Think Apple's iPhone empire is collapsing? Don't count on it

Even when Apple is doing great, some people believe the company is in trouble.

Just a few days ago, my colleague Joe Wilcox wrote about the collapse of the iPhone empire, in which he explains how the brand that has made Apple so successful could just as easily fall from grace with consumers. Right now, however, this could not be further from the truth.

More than a quarter of smartphone buyers across Europe have dumped Android smartphones for iPhones in the three months ending July 2015, leading to a boost in market share to 17 per cent, up from 14.5 per cent over the same period a year prior. And Apple has not even launched its new iPhones yet, which could spell even more trouble for premium Android vendors.

But Apple is not the only winner, as Microsoft's Windows Phone has also captured some market share from Android, contributing to the market leader's fall to 71 per cent market share, down from 75.1 per cent a year prior. Windows Phone is up to 11.1 per cent market share in Europe, a rise of 2.4 percentage points from 8.7 per cent in the three months ending July 2014.

This data comes from the latest Kantar Worldpanel ComTech report, which is focused on the five major European markets, namely France, Germany, Great Britain, Italy and Spain, as well as US, China, Australia and Japan.

Apple has lost some ground in US, however, but iPhones have seen their market share increase in the other three markets. The loss in US is of just 1.3 percentage points - to 30.1 per cent share from 31.4 per cent share -- but the gains range from 5.9 percentage points, in China, to 7.9 percentage points, in Australia - Japan comes in the middle, with 6.3 percentage points of growth for iPhones.

And things are far from bad for Apple in US. "The U.S. market continued to be dominated by two players, Apple and Samsung, who together accounted for 64 per cent of all smartphones sold", says Kantar Worldpanel ComTech's Carolina Milanesi. "If share alone was not enough to demonstrate market dominance, our data also shows that these two vendors sold nine of the top ten best-selling smartphones in the three months ending July 2015 - with LG making a cameo appearance in the ranking".

Combined, iPhone 6 and iPhone 6 Plus make up for 24 per cent of all iPhones in use in US and China, giving their successors plenty of room to grow and increase Apple's share in this market.

"Because of the strong demand for the iPhone 6 and 6 Plus, several industry and financial observers have painted a somewhat gloomy picture for Apple’s opportunity in 2016", says Milanesi. "Once we dig into the numbers, however, the future looks far less bleak".

Apple is poised to win on two counts. First, upgrades to iPhone 6 and iPhone 6 Plus, and, second, sales of iPhone 6s and iPhone 6s Plus. Even though both current flagships will be replaced in the lineup, they will continue to contribute a fair amount with regards to sales and market share, as the numbers below suggest.

"I would suggest people pay close attention to the current iPhone 6 and 6 Plus market performance, should the accustomed price drop occur after the September 9 product announcement", says Milanesi. "In the US, 32 per cent of the overall sales of the iPhone 5s were generated after the launch of the iPhone 6". Meanwhile, in China, "36 per cent of total iPhone 5s sales in urban China were made after September 2014".

According to Kantar Worldpanel ComTech, since September 2014, 68 per cent of iPhone users in US have no upgraded to the latest models available, while in China this figure is even higher at 82 per cent. This clearly suggests that there is a huge replacement market which Apple can exploit.

And, if history is of any indication, Apple will announce record sales of its upcoming flagships shortly after going on sale. I struggle to see how the iPhone empire is collapsing. But, if it is, Apple should definitely welcome this potential "disaster".

Photo Credit: alphaspirit/Shutterstock