Google & Their Pixel Set To Hurt Apple, As Telstra & JB Hi Fi Go Hard
The slump in sales of Apple iPhones is starting to have an effect as all three carriers in Australia report that demand for the new iPhone 7 was not as strong as the iPhone 6.
Another problem set to impact Apple is the release today by Google of their new Pixel smartphone which goes on sale at JB Hi Fi and Telstra.
Analysts at IDC are tipping that carriers like Telstra who have the new Google smartphone exclusive will make up for the vacuum left by the recall of the Note 7 by pushing the new Pixel smartphone “very hard” running into Xmas.
The slump in demand for iPhone is not only being felt by carrier’s suppliers to Apple are also feeling the blowtorch effect of the slump with many reporting a “significant slump” in demand for iPhone components.
The FTSE 250 company, whose biggest customers include Apple, said it had suffered muted demand for its products in the three months to 30 September.
That led to a “very challenging trading performance” in the quarter and forced Laird to lower annual profit guidance to about £50m.
Analysts had expected the company to post pre-tax profits of £67m to £80m.
It made profits of £73.1m for the year to December 2015.
The profit warning sent saw their share crash in London.
Laird said production growth for mobile devices this year had fallen, making it difficult to predict demand.
Tony Quinlan, chief executive, said: “We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well.”
He said measures the company had taken would improve its performance next year and beyond.
Apple said in July that it sold 40.4 million iPhones in the third quarter – 15% lower than the same period last year – ahead of the release of the new iPhone 7.
Apple is refusing to say how many iPhone 7’s they have sold since the launch of the new smartphone.
US research group Localytics has continued to watch over the growth of the iPhone 7 and iPhone 7 Plus. Its figures show that the combined iPhone 7 family’s market share of current Apple devices was 3.6 percent after two weeks on sale. That compares to the iPhone 6S family’s 4.0 percent after two weeks on sale.
The Pixel isn’t just another Android smartphone – it’s a Google phone. The company is finally launching a direct assault on its biggest rival Apple with retail partners such as JB Hi Fi and Telstra being given “massive Co-Op funding
For years Google has been involved in a proxy war with the iPhone maker. It makes a rival operating system, Android, it buys up patents and it goes to court to protect them.
But until now it hasn’t truly engaged in hardware itself. It licenses Android for others to use – and while that has made the operating system the world’s most popular on mobile, ahead of iOS, with over 1.4bn devices active a month, it’s not without downsides.
According to data from IDC, Google and its Nexus partners have only sold around 23m in total since 2010, making them only 0.2% of the total shipments of smartphones in that period. A curio, more than a mainstream smartphone. Samsung, on the other hand, has sold a total of 520m Samsung S models over the years, while Apple has sold 1bn iPhones.
Samsung has therefore been left as the premium Android champion, particularly as smaller players including, Sony and LG have struggled. Samsung and Apple are currently locked in a war for the so-called floating voter: the 20% of users that ever actually switch platforms.
Now Google has decided to enter that battle and compete with Apple directly. No more proxies, no more relying on others to champion its mobile operating system or to make them in a partnership, and it will provide direct updates to devices in the same way Apple does. The Pixel is a Google phone, and a statement of intent.
This moment will reveal a lot about the strength of Google’s brand. Marc Allera, chief executive of EE, Google’s exclusive network partner in the UK, says: “Google has long been known as an innovative tech brand and consumers can expect it to now become a new and exciting player within mobile following this move.”
For Google, the Pixel is about putting its brand and services – the Google Assistant – front and centre. Jeronimo says: “With the Nexus, Google attempted to bring the best device running the latest version of Android, but couldn’t give priority to one of the tier two manufacturers that were interested in making it when you have companies like Samsung and Huawei leading the market. It meant Google struggled to differentiate with its own device when its partners were already making very good devices that were good value.”
Either way, Google launching a smartphone is seen as a good thing by industry watchers, regardless of how Google’s sales battle with Apple goes.
“It keeps people interested in Android and it raises awareness that Google is not just developing one version of Android after the other without trying to be innovative,” says Jeronimo. “An announcement like this is important to the market if it brings something different and innovative, something users can expect to use over the next year.”