“Apple could see its market share in Japan fall by around 20 percent over time with ‘trouble brewing’ in its highest margin country, UBS said in a note on Tuesday,” Arjun Kharpal reports for CNBC. “While investors focus on Apple’srecent struggles in China, UBS suggests that a number of regulatory and competitive factors in Japan – which accounts for around 8 percent of the iPhone maker’s revenue – could be a cause for concern.”
There is some trouble brewing, though, that we believe could affect Apple’s growth. First, Japanese carriers are no longer as aggressively using discounts on handsets to lure subscribers from other carriers, which could affect phone sales. Second, our industry contacts indicate that while the Apple brand remains strong, cheaper alternatives are making inroads with Apple’s share potentially declining over time from 50 percent to 30 percent. — UBS analysts, Steven Milunovich and Benjamin Wilson
“Japan is a crucial market for Apple,” Kharpal reports. “In the U.S. technology giant’s fiscal second quarter, it posted a 24 percent year-over-year rise in revenues while every other region saw declines. It is also the market in which it commands the highest margin on its iPhones.”
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MacDailyNews Take: The hits just keep on coming.