with government debt has scared off investment and eaten into business and consumer confidence, particularly since August when investors intensified their scrutiny of the bloc's problems.

European consumers are keeping a lid on their expenses as government spending cuts and job losses deprive companies of demand for goods and crush exports.

Google had market shares of between 46 and 61 percent in all markets. Cellphone makers like Samsung Electronics, Sony Ericsson, LG Ericsson and Motorola Mobility all use its Android platform in their phones.

"In Germany, Android achieved a dominant 61 percent share of smartphone sales in the latest 12 weeks, with the Samsung Galaxy S II the top selling handset," Sunnebo said.

(Reporting By Tarmo Virki; Editing by Jodie Ginsberg)

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Comments (27)
PACoug wrote:
I always giggle when I see sales figures of iPhones compared to those of “Android.” As far as I know, “Android” doesn’t make a phone. There are Android phones from various manufacturers, like Samsung, HTC, Motorola, etc.

The market-share comparison needs to be between actual phone manufacturers to have any meaning whatsoever.

iOS has enough market share between the iPhone, iTouch and iPad that it is self-sustaining and completely independent of what Android as a platform is doing. Different devices run such radically different builds of what is generically termed “Android” that they are incompatible with each other and are only lumped into the same market category to feign some kind of market domination.

The world is becoming more price sensitive as economies tumble. I’m quite sure we won’t see this level of prosperity for many moons hence. If the past is any guide, Apple won’t modify its price strategy to line up with market reality–and their profits will suffer as a result. However, that could still be the right move. Yes, the iPhone is expensive, but not that much more than an Android attempt at equivalence. More than half of Android owners intend to migrate to iPhone when their current contract expires. Less than 20 percent of iPhone owners intend to migrate to a different smartphone platform.

The reason Android has such a large market share is summed up in a single category: first-time smartphone buyers. A huge number of those go for the low-cost option, but will step up to an iPhone when upgrade time rolls around.

Dec 22, 2011 8:33am EST  --  Report as abuse
FBreughel1 wrote:
If the author thinks this is temporarily and dependant on the economic climate, let me give you these numbers again to show the main cultural difference when it comes to spending:

Net savings rates households 2003-2008 (OECD)in %
United States 3,8 3,4 1,5 2,5 1,7 2,7
United Kingdom 0,4 -1,7 -1,3 -2,9 -4,3 -4,5
Euro area 9,4 9,3 8,6 8,2 8,3 8,9
Italy 10,3 10,2 9,9 9,1 8,2 8,6

Brits and Americans women have been putting themselves into personal debt to buy stuff they can’t afford. Europeans ladies – on average – don’t do stuff like this. Having multiple credit cards is not common practise here. I included Italians to show – again – that even they are responsible when it comes to personal finances and save around 10 %.

With the mark-up on the iPhone it just wasn’t go to work. Europeans ladies know it will be in the shops for half the price in 2012 when a “new” model appears. Then they will buy it.

Dec 22, 2011 8:36am EST  --  Report as abuse
scythe wrote:
cash-strapped? don’t fool yourself

android – open source

iphone – cannot replace battery, key logging, tracking robot

open source, as in libreoffice versus oracle

Dec 22, 2011 8:40am EST  --  Report as abuse
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