Apple Inc. (NASDAQ:AAPL)’s iPhone, which made its debut nearly ten years ago, is surely among the most successful gadgets of all time. But, its growth is slowing now, and Apple itself is to be blamed for this. A report from ZDNet says, the US firm is the victim of its own success, and has played a good part in creating a Chinese Android monster, which could threaten even Apple’s dominance.
How Apple helped its own rivals?
Apple Inc. (NASDAQ:AAPL) iPhone has made a great impact in the smartphone industry even though it was not the first smartphone. Windows and BlackBerry predated the market for about ten years. However, none had the same combination of compelling functionalities and features as the iPhone. Even the first iPhone that was launched in June of 2007 was better than all other phones, notes a report from ZDNet.
However, the modern smartphone platform was created by what Apple did later: introduction of the iPhone SDK, the App Store, elimination iPhone’s dependence on the PC for syncing iTunes music, and other media.
Apple’s supply chain infrastructure – a big reason for its success – needed to leverage the capabilities of several other companies in Asia like Sharp for additional displays, Foxconn or Hon Hai Precision Industry for integrated manufacturing, and Samsung for displays, batteries, microprocessors, and DRAM. In the process, these suppliers acquired the knowledge that they needed to make their own phones, and compete with Apple directly.
In addition to building its own lucrative contract manufacturing business, Samsung became a smartphone and tablet player itself. For years, the Korean firm dominated the Android smartphone market. But, considering the size of China’s domestic smartphone market and given the size of China’s labor force and its manufacturing capability, it was only a matter of time before a Chinese smartphone expertise hogged the limelight.
To make matters worse for the Korean firm, Foxconn acquired Sharp in August of 2016 after the 2011Tōhoku earthquake and tsunami destroyed the Japanese industry. Sharp – a key Apple supplier – is a company that is considered the leader in IGZO and OLED display technology.
Can this Chinese firm threaten Apple?
Around five large companies, including ZTE, Xiaomi, Oppo, Lenovo, and Huawei, are leveraging much of the same manufacturing capabilities that Apple effectively ceded, notes ZDNet. Consumers started to win as different companies fought for more share in the smartphone market all over the world by reducing the cost of premium phones continually.
Now, we do not have just two smartphone to choose from. Huawei is one such smartphone maker that produces quality but inexpensive devices. The firm even demonstrated its ability to match Apple Inc. (NASDAQ:AAPL) and Samsung on build quality, and still come in lower price ranges.
“It would be easy to point out that the Chinese Android monster is of Apple’s own making and is a major reason why the company’s industry dominance is fading as its growth slows,” says ZDNet.
Huawei launched the Mate 9, its first flagship phablet, at CES 2017, and its getting very good reviews.