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iPhone 6 unlikely to boost Apple's appeal

Martin Czernowalow
By Martin Czernowalow, Contributor.
Johannesburg, 22 Oct 2014
The latest iPhone handset will not do anything for Apple's local market share, say analysts.
The latest iPhone handset will not do anything for Apple's local market share, say analysts.

SA's mobile operators are gearing up for the local launch of the iPhone 6 and iPhone 6 Plus on Friday, the latest iteration of the iconic and much-anticipated handset from Apple.

According to latest figures, iPhone sales account for half of Apple's business, with US and European orders for the iPhone 6 and 6 Plus, which began in September, helping the company's revenue jump 12.2% in the last quarter, to $42.12 billion.

Reuters reported that despite a heftier price tag, the iPhone's release marks Apple's best product launch on record, pushing overall smartphone sales to 39.27 million in the September quarter. In addition, the new iPhones, which went on sale in China last week, had already surpassed the previous-generation model in terms of volume.

Despite its international popularity, local market analysts are not expecting the new iPhone to be a game-changer for Apple in SA, where it is lagging behind its Android rivals.

BMI-TechKnowledge analyst Brian Neilson says the South African market can expect to see a spike in the uptake of Apple products with the iPhone 6 launch, compared to the usual relatively muted interest in Apple devices in SA. However, it will not be a lasting trend, nor will it make any impact on Apple's market share, he says.

"Apple has fallen back in terms of uptake in SA, but it still has a loyal, but small local following," says Neilson, adding the temporary spike in Apple uptake will reflect a similar global trend. "I expect the handset to be at least as popular in the local market as the previous iPhone models, but the narrow fan base will do nothing to shift Apple's market position."

Neilson states the demographic profile in SA means Apple has a limited reach among local smartphone users, finding popularity in a small subcategory of the upper demographic. "Even among early adopters and techies, I just find SA tends to be less Apple-obsessed."

Refresh rush

Independent analyst Spiwe Chireka agrees that Apple's niche appeal is unlikely to be impacted by the iPhone 6 launch, saying the short refresh cycles of smart devices are likely to cause "gadget fatigue" among consumers.

Apple launched the iPhone 5 locally in December last year, and Chireka says that - coupled with a tough economy - the short refresh cycles could dent demand among consumers. "I think smartphone makers and vendors should become a bit more discerning about how soon they launch new versions of their devices."

She warns the short refresh cycles also mean device makers often release products that do not represent a drastic step forward compared to older versions, and says this is a case in point for the iPhone 6. "I have looked at the new iPhone and I must say that from the iPhone 4 to the iPhone 5 the step was ok, but from the iPhone 5 to the iPhone 6, it was not that great."

While she acknowledges there will always be an uptake among Apple's small local following, the iPhone 6 will not shift Apple's local market position. "Unless Apple does a mass-market approach, the iPhone will remain a premium product."

Both Chireka and Neilson feel Samsung has made a good play for market share in SA, with Neilson pointing out the Korean smartphone maker has outspent everyone in terms of local marketing.

"Samsung is everywhere, and from the way they tackle the market, you certainly get the feeling that anyone can own a Samsung - unlike Apple," says Chireka.

World Wide Worx MD Arthur Goldstuck noted earlier this year that Samsung's salvoes are securing the manufacturer's place in the local high-end market. "Samsung will continue to lead the market at the high end, thanks to a combination of an efficient and predictable release roadmap, compelling devices that lead market demands, and an aggressive roadmap."

Local events

Despite Apple's narrow local appeal, mobile operators are preparing for the South African launch of the iPhone 6 and iPhone 6 Plus. SA's largest mobile operator, Vodacom, will host a midnight event tomorrow that is expected to attract considerable interest.

"We are seeing a lot of excitement around the iPhone, and we expect a lot of people at the event. It is a popular handset, so we do anticipate strong demand," says Vodacom spokesperson Richard Boorman.

Similarly, MTN spokesperson Bridget Bhengu confirms the company will host an event on 24 October to unveil the new Apple product. Meanwhile, Cell C and Telkom have confirmed they will stock the new iPhone 6 from Friday.

The operators are yet to confirm pricing details.

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