iPhone sales declined sharply in the third quarter, says Gartner, despite the successful launch of the models of the iPhone 11.
We’ve seen Canalys, Strategy Analytics, and IHS all conclude that iPhone sales fell year-on-year, with Apple clearly acknowledging that they were, but Gartner says things were even worse than the picture portrayed so far.
The apparent contradiction between Apple’s announcement of record-breaking Q4 earnings (calendar Q3) and estimates of slowing iPhone sales were shocking in some quarters last month.
However, as we noted at the time, this was easily explained.
Gartner reported strong numbers for the models of the iPhone 11, although they did not offset for the decline in older iPhone sales.
Gartner says two factors were at stake. First, a shift from flagship smartphones to mid-range smartphones in consumer demand – an area where Apple is not competing. Even the cheapest models of Apple are well above the mid-tier price range.
Second, 5G is waiting for consumers. Apple has chosen to wait for 5G support until next year, and that doesn’t seem to hurt it too badly. Even where 5G handsets are available from Android brands, Gartner says most are still delaying their purchase until 2020, when 5G coverage is likely to have increased beyond the relatively token service offered so far. A recent report suggested that Apple expects to have a massive impact on demand from its 5G models.
There is optimism about the holiday quarter, with official government figures suggesting that year-on-year iPhone shipments in China grew 6% in September and October, with increases also likely to be seen in other countries, owing in particular to the popularity of the iPhone 11 base model.