Apple it is perhaps one of the most recognized brands in the world Apple is
not just an emblem of capitalism the new digital age and the era of invasion of
smartphones and tablets but it is also a symbol of American economy more than 10
years ago Apple unveiled the iPhone to the world an innovative product that
rendered manual keyboards on phones obsolete it wasn't so long ago that
everybody had BlackBerry's and a physical onboard keyboard at the
beginning many were skeptical of a cell phone with only a digital screen but the
iPhone was quick to erase these doubts the iPhone 3G was a success then
followed by the 4 and 5 and so on each new phone was a new symbol of modernity
and innovation many set out to conquer this new smartphone market such as
Samsung which to this day competes heavily with the iPhone other brands
such as blackberry failed to accept that the market was changing and shrunk to
near obscurity in a relatively short time no more than 15 years
Apple managed to earn billions of dollars with the sales of its
smartphones over the years the iPhone is Apple's cash cow representing more than
70% of their entire income but today Apple seems to be at risk its sales and
income are falling fast the appearance of new brands especially the Chinese
Huawei which threatens the company has produced tensions between the Chinese
and the US government the competition between these two giant companies also
represent the growing economic war between the two most powerful countries
in the world today we will see the rise of Apple the difficulties that currently
faces against China and we will see if it will suffer the same fate as
blackberry let's begin
the last quarter of 2018 seems to be one of the darkest eras ever for Apple the
projected sales of the iPhone were not up to par with their expectations the
results published an early 2019 revealed the magnitude of the fall of the iPhone
a reduction of 15% of revenues last year that decrease in the sale of the iPhone
which Apple depends seventy percent of the revenues on was a major blow to the
company this fall caused apple's total earnings in the quarter between the
months of October and December to decline to twenty billion dollars Apple
shares have lost the third of their value in less than four months but
racing around three hundred and seventy billion dollars and shareholder equity
it seems that there is starting to be a disenchantment of Apple's products and
the eyes of their loyal customers in the first quarter of 2018 Apple sold less
iPhones than in the first quarter of 2017 this is not a good sign as Apple
generally sells more iPhones in the first quarter of the year every passing
year here you can see for example the explosive sales of iPhone since 2009
each year there's always an initial peak which represents the sale of the years
new models however Apple's latest model especially the iPhone 10s have not
reached the number of sales that Apple was hoping for
normally Apple reports its sales every quarter in order to keep the markets
informed most importantly for their shareholders but recently Apple's
president Tim Cook had announced that the company would no longer report their
quarterly sales they have induced more doubts within the company their actions
have shown that their sales have recently been falling and although Apple
has always been interested in the number of units sold what had really fed the
company where the exorbitant prices of their iPhones Apple iPhones especially
lately take advantage of the expectations of consumers by inflating
their prices every single year promising new changes but not many of their
innovations have recently changed the experience in a major way unfortunately
this happens to be the norm for most smartphone companies they release a new
phone every year without failed but lifespan of an average smartphone lasts
longer than this if a new phone was to be released with the lifespan of a
previous smartphone there should be some innovations Apple and other companies
have even been accused of purposely compromising older models through
updates to push sales of their newer models rumors of companies purposely
slowing down their smartphones have always existed
in October of 2018 Italian antitrust officers find Apple and Samsung ten and
five million euros respectively for pressuring the sale of their newer
products by compromising older models with updates back in 2008 the smartphone
market was very limited brands manufacturing East products only
included Nokia blackberry Samsung Apple and LG but today there are countless
brands to choose from from countries all over the world in summary the smartphone
market is currently oversaturated and this over saturation has forced these
brands to lower their prices in order to stay competitive global shipments of
smartphones registered an annual decrease of four percent during the year
2018 this means that it is the first time that sales do not register an
increase but even until today high-end smartphones such as the iPhone or the
Samsung Galaxy has prices that exceed a thousand US dollars the high prices of
iPhones do not directly reflect the cost it takes to produce them the prices are
increased in order to make a larger margin of profit and these prices are
part of a marketing strategy in order to demonstrate that they are indeed
quote-unquote high quality Apple is famously known for producing their
products in China and more specifically at the Foxconn Factory the main
