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iPhone is top phone brand in US and China  July 16, 2017 – 08:00 am

iphone-6s-22.jpgThe iPhone is still popular though Apple's latest results paint a bleak picture.

Sarah Tew/CNET

Apple may have reported essentially flat iPhone sales in its quarterly earnings report Tuesday, but the device is still hot in the world's biggest markets, according to new research.

"Apple loyalty in the US is at its highest since 2012, reinforcing the fact that customer retention is not an issue, " Kantar research chief Carolina Milanesi said in a statement. In urban China, Apple took back its position as the most-sold smartphone brand, Kantar's Tamsin Timpson added.

In the US, the iPhone 6S was the most popular model, followed by the Samsung Galaxy S6, and the iPhone 6, a Kantar analyst said. In China, iPhone 6S came in first, followed by iPhone 6S Plus and iPhone 6, she added.

That means consumers tend to choose iPhones over competitive phones coming from Samsung, LG, Motorola and other players in the US. In China, iPhones are outselling devices from local vendors such as Huawei and Xiaomi. So why are things so dour in Apple's kingdom?

Some of gloom stems from Tuesday's earnings report, in which Apple saw iPhone sales essentially flat from a year ago. That was the slowest growth since the company began selling the phones in 2007. Worse, Apple predicted total company revenue would slide next quarter and said that in the March period, iPhone sales are in for their first slump ever.

The smartphone market is seeing weakness born out of saturation, a dearth of buzz-worthy innovations and tougher economic conditions in places like China. Apple is feeling that pain alongside competition from ambitious Android rivals. In other words, Apple's historic sales records are giving way to concerns the company is starting to lose its mojo.

Kantar's report also offered some market share data for smartphone software that seems to substantiate that concern. Android-powered devices continue to gain ground.

In the US, Android's share of the market grew by 11.5 percent last quarter, while Apple's iOS - which powers iPhones - shrunk by 8.6 percent, according to Kantar. In Japan, Android's slice rose by 6.1 percent, while Apple's declined by the same amount. Throughout the European Five (France, Germany, Italy, Spain, UK), Android's share was up by 5.4 percent, while Apple's was down by 3.3 percent. Among the regions tracked by Kantar, only China delivered, with a 5.6 percent rise in the iPhone's market share.

Kantar pointed to specific reasons for Apple's poor performance. The volume of people jumping ship from Android to the iPhone dropped to 11 percent last quarter from 13 percent for the same period in 2014, Milanese said. Further, the "contribution that first-time smartphone buyers make to Apple's overall sales numbers went from 20 percent to 11 percent over that same period, " Milanese added.

The US smartphone market also continues to become saturated with fewer first-time buyers. As the number of potential new buyers declines, Android offers a more tempting environment with a wider-priced range of phones. In contrast, the iPhone remains a premium-priced device.


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