Apple's biggest problem in its more than 36 percent decline in stock price since its all-time high in September 2012 is its unsuccessful penetration of the Asian market.

This was according to an analysis made by Seeking Alpha, declaring that "The driving markets are in Asia where Apple lacks a significant presence."

Apple apparently is losing billions of potential mobile phone users, particularly in China, Japan, Russia and India, due to a technical infrastructure and business model that is no longer in step with the changing market. What Apple needs to do, according to the analysis, is to expand its reach and counter its nearest competitor and Android phones with a proposition that is tailor fit for the Asian market.

Why Samsung Is Eating Apple's Share Of The Market Pie

Business model issues

It is worth noting that Apple has signed less than a dozen new carriers since 2011, in contrast to Samsung which reportedly now has 800 carriers worldwide, Apple only has 240 total globally.

In Japan and China, for example, their largest mobile phone carriers NTT DoCoMo Inc and China Mobile Ltd., respectively, are not carrying Apple products. Apple could easily be losing more than 700 million mobile phone subscribers in China alone.

According to Seeking Alpha's analysis, what causes carriers to back down from Apple deals are the subsidies imposed in carrying Apple products. While Apple's prior business model had been initially accepted by companies such as AT&T and Softbank, the same could not be said of other carriers particularly those outside North America and Europe. Some carriers, the analysis added, are unwilling to submit to Apple terms simply because they've grown and survived even without the iPhone.

As new carriers decline to carry Apple products, this only paves the way for Samsung and Android to enjoy a bigger chunk of the global smartphone market.

And because of this, Apple is said to be facing the serious problem of saturated market. According to Seeking Alpha, "This explains the more than 36 percent decline in its stock price since its all-time high in September. Apple's gross margin dropped from 47.4 percent last year to 37.5 percent in the latest quarter."

The analysis added that if Apple doesn't act fast, investors will continue to see a continuous drop in figures as the smartphone market becomes increasingly competitive moving forward.

Global Pricing Issues

Moreover, what the analysis considers the bigger problem of Apple's growth in Asia is its price. It is reportedly too high especially for India and China. "More than 80 percent of the market is prepaid and monthly cell phone bills can be only $10 or $11. The economics of an $800 phone for this demographic doesn't make much sense." Talks of Apple introducing a cheaper version of the iPhone for the mass market have yet to materialise.

The analysis adds, "By continuing these missteps in Asia, it has created opportunities for other smartphone manufacturers. Samsung has taken the lead in this department by offering a variety of devices in different styles, screen sizes, and price points. With a company like Samsung offering customization to individual carriers and their subscribers, the carriers ask themselves why do we need Apple and its terms? They have been doing just fine without the iPhone on their networks and are not going to let Apple dictate terms."

Technical Issues

The last barrier that Apple needs to hurdle if it wants to break into the Asian market according to Seeking Alpha is address its technical capabilities. Many of the carriers' networks are reportedly not technically suited to carry the iPhone.

As an example, the analysis cited China Mobile, the world's largest mobile phone carrier. China Mobile's network is presently not compatible with the iPhone and Apple has not made any adjustment to address the technical issues.

According to Seeking Alpha, there have been talks between Apple and China Mobile but that too have yet to be finalised. "Besides the technical issues, the business model and benefit sharing still need further discussion," China Mobile CEO Li Yue was quoted to have said.

Conclusion

Clearly, what Apple needs to do based on the points raised by Seeking Alpha is to solve all issues hampering their growth in the Asian region. This is one thing that Apple is said to be unaccustomed to being the market drivers in the past. But if they want to regain their share of the market pie now being chomped on by competitors, and see their stock prices up again, they have to do something fast now - adapt to changes and offer their untapped Asian market something that's tailor made for them.