manufacturing location where all Apple smartphones are produced at Foxconn the
working conditions are so precarious that the company has set in place
anti-suicide netting so that Chinese workers do not take their own lives due
to the atrocious conditions in the workplace u.s. president Donald Trump
had declared the campaign that he would make the largest American companies
returned stateside and produce their products domestically in one of these
statements he has stated that Tim Cook was a great friend of his and that he
advised him to produce iPhones in California and not China the thing is it
is much cheaper for Apple to manufacture the product in China and companies such
as Foxconn already provides the installed infrastructure even so
yielding to political and economic pressure by the white house Apple and
Foxconn had promised to invest 10 billion US dollars in Wisconsin
employing more than 13,000 people the state of Wisconsin had reached an
agreement with Foxconn through which the company would receive subsidies between
three and four point eight billion u.s. dollars which would have been by far the
largest subsidy ever granted to a foreign company in the history of the
United States however the company has announced that they will not follow
through the of the factory citing the high cost of
the American workforce President Trump spoke with the president of the
Taiwanese company Foxconn and apparently had reached an agreement in which
Foxconn will finally continue with the construction of the factory but on a
much smaller scale although almost all of Apple's production is concentrated in
China the country is also an important market
for the American company since 20 percent of their sales come from that
country the Chinese economy has been slowing down over the years as its
economy is going through a transformation from a manufacturing and
exporting economy to an economy of domestic demand and where the Chinese
increasingly adopt the Western consumer lifestyle while China emerges as a
second world power we can't ignore the technological and scientific development
that it's undergoing including that of its smartphone companies the Chinese
company that has increasingly worried Apple as Huawei a Chinese smartphone
company while Apple and Samsung have 19% of market share the percentage sales
growth is almost nil Apple and Samsung had negative sales growth of negative 4
percent and negative 5 percent respectively qua way unlike the
previously mentioned brands experienced a 34 percent increase in sales with 205
point 3 million units shipped in 2018 compared to 150 3.1 million units
shipped in 2017 Huawei is the third leading company in the global cellular
market and last year had an explosive growth of 43 percent in just one year
Huawei has been able to produce high-end smartphones with functionality and
features that rival the iPhone for the Samsung Galaxy at much more comfortable
prices this is why many consumers especially in China
have begun to transition to hallway in the case of China it is a local company
so the Chinese have more motivation to purchase the product however it is worth
mentioning that many consumers in general still purchase the iPhone for
its social status the explosive growth of the Chinese brand which threatened
the Western technology companies such as Apple and the South Korean brand Samsung
has led to political tensions between the US the European Union and China the
US and the West in general have not been very happy with huawei's exponential
growth obviously the United States looks after Apple's interests and in that very
essence president Trump has accused the Chinese company for spying on its users
in December 2018 the daughter of the founder of the Chinese
telecommunications giant was rest in Canada and faces extraditions of
the United States the daughter of the founder of Huawei is also the financial
director of the company but the United States has been investigating hallway
for a possible violation of sanctions against Iran the Chinese embassy in
Canada strongly protested against the arrest and demanded her immediate
release for the time being she's on parole but the u.s. demanded her
extradition the United States accuses Huawei and its
board of directors of stealing technology from t-mobile another US
company the arrests came at a delicate time for relations between the United
States and China both nations are involved in a trade war that has seen
both countries impose billions of dollars on each other's territories it
also coincides with movements to restrict the use of Huawei technology in
Western countries the u.s. Australia and New Zealand have blocked the use of the
Chinese company's equipment and infrastructure for new faster 5g mobile
networks but in general the smartphone market is a trillion-dollar market and
the threat of Huawei and other Chinese brands will unlikely cause Apple to
disappear like blackberry in the past Apple also has many investments in other
aspects of technology and there will always be buyers for the iPhone but in
any case Apple has a huge pool of liquid reserves with billions of dollars to
support any shortage in income it will soon be the end of the reign of Apple
and Samsung and China's takeover is imminent and what do you think of the
iPhone do you think their insane prices are worth it and what brand do you think
is on the rise let us know in the comments below I hope you liked this
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