Date
16 July 2018
Apple CEO Tim Cook may have to rely on the MacBook to make up for the sluggish iPhone sales. Photo: AFP
Apple CEO Tim Cook may have to rely on the MacBook to make up for the sluggish iPhone sales. Photo: AFP

Why Apple’s Macbook is set to outsell iPhones

Apple will host a media event on March 27 at Lane Tech College in Chicago with a teaser of an invitation:  “Let’s take a field trip.” The event will focus on “new creative ideas for teachers and students”.

It appears that the technology giant is turning its focus to the education sector after its latest iPhone releases saw sluggish sales.

According to several business media reports, Apple’s iPhone X, which marked the 10th anniversary of the iconic gadget, failed to impress customers during the holiday season, as the volume of orders for the model continued to decline. Suppliers are also expecting falling orders for related components for the rest of the year.

In fact, the iPhone 8, with its more traditional design, is performing better in the market.

Given the weak outlook for Apple’s smartphones, the market appears to be turning its attention to the company’s next generation of products to be released in the second half this year.

Media speculated that Apple could unveil an iPhone X successor with a much bigger screen as well as a cheaper model to convince users to upgrade their devices.

The lackluster market for smartphones is affecting the entire sector. Samsung Electronics also experienced lower-than-expected pre-order numbers for its newly launched flagship Galaxy S9 series in its home market in South Korea. Apparently, customers were far from convinced of the need to upgrade their current phones just for a better camera.

To maintain the company’s healthy growth, Apple is betting on other products in different market segments.  The education sector is one area Apple could focus on, especially at a time when its laptops are overtaking iPhones in terms of growth rate.

According to market research firm IDC, Mac shipments in the fourth quarter of 2017 were up 7.3 percent year on year, while the PC market as a whole grew by just 0.7 percent. The remarkable growth saw Apple boost its market share to 8.2 percent in the fourth quarter last year from 7.7 percent in the same period in 2016.

KGI Securities’ analyst Ming-Chi Kuo even predicted that MacBook shipments will grow 13 to 16 percent in 2018, significantly ahead of projected growth for the iPhone (4 to 6 percent) and iPad (7 to 10 percent).

MacBook shipments are tipped to grow 60 to 80 percent in the second quarter over the same period last year. Kuo said Apple is likely to release a lower-cost MacBook Air in the second quarter.

The new product could be a shift in the company’s direction as it has been focusing on premium Macbook Pro and iMac Pro in the past few years. Apple is probably thinking of returning to the entry-level market, comprising students and first-time computer buyers.

Market observers believe that the cheaper version could help increase sales volume in this range and category of devices by 10 to 15 percent.

The PC market is mostly driven by the corporate and education sectors. Apple is facing stiff competition in schools from rivals such as Google. Google’s Chromebook, a laptop running on a Chrome operating system, is already a favorite among students.

Old rival Microsoft has been pushing Windows 10-based machines into schools. Apple could be eyeing the same market segment and studying how it could improve its standing in that segment.

Apple has two products catering to the needs of school teachers and students: iPad and MacBook. The market has been confused as to the difference between the two products, especially after Apple’s iOS 11, which has more multitasking features, enabled the company to sell iPad as a laptop replacement.

From the user’s perspective, however, MacBooks are equipped with much stronger computing power than iPads with its Mac OS, which are just running on a mobile OS.

The growing popularity of MacBooks, compared with iPhones and iPads, may indicate that a fully functional computer still cannot be replaced by a mobile device in the short term.

Apple may need to brush up its MacBook to encourage mobile users to upgrade their devices for home and office use.

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CG

EJ Insight writer

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