Linked by Thom Holwerda on Wed 25th Sep 2013 10:38 UTC
Apple

I've been thinking a bit more about those iPhone 5C/5S weekend sales figures, and while it is certainly impressive, if you compare it to the iPhone 5's first weekend sales figures, it's actually quite a step backwards for Apple. The issue here - something many sites and even Apple itself doesn't want to focus on - is that the iPhone 5C/5S is available to a lot more people than the iPhone 5 was.

The iPhone 5 was available to 720 million people at launch, and sold 5 million units. This is a penetration of 0.69%. The iPhone 5C and 5S, however, are available to 2078 million people, and sold 9 million units, which constitutes a penetration of 0.43%. So, Apple has two new models to advertise and lure consumers with instead of one, and has a huge additional market (China) to address, yet it failed to capitalise on either of these two factors.

What this shows is that while the sales figure is still pretty darn impressive, it's not nearly as groundbreaking if you put it in perspective. Looking at it this way, the so-called record breaking 9 million figure can easily be explained away by Apple almost tripling its launch weekend audience, instead of an increasing popularity of the iPhone.

The only reason I'm writing this is to illustrate how numbers are entirely arbitrary, and it's easy to make silly comparisons and claim an arbitrary victory - or, change perspective a bit and claim arbitrary defeat, as I've done here.

Order by: Score:
The impressive part
by Windows Sucks on Wed 25th Sep 2013 11:02 UTC
Windows Sucks
Member since:
2005-11-10

Is that they could actually produce enough devices at good quality levels to even make that number. Even if they open up to more people how many companies can do that??

Reply Score: 5

RE: The impressive part
by bassbeast on Wed 25th Sep 2013 14:38 UTC in reply to "The impressive part"
bassbeast Member since:
2007-11-11

What I'd say is more impressive is how Mr Holwerda managed to make a negative article about the new iPhone when everybody else is talking about how quickly they ran through the stock.

Look I personally don't own an iAnything but even an Android phone user like me will give credit where credit is due and congratulate them on their numbers, but Mr Holwerda seems to have a serious almost rabid hatred for all things Apple. Maybe he is an Android or WinPhone fanboy, maybe he had a bad exp with an Apple device in the past, but in any case the article feels like "two minutes of hate" and unless he is trying to troll for pageviews its really kinda sad as it comes off as sour grapes.

Reply Score: 6

RE[2]: The impressive part
by Neolander on Wed 25th Sep 2013 15:29 UTC in reply to "RE: The impressive part"
Neolander Member since:
2010-03-08

What I'd say is more impressive is how Mr Holwerda managed to make a negative article about the new iPhone when everybody else is talking about how quickly they ran through the stock.

If running through the stock was a measure of market success, becoming successful on any market would be as simple as

1/Coming up with a pessimistic estimate of the amount of buyers
2/Dividing it by ten
3/Producing the resulting amount of devices

Though I believe they actually teach people to do that when they want to give a premium image of their product in marketing courses.

Edited 2013-09-25 15:32 UTC

Reply Score: 6

RE[3]: The impressive part
by Nelson on Wed 25th Sep 2013 17:11 UTC in reply to "RE[2]: The impressive part"
Nelson Member since:
2005-11-29

Its not just running through the stock, its running through the stock of 9 million devices. Thats a very large number.

Reply Score: 3

RE[3]: The impressive part
by bassbeast on Thu 26th Sep 2013 07:40 UTC in reply to "RE[2]: The impressive part"
bassbeast Member since:
2007-11-11

Thanks I so rarely get to use this...WHOOSH, you completely missed the point which is if Apple gave everyone a free iPhone Holwerda would say "Look at how they are trying to lock people into their platform!".

There is pointing out the negatives of a product and then there is fanboys waving their flags and spewing venom and what we have seen here for the past couple of years from Mr Holwerda when it comes to apple is firmly in the latter.

Reply Score: 2

RE[2]: The impressive part
by phoenix on Wed 25th Sep 2013 16:57 UTC in reply to "RE: The impressive part"
phoenix Member since:
2005-07-11

You've completely missed the point. Whoosh!

