The iPhone SE Is Limiting Apple's Usual Seasonal Slump

Kantar’s June quarter smartphone market share data shows that Apple ’s iPhone SE has helped the company change the trajectory of its typical seasonal decline in most of its key markets. Kantar’s data is a rolling average of the past three months and it has Apple’s share being helped in the US, China and the EU5 countries (Germany, Great Britain, France, Italy and Spain). Japan was the only geography that saw larger than typical seasonal decline. I have developed a Google Doc with market shares going back to August 2011. (Note that I own Apple shares).

Tim Cook said on the company’s June quarter conference call “We had a very successful global launch of iPhone SE, and demand outstripped supply throughout the quarter. We brought on additional capacity and were able to achieve supply/demand balance as we entered the September quarter. At its launch, we said that the addition of the iPhone SE to the iPhone lineup placed us in a better position to meet the needs of customers who love a four-inch phone and to attract even more customers into our ecosystem.”

Apple’s US smartphone share increased in the June quarter

While Apple’s 0.2% share increase from 31.6% in the March quarter to 31.8% in the June quarter is a very small amount this compares to a (3.9)% quarter to quarter decline for the June 2014 quarter and a larger (6.0)% decline in the June 2015 quarter.

Lauren Guenveur, Consumer Insight Director for Kantar Worldpanel ComTech wrote “Combined sales of the iPhone 6s/6s Plus totaled 15.1%, making this the top selling device in the quarter, while the Samsung Galaxy S7/S7 edge accounted for 14.1% of smartphone sales. The iPhone SE became the third best-selling phone at 5.1%, contributing to the overall growth of iOS during the period.”

Apple’s China smartphone declined but less than typical

Apple saw its smartphone market share decline to 17.9% in the June quarter, which is the lowest percentage since 15.9% in October 2014. However the (3.2)% drop from 21.1% to 17.9% is less than the June 2014’s quarters (5.1)% decrease and June 2015’s (6.4)%.

Tamsin Timpson, Strategic Insight Director at Kantar Worldpanel ComTech Asia. “While the iPhone 6s and 6s Plus remain the top selling smartphones in the region, pressure from Huawei’s Mate 8, P9, Xiaomi’s RedMi Note 3 and Mi 5, and Oppo’s R9 has led to increased competition in the market. With the continued supply constraints of the iPhone SE, that model was not able to make the expected impact, accounting for 2.5% of smartphone sales in the second quarter."

Japan had a large drop in iPhone market share

Apple has seen a large decline in its smartphone market share in Japan. At 38.0% it is down from 54.1% in December 2015 and it also dropped by 13.8 percentage points from 51.7% in the March 2016 quarter. While the 13.8 point drop is less than the 18.1 point quarter to quarter drop in the June 2014 quarter it is much higher than the 2.9 point drop for the June 2015 quarter.

Apple’s share in the EU5 increased year over year

Apple was able to eek out a 0.7 percentage point increase in its share from 17.5% to 18.2% year over year. This is probably the first year over year increase since the September 2015 quarter. Additionally while it is still a decline the iPhone only had a 0.7 percentage point decline quarter to quarter vs. down 3.3 points in the June 2014 quarter and 2.7 points in the June 2015 quarter.

“In Great Britain, the iPhone SE was the top selling device in the quarter at 9.2%, followed by the iPhone 6s at 9.1%. Together they contributed to iOS growth of 3.1 percentage points to 37.2% in the second quarter of 2016,” explained Dominic Sunnebo, Business Unit Director for Kantar Worldpanel ComTech Europe.

Overall it appears that Apple’s iPhone SE has at least slowed or reversed the share declines the company has experienced over the past year. Since the SE was supply constrained in the June quarter it will be interesting to see what impact it will have in unit sales and average selling prices in the September quarter and beyond.

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