The iPhone 11's Success: A Turning Point for Apple

In 2016, Apple attempted to capitalize on emerging markets, but it was facing stiff competition from other smartphone manufacturers. Despite this, the company continued to experience growth in these markets. However, the overall smartphone market in China experienced a 13.7% decrease during the same period, proving strong demand for iPhones despite a declining market.

The iPhone 11's success was particularly impressive considering the challenging circumstances facing Apple in China. The company had been struggling to stay afloat amidst a trade war with the US and Chinese governments, which threatened increased tariffs on imported products. Additionally, the US government banned domestic telecommunication companies from buying foreign equipment due to national security concerns, affecting Chinese companies like Huawei. These actions against China caused an anti-American movement among some citizens, who set their sights on US companies like Apple, igniting a boycott and declaring Huawei's superiority.

Despite these hostility towards Apple among Chinese citizens, the trade tensions between the US and Chinese governments, and the country's declining smartphone market, the iPhone 11 managed to defy expectations. The phone achieved sales growth in China for the first time since 2015, which is an incredible achievement. This milestone alone is remarkable, but things become even more impressive when considering the Indian market.

Apple had been struggling to make a significant impact in India, with Tim Cook visiting the country back in 2016 as part of an effort to boost sales. However, 2017 and 2018 saw no significant returns on the company's investment. The high price of the iPhone in a market that is very price-sensitive was likely the main reason for this lackluster performance. Nevertheless, Apple wasn't standing idly by during this time. They began assembling the iPhone XR in India with the help of Foxconn's facility, which allowed Apple to finally avoid tariffs and penalties associated with imported products.

This resulted in a 35% price drop for the iPhone XR in 2019, and combined with the lower price of the iPhone 11, Apple was able to turn around its sales performance in India. The company doubled its market share from one to two percent, which may not seem significant on its own, but is quite impressive considering the Indian market is one of the largest in the world.

The success of the iPhone 11 can be attributed to several key factors. Firstly, it hit the sweet spot of what consumers wanted from an iPhone. It featured the same incredible camera capabilities as the premium iPhone 11 Pro, except for 2x optical zoom. The phone also boasted even better battery life than the previous XR and a glass design that was more durable than ever before. All of these features came at a cost that was lower than any iPhone since the 8, making it a compelling device.

The foundation of the iPhone 11's success can be attributed to its ability to offer top-notch features without breaking the bank. The phone paled in comparison to the featureset that the 11 offered. This was likely due to the company's efforts to balance innovation with affordability, which ultimately paid off.

The sales success of the iPhone 11 had a significant impact on Apple's financial performance. The company ended up earning $91.8 billion in revenue for its first fiscal quarter of 2020, which ran from September to December 2019. This was an increase of 9% from the previous year and set a new quarterly record for Apple. This growth is not only a testament to the phone's success but also indicates that iPhone sales are back on track.

The growth in international markets like China and India has been particularly significant for Apple. The company has been working to expand into these markets for years, and it appears to be paying off. The success of the iPhone 11 is a turning point for Apple, indicating that the company can navigate challenging circumstances and come out stronger on the other side.

As Apple continues to navigate the ever-changing landscape of the smartphone market, it will be interesting to see if this growth can be sustained in the future. Despite the challenges facing the industry, the iPhone 11's success has demonstrated that Apple is still a major player in the market. The company's ability to innovate and adapt to changing consumer demands has allowed it to achieve remarkable sales figures.

In conclusion, the success of the iPhone 11 is a testament to Apple's ability to create innovative products that meet the needs of consumers. The phone's combination of top-notch features, affordability, and durability made it an attractive option for users worldwide. As Apple continues to navigate the smartphone market, its focus on innovation and customer satisfaction will be crucial in sustaining this growth and maintaining its position as a leader in the industry.