Reply Score: 1

RE[2]: The impressive part
by CaptainN- on Wed 25th Sep 2013 20:09 UTC in reply to "RE: The impressive part"
CaptainN- Member since:
2005-07-07

There's also the total lack of regard for the idea that Apple (and any company which must market a product to sell a product) has certainly adjusted its sales strategy to account for it's existing stock and ability to deliver them once sold. It's not like they could produce 3 times as many iPhones just because they used 3 times as much marketing to reach 3 times the sales numbers. Then they'd just have a shortage of stock, and egg on their face (and all the financial press hand wringing cause they failed to deliver, yada yada), as well as wasted marketing dollars.

It almost sounds like Thom still believes in the philosophy department's "economics". Business is not philosophy.

Reply Score: 2

RE[2]: The impressive part
by cdude on Wed 25th Sep 2013 21:21 UTC in reply to "RE: The impressive part"
cdude Member since:
2008-09-21

I think he has a point. But the point isn't meaned to be negative. The point is that someone should proper compare, consider context.

First note: Two models.
I think this is not an advantage (or disadvantage) to consider at all when looking at that numbers. Very less individuals would buy both but only one of them. Also the price- and hardware/software differences are not high (enough) to make it magically two times more offer or open complete new markets. The cheaper iPhone is not mid- or low-end but that we knew already. Still I think it had some positive effects just like the new iOS7 design had. Some but not much.

Second note: More markets, potentiell customers.
This isn't linear too cause it depends on the markets. Conditions like how much of the customers have the money (both models premium segment) and are willing to invest at the very first days cause of strong demand? Conditions like brand recogniation (in China lower then in US I would expect) or timing (its holiday season end in china and universities just started again), etc.

Theird note: Still impressive.
As written by Tom its still impressive even if only round about linear upscale rather then an explosive demand. It means there is demand, strong demand, for there products also outside of there core markets. It means they grow and growing is good. Its just not the unexpected super one-hit wonder some like to make it.

Edited 2013-09-25 21:33 UTC

Reply Score: 0

RE: The impressive part
by Dano on Thu 26th Sep 2013 02:28 UTC in reply to "The impressive part"
Dano Member since:
2006-01-22

It is pretty amazing they can push out that much work that quickly and have quality units. There must be an army of Chinese working on these things...

Reply Score: 1

RE[2]: The impressive part
by Windows Sucks on Thu 26th Sep 2013 03:19 UTC in reply to "RE: The impressive part"
Windows Sucks Member since:
2005-11-10

Same Army that's makes every other device but the Moto X.

Reply Score: 1

Comment by MOS6510
by MOS6510 on Wed 25th Sep 2013 11:28 UTC
MOS6510
Member since:
2011-05-12

Had they made more units and provided them in more countries they would have sold even more.

Maybe a better success number the percentage of sold units vs produced and this seems very close to 100%, just like the iPhone 5.

So they are doing great, again/still.

Reply Score: 4

RE: Comment by MOS6510
by Nelson on Wed 25th Sep 2013 12:04 UTC in reply to "Comment by MOS6510"
Nelson Member since:
2005-11-29

This. All indications are that Apple is selling every iPhone they can produce.

The hype is real. Apple has supreme control over their base, these are people that feel compelled to upgrade, so their weekend numbers always look amazing.

I'm amused that the tech industry goes through this correction every year. First they say "iPhone below expectations" or "Why hasn't Apple released sales figures" only to have Apple release stellar numbers a few days later.

Another amazing statistic is the uptake for iOS7 and the amount of big name apps already updated.

This is the holy grail of integration. Apple controls the end to end experience in ways that everyone else can only dream of.

Reply Score: 8

RE[2]: Comment by MOS6510
by Thom_Holwerda on Wed 25th Sep 2013 12:06 UTC in reply to "RE: Comment by MOS6510"
Thom_Holwerda Member since:
2005-06-29

That's the point I'm trying to make. Numbers are arbitrary.

