Kantar Report Shows Why Apple Needs To Innovate Quicker

Apple Inc. (NASDAQ: AAPL) needs to innovate faster and explore new markets, as the smartphone sales are slowing and would be tough to return to its earlier levels of double-digit growth.

A Kantar report, covered by Patently Apple, shows that mobile phone penetration in the US has reached 91 percent. Smartphone penetration has reached 65 percent. The US, the similarly saturated Big Five European nations, and urban China together represented roughly 45 percent of overall phone sales in 2015.

For Apple, the ripple effect was seen in its first quarter results that showed that its iPhone sales grew only 1 percent, iPad sales fell 21 percent.

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It's high time Apple shifted its focus beyond hardware and explore opportunities in wearables, the Internet of Things, connected homes, and virtual reality. Apple has to move its innovation needle quickly to maintain its lead over its competitors such as Samsung, which bets on its new Galaxy S7 and Samsung Gear VR to get back customers from Apple and other Android brands. Apple, which is yet to explore the virtual reality feature, is rumored to fit a dual lens camera in its iPhone 7.

The iPhone maker has a great advantage to exploit these trends since it controls both hardware and software unlike Samsung and other vendors who focus only on the hardware part.

Samsung had got the early mover advantage over Apple with their smartwatch. But, Apple took over the product lead in just few months. Apple might be hoping to have a repeat of the fortunes with the VR trend as it enjoys a strong customer loyalty for its OS and brand.

The Kantar report said iOS holds a lead over Android in the US: 89 percent and 84 percent, respectively. Apple also boasts the strongest brand loyalty when compared with Samsung, the only brand that comes close to Apple's 89 percent in the US, with 68 percent. Within the Android ecosystem, Samsung had no rivals at the end of 2015, with its loyalty reaching 82 percent in the US.

Apple has a lot of room for growth in China, with the nation's middle class is yet to shift to 4G phones. In India, another market ripe for 4G conversion, Apple faces strong rivalry from cheap Android smartphone makers whose devices were said to provide more features at a cheaper price. But, Apple needs to come with innovative products and features to exploit these market conditions.