"WEBVTTKind: captionsLanguage: enApple recently reported their earnings forthe first fiscal quarter of 2020, and thenumbers surprised some analysts.Apple has had some of their most profitablequarters ever in the last year thanks to thesales success of the iPhone 11, but it’salso worth mentioning the struggles they’vefaced in the process.Because remember that the biggest Apple-relatednews story in 2016 was the decline of theirhardware sales, especially when it came tothe iPhone.After a decade of record-setting growth, demandfor the device finally fell.And not just for one quarter, but three quartersin a row.That resulted in Apple’s revenue shrinkingby almost ten percent, causing the companyto post an annual revenue decline for thefirst time in fifteen years.So how did Apple go from shrinking iPhonesales in 2016, to surging sales in 2019?Well that’s exactly what we’re going tofind out.This is Greg with Apple Explained, and I wantto thank Squarespace for sponsoring this video.If you want to help decide which topics Icover, make sure you’re subscribed and votingpolls like this one will show up in your mobileactivity feed.Now in order to understand how the iPhone11 reignited Apple’s sales success in 2019,we first have to learn about what caused Apple’srevenue slowdown to begin with.And as I mentioned in the intro, that trendbegan in 2016 while the iPhone 6s served asApple’s flagship smartphone.It was during this time that the company startedto notice slowing sales of not only the iPhone,but the Mac and iPad too.Mac sales dropped by seventeen percent andiPad sales by six percent.And because of this slowing growth acrossthe board, Apple announced in 2018 that they’dno longer be sharing unit sales of their hardwareand instead only reveal revenue earned.That way, they could prevent news outletsfrom running negative headlines like “Areslow iPhone sales just a blip, or is Applestarting to struggle?”But it wasn’t only about slowing hardwaresales, it was also about where those saleswere happening.Because around 2015 Apple identified two emergingmarkets where they’d like to expand theirpresence, China and India.But there was a problem.Domestic phones in those countries are muchless expensive than international deviceslike the iPhone.And it has a lot to do with the extra tariffsand taxes imposed on imported devices.And that’s exactly what prompted Tim Cookto visit India for the first time back in2016.He wanted to negotiate with their prime ministerNarendra Modi and reduce the tariffs Applehad to pay to get their iPhones to marketin India.But Modi didn’t budge on his position, andthat prevented Apple from seeing increasedsales success in the country.A similar situation played out in China.Although iPhones were viewed as a desirable,luxury device, most Chinese customers consideredit an unnecessary expense.Mainly because the app called WeChat, whicheveryone in China uses to do almost everything,is available on iOS and Android.So there isn’t much of a reason for usersin China to spend hundreds more on an iPhonerather than a more affordable Huawei phone.So as a response to slowing sales and failedattempts at capitalizing on foreign markets,Apple began increasing hardware prices acrossthe board.By 2018, the Mac Mini, MacBook Air, iPad Pro,and even accessories like the Magic Mouse,Magic Keyboard, and Apple Pencil all receivedprice hikes in a way that was unprecedentedin Apple’s history.But there’s one product in particular Iwant to focus on, and that’s the iPhone.Because the price increases it received wasquite significant.In 2016, the flagship iPhone 7 cost $650.One year later, the iPhone 8 was priced at$700, a $50 premium.But the iPhone 8 wasn’t even Apple’s flagshipdevice, that title belonged to the iPhoneX, released the same year.And that premium model carried a record pricetag of one-thousand dollars.That’s $350 more than the flagship iPhone7 released just one year earlier.But Apple didn’t stop there, they pushedthe iPhone’s price even higher with theXS Max in 2018, which retailed for $1,100.But it wasn’t only the premium iPhone modelsthat ballooned in price.The so-called “budget” iPhone XR did aswell, coming in at $750, which was $50 morethan the iPhone 8, and $100 more than the2016 flagship iPhone 7.And this dramatic rise in the iPhone’s costtook a toll on sales, with the iPhone XR sufferingfrom less pre-orders compared to previousmodels, weaker demand, and two separate cutsto iPhone production within two months.It was clear that customers were getting tiredof paying more for iPhones year after year,and so in 2019 Apple made a decision thatnot many people were expecting.They actually reduced the iPhone’s pricefor the first time in over a decade.The iPhone 11 received a $50 price drop comparedto the previous iPhone XR, coming in at $700.And that made all the difference when it cameto sales performance.Now when it comes to performance, I’d liketo give you guys an update on how my new websiteis performing since I redesigned with Squarespace.Traffic to my site is actually up over 100%compared to last year which is great sinceI’m capturing more people from google searcheswho are then redirected to my YouTube channelor social media accounts.Now Squarespace is my favorite website builderto use since it has the highest number ofwebsite templates to choose from and they’reall optimized for mobile so I didn’t haveto do any extra work optimizing my site forsmartphones or tablets.And when I wanted to sell a merch productI was able to add an e-commerce store to mysite without starting over from scratch.Plus the payment processor was built in andI