Jenny Chan 陳詠欣
Sep 10, 2014

Is Apple losing its first-mover advantage?

SHANGHAI - With the announcement of its first ‘phablet’, a smartwatch and mobile payments, Apple has just played catch-up on three major products that competitors have already launched.

The phablet market is already crowded as Apple enters
The phablet market is already crowded as Apple enters

Will the new 5.5-inch iPhone 6 Plus, Apple Watch and Apple Pay system announced just hours ago help the brand regain market share from the likes of Samsung and Xiaomi?

One school of thought says it's smart strategy to wait for the competition to fumble, perfect the required technology, and then win over consumers. However, researchers are predicting that this could be Apple’s toughest launch yet as it looks to compete with Samsung’s popularity and also low-cost Android devices in emerging Asian markets. Rather than enjoying its usual first-mover advantage, Apple will need to play catch-up in an established and densely-populated phablet market, according to TNS.

Given that phablets in Asia already comprise more than 30 per cent of the smartphone market (dominated by Samsung), Joe Webb, head of digital for TNS APAC, said, “The competition in this space is now fierce. Apple will face an altogether more complex challenge for a brand used to leading the field, not following".

A TNS study of more than 55,000 internet users worldwide found that ‘phablets’ have soared in popularity in Asian markets such as South Korea, Hong Kong, Taiwan and Singapore. This presents a very tough market for Apple to infiltrate as it launches the iPhone 6.

The growth of phablets has been triggered by the surge in online video consumption, especially popular in emerging markets with low access to other devices. These markets are commonly perceived as ‘late adopters’, where Apple’s strategy of targeting only premium users is not paying off as it becomes comparably more expensive when placed beside Samsung and Xiaomi.

Samsung leads with over 66 per cent phablet share in both Hong Kong and South Korea. In China, Samsung has already been overtaken by Xiaomi as its second-quarter shipments exceeded the former for the first time, according to August data from Canalys.

“Although there is tremendous excitement around the launch of the iPhone 6 in China, the real question is whether or not iPhone will be able to maintain leadership in the face of heated competition from the likes of Xiaomi," said Colin Marson, co-CEO of YouGov Asia-Pacific. The research firm's daily tracking has seen Xiaomi take the lead from iPhone in the past month in terms of purchase intent.

In a survey designed by YouGov and analysis conducted in partnership with Waggener Edstrom, there was strong advocacy among current Apple owners for the brand, but views toward Apple are strongly polarised among non-Apple owners. Fifty-five per cent of iPhone 5s/5c owners are considered 'promoters' of the brand, but 15 per cent in the same pool are 'detractors' and unlikely to recommend an Apple product to others.

This survey was conducted in Mandarin via mobile methodology and included 2,689 samples across tier 1 to 3 cities, just before yesterday's big Apple launch event.

In China, awareness of the iPhone event was high, but levels of engagement vary dramatically among Apple owners and others. 43 per cent of Apple owners planned to watch it live online, while 32 per cent of non-owners decided to obtain information on social media, the primary driver of awareness about the iPhone 6 release.

Predictions are similar for the Apple watch. Stephen Tracy, regional insight and analytics lead at Waggener Edstrom, said in some ways, Apple has "fallen behind the curve" as many competitors have already gone to market with wearable tech.


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