Reply Score: 0

RE[3]: Comment by MOS6510
by Nelson on Wed 25th Sep 2013 12:22 UTC in reply to "RE[2]: Comment by MOS6510"
Nelson Member since:
2005-11-29

Numbers are pesky things. Two people can use the same numbers to convey two different points, or at times, to argue two opposite sides of a position.

Here's a good example
http://dominiescommunicate.wordpress.com/2012/06/27/time-for-graph-...

Reply Score: 2

RE[3]: Comment by MOS6510
by MOS6510 on Wed 25th Sep 2013 12:31 UTC in reply to "RE[2]: Comment by MOS6510"
MOS6510 Member since:
2011-05-12

Yeah, Apple's number are just higher on launch weekends than anyone else's and if they could produce more they'd be even higher.

More interesting is the total number of phone models sold over product lifetime.

Is there that much difference in selling amount X in one weekend vs sell X over 365 days? Maybe Apple users run faster to the shop than non-Apple users, but if sales are the same for another phone it would make both models equally successful.

When it comes to making money it's of course better to sell your stock as quickly as possible and Apple is making a lot of money on this too. They don't need to waste much money storing phones.

Considering this and taking to account that Apple continues to make money off sold iPhones through app and media sales one might wonder if they shouldn't just lower the sales price of the iPhone? They'd still make money even if they didn't sell more of them, but more likely they will sell more.

Being high prices phones leaves a lot of room for competitors to undercut them on price. If iPhones were made cheaper competitors would to go even lower, which could mean it wouldn't be worthwhile anymore. Or competitors need to come with something better, which is a win for consumers.

Reply Score: 3

RE[3]: Comment by MOS6510
by Tony Swash on Wed 25th Sep 2013 17:14 UTC in reply to "RE[2]: Comment by MOS6510"
Tony Swash Member since:
2009-08-22

That's the point I'm trying to make. Numbers are arbitrary.


No they are not arbitrary, they just need to be interpreted like all data.

Horace Dediu at Asymco has a short piece on the iPhone launch figures compared to previous Apple, and a some Samsung Galaxy phone, launch sales data.

http://www.asymco.com/2013/09/23/iphones-5c-and-5s-launch-performan...

Taking into account the inclusion of China in this years iPhone rollout there was an impressive 29% increase over last year's iPhone roll out sales.

For comparison Motorola is shipping 100,000 Moto X phones per week, a somewhat slow start for the long-awaited phone.

The figure, quoted by Motorola CEO Dennis Woodside in a Reuters article, would net out to just more than 5 million shipments annually if Motorola continues at that pace. For comparison's sake, Apple shipped 31.2 million iPhones in its most recent quarter.

Reply Score: 1

RE[4]: Comment by MOS6510
by Thom_Holwerda on Wed 25th Sep 2013 18:07 UTC in reply to "RE[3]: Comment by MOS6510"
Thom_Holwerda Member since:
2005-06-29

For comparison Motorola is shipping 100,000 Moto X phones per week, a somewhat slow start for the long-awaited phone.


Here you go again.

The Moto X is only available in the US and Canada. That's it. 350 million people. Comparing that to a phone available to more than 2 billion people is disingenuous - which is exactly my point, because my numbers here are just as arbitrary and ridiculous, as I clearly state myself.

Reply Score: 3

RE[5]: Comment by MOS6510
by jared_wilkes on Wed 25th Sep 2013 19:08 UTC in reply to "RE[4]: Comment by MOS6510"
jared_wilkes Member since:
2011-04-25

The point is: Apple continues to be restrained by market access and production capacity, but they are successful.

Motorola has been such a failure that they are even more restrained by market access and production capacity.

In other words, why is it bad if Apple's getting new growth from new market access, but it's good (or at least not open to criticism) that Motorola doesn't have the means or capacity to address a larger market? Moreover, you spend an awful lot of time trying to argue that you don't know if Apple is successful or not. Is the same true of others? Relative to others, can it be said that Apple is successful?

Trying to wave your hands and claim you can't say anything about anyone is foolish and just plain wrong.

Reply Score: 3

RE[5]: Comment by MOS6510
by Tony Swash on Wed 25th Sep 2013 19:43 UTC in reply to "RE[4]: Comment by MOS6510"
Tony Swash Member since:
2009-08-22

The Moto X is only available in the US and Canada. That's it. 350 million people..


