The smartphone pioneer has traditionally made its home in the consumer space, but why shouldn’t one of the world’s biggest companies target B2B as well? Paul Withers asked the industry just that
The release of the first iPhone in November 2007 heralded a new era in handset manufacturing. It brought true meaning to the phrase ‘game changer’ with its slick operating system and true introduction of applications.
It left rival handset manufacturers trailing. Many of them quickly adopted similar forms.
The likes of Samsung and HTC have reacted quickly with new, comparable devices, using Android. However, the likes of Sony Ericsson, LG and Motorola have all suffered dips, despite their best efforts, Nokia arguably being hit the hardest with its reliance on Symbian.
A recent report from analyst Gartner ranked Apple fourth for global market share, just four years after it entered the market with the original iPhone.
In Q2 2011 it held 4.6 per cent of the market globally, almost double what it held during Q2 2010. LG, with 5.7 per cent global share is now firmly in its sights and Apple is expected to overtake LG by the end of 2011. Its lack of low-end devices will, however, mean the gap between itself and Nokia (22.8 per cent) and Samsung (16.3 per cent) is unlikely to be closed.
Apple’s iOS platform is now third-highest used operating system globally with 18.2 per cent, ahead of RIM (11.7 per cent). Nokia’s Symbian platform has a 22.1 per cent share, while Android, used by multiple manufacturers across different price points, high and low, dominates with 43.4 per cent.
And its decision to focus on the high end of the market continues to bear fruit. The Apple Group earned a £4.52 billion profit in its Q3 ending June 25 – an increase of 125 per cent year-on-year. iPhone sales were up 142 per cent year-on-year during the quarter to reach 20.34 million.
It also sold 9.25 million iPads during the period, representing 14 per cent growth compared to Q2 2010.
UK / B2B
In the UK, recent figures showed Apple held 13.2 per cent of the market, just behind BlackBerry (15.4 per cent) and Nokia (15.7 per cent). Samsung was the outright leader with a 24 per cent share. Apple was also only second behind BlackBerry (27.7 per cent) in smartphone share, with 24.6 per cent of the market.
However, its exact position within the business market remains unclear. BlackBerry is widely seen as the commanding player in the sector, as it has for many years. All manufacturers have stated the importance of taking share in the B2B space, producing handsets and service accordingly.
Apple’s focus on the business market has been minimal at best.
But the announcement made in June regarding the update to its operating system, iOS 5, heavily suggest this could be about to change.
The update, due to go live in the autumn, includes the new iCloud service, which lets users securely sync media, applications such as documents, contacts, calendars and other data across other Apple devices for free. It’s similar to that offered by Microsoft through its 365 product.
The majority of industry personnel we spoke to highlighted security on Apple devices as the major stumbling-block when speaking with customers. RIM has built its brand off the back of high levels of security. Apple doesn’t have this reputation yet.
And, according to those we spoke to, there is a sense Apple cannot be trusted, having recently admitted a “bug” in the software in its devices tracked customer movements. An update has since been offered to remove this.
But perhaps the most defining factor for its lack of activity in B2B is price. The iPhone devices typically cost £450-£500 SIM-free. A high-end BlackBerry will typically cost £100 less and a low end device, such as the 8520 about £300 less. Dealers claim low margins from sales make it impossible to discount. And while consumers appear to be willing to pay for a handset as part of a contract, SMEs are not.
Many dealers claim the majority of iPhones sold with a business contract go to family members rather than staff.
Unconfirmed reports have suggested that a new low-end Apple device, similar to the iPhone 4, will launch before Christmas.
But would a price drop answer its problems? Mobile News asked the industry just what Apple needs to do to succeed in the B2B market.
Full article in Mobile News issue 496 (August 29, 2011).
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