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Holiday Smartphone Activation Data Suggest Apple Needs a Revolutionary iPhone

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iPhone and iPad Activation slid compared to a year ago

Although Apple’s (AAPL) iPhones and iPads combined accounted for 44% of handset activation in the week leading up to Christmas 2016, the figure dropped from 49.1% one year earlier, according to research firm Flurry.

But Samsung’s (SSNLF) share of holiday smartphone activation rose to 21% from 19.8% one year previously, which is surprising because Samsung suffered a serious reputational damage in 2016, when it was forced to recall millions of Galaxy Note 7 handsets and halt production of the handset. The recall was triggered by fears that Note 7 batteries were heating up and exploding, posing safety risks for users.

The absence of the Note 7 meant reduced competition for Apple, which should have enabled it to sell more iPhones. But the company seemed to have missed the opportunity, possibly because it lacked a compelling product to lure Samsung customers.

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Can iPhone 8 reverse Apple’s shrinking fortunes?

Apple is in dire need of a powerful iPhone product to reverse its sliding smartphone sales that recently led the company to post its first annual revenue decline in more than 15 years. Supply chain leaks have suggested that Apple is developing a significantly redesigned iPhone for this year, likely to be named iPhone 8, and the device is rumored to come with an OLED (organic light-emitting diode) display, enabled wireless charging, and an all-glass surface.

As Apple has come under competition attack from Samsung, Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Sony (SNE) and Chinese brands Huawei, Xiaomi, BBK and Oppo, a compelling product in the iPhone 8 could be just what the company needs to boost sales.

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