I guess Motorola should get a bit of a move on then ;)

There was an interesting interview with Eric Jackson from Forbes at Ben Thomson's excellent Stratechery site today.

http://stratechery.com/2013/an-interview-with-eric-jackson-at-forbe...

This is a pertinent excerpt.

The iPhone was in many ways a once-in-a-generation business opportunity: carriers are paying Apple handsomely to disrupt the personal computer business, just because Apple’s product happens to have an app that makes phone calls. Oh, and that product is one that is a necessity for almost every person on earth. It’s difficult to imagine a more lucrative opportunity, and fair to question how Apple can grow from such a large profit baseline (then again, it was hard to imagine a better business opportunity than levying a massive tax on every single computer just as computers became a necessity for every business and home, i.e. the Microsoft model, yet it turned out even better opportunities existed).

What’s not justified is the assumption that iPhone sales are going to suddenly collapse in the face of lower-cost, “good-enough” Android-based phones. This sort of thinking is primarily the provence of analysts with their roots in PCs who witnessed the race to the bottom among Windows OEM’s, and it ignores that the PC market was primarily driven by businesses, where the buyers were not the users, and thus highly focused on price. The iPhone, on the other hand, along with all of Apple’s products, competes for consumers, and every other consumer sector offers evidence that there is a sizable portion of consumers who make purchase decisions for more reasons than just price. Apple, with their focus on the user experience, has always been a consumer company, and in a lot of ways their success over the past decade is a result of consumers embracing technology just like businesses did in the 80s and 90s. The right company, in the right place, at the right time with the right product.

Reply Score: 2

RE[2]: Comment by MOS6510
by Carewolf on Wed 25th Sep 2013 18:14 UTC in reply to "RE: Comment by MOS6510"
Carewolf Member since:
2005-09-08

This. All indications are that Apple is selling every iPhone they can produce.

All indicates suggest that except of couse what Apple themselves are saying. The sold out 5S, not 5C. Not word officially on how many of each was sold though, but there are still plenty of 5C, but they also produced a hell lot more of those than 5S.

Reply Score: 2

v RE[3]: Comment by MOS6510
by SojoPhoto on Wed 25th Sep 2013 18:42 UTC in reply to "RE[2]: Comment by MOS6510"
Iphone sales ..
by kristoph on Wed 25th Sep 2013 11:43 UTC
kristoph
Member since:
2006-01-01

Apple has been doing this at each launch. I mean, at each launch more markets are available on the first day. By the logic you put forth, Apple has been 'loosing' fr years as their penetration is decreasing each year.

The truth is that Apple simply ran out of phones and that's where their sales number came from (this has happened for many years now).

The real number is going to be the total sales over this quarter and next quarter. That will tell you the total number of iPhone sales and you'll be able to compare it to last year.

All that said I personally can't imagine Apple will have 80% sales growth on the iPhone. It's a premium product (even the 5c) and it's been available for years now to pretty much all the consumers who can afford it. Apple has an amazing satisfaction rating so upgrades will account for a good percentage of sales but I just don't see where Apple goes from here, in terms of market share, unless they make a real budget version. I know we all like to argue over how many people are switching from one platform to the other but, really, statistically, that's just a rounding error.

( Today, the 'real' budget versions come from secondary markets which are very strong. I sold my iPhone 4S for 65% of the price I paid for it, off contract, which is pretty insane given its 2 years old. Of course Apple makes nothing from this. )

Reply Score: 5

Sarcasm is a tricky bugger...
by Vanders on Wed 25th Sep 2013 12:23 UTC
Vanders
Member since:
2005-07-06

Thom, I think the sarcasm may have been lost on some people.

Reply Score: 3

it's a numbers game
by microbits on Wed 25th Sep 2013 12:35 UTC
microbits
Member since:
2011-11-01

If i could sell 9 phones in a weekend i would be a happy bunny.
Fair play to them i wish them every success

Reply Score: 1

jared_wilkes
Member since:
2011-04-25

If the point is that numbers are arbitrary, wouldn't it have been a more convincing argument to try to make Nokia, BlackBerry, or Motorola's numbers look good?

