Is Apple’s competitive edge dangerously fading away?

Innovation gap with its key competitors closing to the point where Cupertino needs to follow rather than lead.

Apple has once again wowed the world with the launch of the iPhone 6S range, the iPad Pro, and a new Apple TV.

However, the innovation gap with its key competitors is closing to the point where Apple needs to follow rather than lead.

Take for example the iPad Pro, which features a stylus and an attachable keyboard which Samsung and Microsoft have been offering with their tablets for several years.

Or take the new Apple TV voice-controlled search and a large app library which can already be seen today on Android TV products like Nvidia’s Shield.

Not forgetting that many of the iPhone 6S camera technology and features have already been implemented by Nokia, HTC, and Sony.

“But Apple excels in the execution of those new consumer technologies in order to provide the best consumer experience on the market and the iPad Pro and the new Apple TV deliver this,” counters Ronan de Renesse, research analyst, Ovum.

“The iPad Pro will be particularly successful among professional Apple MacBook users. The higher price point compared with other iPads should help regrow iPad revenues which declined 23 percent between 2Q14 and 2Q15.

“With the iPhone 6S, Apple completes the best smartphone product range in the industry, addressing almost all price segments.”

At present, de Renesse reports that the iPhone is Apple’s largest and most profitable product segment (63.2 percent of revenues in Q2 2015) and also the one experiencing the strongest competition.

“The iPhone 6s matches the competition in terms of features and innovation but does not exceed it,” he adds.

“The new 3D Touch user interface could make a difference but it will take time to catch on with consumers and developers. This is an entirely new way to interact with devices that people are unfamiliar with.

“The iPhone 5s, 6, 6 Plus, 6s, and 6s Plus makes the strongest smartphone product range Apple has ever had, addressing almost all customer segments and price points.

“This will maximise iPhone sales across the world and guarantee its leading smartphone brand position.”

De Renesse believes that new pricing for the iPhone 5s, 6, and 6 Plus will also help boost sales closer to New Zealand, through the Asia Pacific region.

Since the beginning of 2015, Apple makes more revenues from Greater China than it does from Europe.

However, the rest of Asia Pacific, including India, Indonesia, Malaysia, and the Philippines, generated less than six percent of its revenues in 2Q15.

“Apple must gain stronger market share in those new growth markets,” de Renesse claims.

“We expect Apple handset sales to grow 12.3 percent in 2015 to reach 216 million unit sales. Nearly two-thirds of that growth will come from the Asia Pacific region.

“How Apple positions the iPhone range in that region, especially outside of China and India, will be key.”

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