could print shipping labels straight fromSquarespace as well.It really is an all-in-one platform designedto do almost anything you can imagine.And you can get all this for cheaper thanyou might think, especially if you use thelink squarespace.com/appleexplained sinceyou’ll get 10% off your first purchase,you can find that link in the description.Alright now as I mentioned earlier Apple nolonger reports unit sales of their products,so we’re forced to rely on third party analyststo make as accurate predictions as possible.But we’re fairly certain that in the firstmonth of sales, the iPhone 11 outsold theXR by about fifteen percent, with twelve millionunits sold.This outperformed even the most generous predictionsby analysts, and led to Apple increasing productionof the iPhone 11 by 1.6 million units.But the iPhone 11 wasn’t only experiencingsales success in the US, it was also doingwell in the emerging markets that Apple hadtried to capitalize on in 2016.For example, in China, the iPhone 11 drovea sales increase of 18.7% compared to theprevious year.And this number is especially impressive fora few reasons.First, the overall smartphone market in Chinaexperienced a 13.7% decrease during the sameperiod, proving strong demand for the iPhonedespite a declining market.Second, Apple had been struggling to stayafloat in China amid a trade war with theUS and Chinese governments, with both countriesthreatening increased tariffs on importedproducts.And although Apple escaped the economic effectsof this trade tension, they didn’t escapethe social implications of being an Americancompany selling products in China.You see, in addition to trade disputes, theUS government banned domestic telecommunicationcompanies from buying foreign equipment dueto national security concerns.That meant Chinese companies like Huawei couldn’tsell their technology to US companies likeAT&T or Verizon to develop their 5G infrastructure.And if that didn’t upset the Chinese governmentenough, President Trump also signed an executiveorder banning Huawei from buying US technologywithout government approval.So companies like Google were no longer allowedto offer apps like Google Play on Huawei devices.And all these actions against China causedan anti-American movement among some of theircitizens, who set their sights on US companieslike Apple, igniting a boycott and a declarationof Huawei’s superiority.So when you consider this hostility towardApple among Chinese citizens, the trade tensionsbetween the US and Chinese governments, andthe country’s declining smartphone market,Apple was expected to suffer a fifty percentdrop in Chinese iPhone sales in the secondhalf of 2019.But the iPhone 11 was such a compelling device,that it managed to defy unprecedented oddsin such a significant way that Apple achievedsales growth in China for the first time since2015.And that achievement alone is incredible,but things become even more impressive whenconsidering the Indian market.As I mentioned earlier, Tim Cook visited Indiaback in 2016 as part of an effort to boostsales in the country, but 2017 and 2018 sawno significant returns on the company’sinvestment.And that’s likely due to the extraordinarilyhigh price of the iPhone in a market that’svery price sensitive.But Apple wasn’t standing idly by duringthat time.They actually began assembling the iPhoneXR in India with the help of Foxconn’s facility,which allowed Apple to finally avoid the tariffsand penalties associated with imported products.This resulted in a 35% price drop for theiPhone XR in 2019, and combine with the lowerprice of the iPhone 11, Apple was able toturn around its sales performance in Indiaby doubling its market share from one to twopercent.And although that may not sound significant,the Indian market in one of the largest inthe world.So a company growing their market share byone percent in a year is quite impressive,especially if that growth can be sustainedinto the future.Now we’ve covered how the iPhone 11 wasable to turn around Apple’s sluggish salesdomestically and internationally and proveto be a very successful product for Apple.But something you may be asking yourself,is why?Why was the iPhone 11 able to deliver allthis success for Apple and not models thatcame before it like the iPhone XR or iPhone8?Well, I think there were many variables atplay, but the foundation of the iPhone 11’ssuccess can be attributed to the fact thatit hit the sweet spot of what consumers wantedfrom an iPhone.It had the same incredible camera featuresas the premium iPhone 11 Pro, except for 2xoptical zoom.It had even better battery life than the previousXR, it featured a glass design that was moredurable than ever before, and all of thesefeatures came at a cost that was lower thanany iPhone since the 8.A model that paled in comparison to the featureset that the 11 offered.Now what did all of this sales success meanfor Apple?Well, the company ended up earning $91.8 billionin revenue for its first fiscal quarter of2020, which actually ran from September toDecember 2019.That was an increase of 9% from the previousyear, which not only outperformed analystexpectations, but also set a new quarterlyrecord for Apple.So it’s clear that iPhone sales are backon track with the 11, and even sparking fastergrowth than ever before in vital internationalmarkets like China and India that Apple hasbeen working to expand into for years.Now it remains to be seen if this growth canbe sustained, but it’s definitely good newsfor a company that’s been struggling tocombat slowing hardware sales.Alright guys thanks for watching and I’llsee you next time.\n"