Apple's greatest weakness: iPhone continues to underperform the market as a whole

Photo: Mark Kolbe/Getty Images

Apple may have the single best-selling smartphone model in the world, but there is one aspect of its business that you’ll never hear CEO Tim Cook mention: The fact that iPhone sales consistently underperform the global market as a whole. iPhone may be the most popular single phone but it is cheaper Android phones that are 88% of all phones sold.

Generally, iPhone sales roughly track the market. But the global smartphone market is approaching saturation, and growth is slowing. That’s a problem for Apple, because since 2012 the iPhone has underperformed the rest of the market.

UBS analysts Steven Milunovich and Benjamin Wilson crunched some data from Gartner on smartphone sales and published this set of charts showing where Apple is making gains and where it’s losing.

  • The good news: Apple is out-performing the market in the US, Europe and Japan.
  • The bad news: Apple’s sales are still in decline in the US, and doing worse than everyone else in China.

UBS says: 'Global premium phone shipments were down 4% for Apple's F16, with Apple underperforming the market at down 8%.'


'The US premium smartphone market declined by 11% in F16. Apple slightly outperformed the market with units down 10%.'


'Total shipments to China declined by 18% in F16.' ... 'The premium smartphone market in China was down 3%. Apple significantly underperformed the market with units down 18%, losing 10 points of share to domestic smartphone makers Huawei, Oppo, and Vivo.'


'The premium smartphone market was flat in Europe. Apple grew 2%, improving its market share to 40% from 39%.'


'The premium smartphone market was down 13% in F16 but returned to growth in the Sep quarter. iPhone was down 3% for the year, outperforming the market each quarter.'


'The premium smartphone market slowed from 19% growth in F15 to 1% in F16. Apple continued to outperform the market by growing 4%, but its edge on the competition appears to be waning.'


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