Apple's Tian Ji horse racing, iPhone 14 inventory may reach 95 million units, domestic brands are under severe pressure

When Apple started playing the Tian Ji horse racing game, the smartphone market immediately felt threatened.

Generally speaking, when the market develops healthily, high, medium and low-end products should all have their place. High-end products earn high gross profit by brand premium; low-end products win by sales volume; mid-end products are somewhere in between the first two, either winning by positioning or by cost-effectiveness.

However, when the market environment changes dramatically, the three levels of products, high, medium and low, will begin to roll in. High-end products will often take the initiative to reduce prices to grab the market share of mid-range products; mid-range products will often reduce production capacity, increase revenue and reduce expenditure to maintain profits; low-end products, if not just needed by consumers, will often gradually decline as the roll intensifies.

The current smartphone market is facing such a disorderly internal situation.

An Apple supplier recently revealed that the iPhone 14 inventory has increased by 5% over the market's previous expectations, reaching 95 million units. In this regard, some industry insiders believe that Apple's purpose in doing so may be to increase sales and further seize the market share of Android phone manufacturers. Just like the strategy followed by Tian Ji's horse racing, Apple will use its high-end products to compete with its competitors' mid-to-high-end products, and carry out a dimensionality reduction attack on the latter at the product level.

Currently, with the increasing inflation pressure in Europe and the United States and the weakening of consumers' expectations for the future, the once rapidly growing global smartphone market has also entered a cold winter. Whether on the consumer side or the production side, the industry is facing tremendous pressure. According to data from Strategy Analytics, global smartphone shipments in Q2 this year were 291 million units, a 7% decrease from the same period last year. Even in my country, which has the most mature smartphone industry chain in the world, smartphone production in the first half of this year also fell by 1.8%.

However, the reason behind Apple's decision to launch a dimensionality reduction attack is not only the market's cold winter, but also the impact of the differentiation of the consumer market.

According to Strategy Analytics, the top five smartphone manufacturers in terms of shipments in Q2 this year are Samsung, Apple, Xiaomi, OPPO and Vivo. Compared with the sharp drop in shipments of Chinese smartphone manufacturers such as Xiaomi in Q2, Samsung and Apple's shipments have grown against the trend in the same period. It is worth mentioning that Apple, which focuses on high-end products, has a global market share of 16.3% in Q2, setting a record for its highest quarterly market share in nearly a decade.

In general, the different performances of different mobile phone manufacturers are largely due to the competitiveness of their own products. Consumers' demand for replacement phones has been suppressed by economic factors, but consumers' enthusiasm for purchasing high-end products has not changed. Taking the iPhone 13 series launched by Apple last year as an example, during JD.com's "618" this year, iPhone 13 sales reached 2.8243 million units, far ahead of domestic mobile phone brands such as Xiaomi, OPPO, vivo and Honor.

At the same time, consumers' enthusiasm for high-end products is also confirmed in Apple's latest quarterly report. Apple's Q3 quarterly financial report shows that the company's iPhone sales were gratifying during the reporting period, achieving revenue of up to US$40.7 billion, accounting for about 49% of Apple's total revenue in the quarter.

Faced with the terrible market situation where global smartphone shipments have declined for three consecutive quarters, it is naturally not easy for the iPhone to contribute so much operating income. Therefore, from the perspective of Apple's performance growth, its approach of increasing iPhone14 inventory and reducing product dimensionality to compete with other mobile phone manufacturers can naturally be understood. However, facing the Tian Ji horse race initiated by Apple, how should other mobile phone manufacturers respond?

search

copy

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.