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Consumers & Big Business Move To Dump iPhones & Apple Eco System

Australians like the Chinese have started to dump Apple iPhones if the latest Kogan numbers are anything to go by.

The Financial Review has also reported that even big business executives are getting fed up with Apple products in particular their ageing eco system.

Tony Boyd writing in the AFR said that a local chief executive of a local company with annual revenue of $3.5 billion said he was “sick” of Apple and was going to return to devices running on Google’s Android platform.

He was frustrated that an upgrade of software for his Apple watch had slowed the responsiveness of the device, possibly as a way to encourage him to buy a new Apple watch. But he admits that extracting himself from the Apple ecosystem will be difficult and time consuming.

Kogan told the ASX that the lack of demand for the new iPhone, contributed to a 46.7 per cent decline in its revenue from global brands in the six months to December.

The company published a chart showing its revenue from Apple products had more than halved in the six months to December compared to the same period in 2017.

ChannelNews understands that Telstra, Harvey Norman and JB Hi Fi have been impacted by falling demand for Apple products since the launch of the new iPhones and a significant increase in Apple prices.

The move could put retailers back into a position to negotiate with Apple for better margins and rebates as in the past it has been Apple dictating terms to retailers.

Apple’s sales globally have been hit by lengthening iPhone replacement cycles in China and elsewhere. On January 3, the company issued its first negative pre-earnings release in 15 years largely because of weaker sales of iPhones in China.

Right now, Apple is confronting a number of major issues, around the world. The biggest is the perception that Apple have been unable to do a ‘Steve Jobs” and deliver a breakthrough new product.

As one analyst told ChannelNews at CES 2019 “Apple is still clinging to the past. They need a product that will give them future growth and right now that product is not on the radar”.

Also impacting Apple is consumer resistance to the iPhone upgrade costs, consistent quality problems with existing products and the fact that brands such as Samsung are delivering a superior smartphone.

Kogan shares rose 22 per cent to close at $3.97 a share on the back of higher revenue from other segments of the Kogan business, including a 23.6 per cent rise in revenue from exclusive brands and a 92.8 per cent rise in revenue from partner brands.

The positive sentiment towards the stock was helped by the company’s statement that gross margin for the first half of 2019 was broadly in line with the first half of 2018.

Kogan shares have fallen more than 60 per cent since hitting a record high in June last year. The company is forecast to have revenue growth this year of about 11 per cent, a growth rate that does not warrant the extreme price earnings multiples applied before the stock collapsed the Financial Review reported.