Oh, they aren't that arbitrary.

Reply Score: 4

Neolander Member since:
2010-03-08

If the point is that numbers are arbitrary, wouldn't it have been a more convincing argument to try to make Nokia, BlackBerry, or Motorola's numbers look good?

Oh, they aren't that arbitrary.

You may think that this is impossible, but Nelson has actually been doing this with Nokia numbers for quite a long time now.

Numbers can really tell everything, if you take the time to find those that prove your point best. That's probably because reality, unlike market number interpretations, is never a fully black and white picture.

Edited 2013-09-25 15:30 UTC

Reply Score: 1

jared_wilkes Member since:
2011-04-25

No. Nelson tries. He does not succeed. 99.9% of the people reading Nelson's posts aren't going to come away with Thom's purported claim: that numbers are completely arbitrary and can be made to look good or bad.

Again, If Thom had actually attempted this exercise from the perspective of any of these failing companies to make them look positive, he would likely not convince anyone and his point would fall apart.

Reply Score: 2

Nelson Member since:
2005-11-29

I read the financial reports, stake out a position, and make a prediction. I invest my own money into my positions. I reap good returns.

Most everybody else are just Monday morning quarter backs. I implore you, or anyone else for that matter to find a prediction I've made which has been off the mark.

I've pretty much called it this entire time. Come on, I mean look at last thread, we have people who don't understand CEO compensation and think its a grand conspiracy to sell to Microsoft. These are the special types I'm dealing with.

Reply Score: 3

dpJudas Member since:
2009-12-10

I read the financial reports, stake out a position, and make a prediction. I invest my own money into my positions. I reap good returns.

Most everybody else are just Monday morning quarter backs. I implore you, or anyone else for that matter to find a prediction I've made which has been off the mark.

I'm sorry, but buying stock is in no way any proof that you are not also a Monday morning quarter back. Lots and lots of sports fans also gamble on who wins the next match (and some of them even win a lot, like you claim to do), but that *still* makes them Monday morning quarterbacks.

Yes, it is becoming a bad habit of mine to pick on your posts. I know. I should learn to just ignore your constant random flames left and right.

Oh, and just for the record. We are *all* Monday morning quarterbacks. That's the entire point of this type of discussion forums!

I've pretty much called it this entire time. Come on, I mean look at last thread, we have people who don't understand CEO compensation and think its a grand conspiracy to sell to Microsoft. These are the special types I'm dealing with.

See, you could just have said this, without the flames, and almost everyone would have agreed with you. Or list the 5 most obvious reasons for why the Elop conspiracy theory is so incredibly far fetched (such as Microsoft losing more on a Nokia death than they win). Then again, why bother. It is the equivalent of trying to convince a 9/11 denier that terrorists really did fly planes into those buildings. ;)

Reply Score: 1

Comment by majipoor
by majipoor on Wed 25th Sep 2013 12:54 UTC
majipoor
Member since:
2009-01-22

With your logic, you cannot compare any sales number, for whatever company and whatever product because contexts are always somehow different.

For example, Android and iOS are not aimed at the same customers (price, features, open vs closed, ecosystem etc. are all different and will attract different markets), so how can you compare the Android market share with iOS market share for example?

One can argue that Android market share is obviously bigger than iOS because iPhone pricing limit them to a smaller segment and because less carriers have the iPhone available. Did you try to compute Android and iOS "penetration" as you do here? You may find that iOS penetration is actually bigger than Android on their respective market. Would you then say that iOS is more successful than Android?

The overall smartphone market also evolve quickly and the market is a lot bigger this year compared to last year: you forgot to take this point into account in your penetration ratio. Too bad because it would have been even less favorable for Apple.

Come on: the only important number concerning sales or market share for a company and the only way to compare how successful a product is is to consider the revenue and profit for this company, because this is all that matter when trying to know whether a company is successful, whether you like it or not.

If you don't care about revenue or profit, then you shouldn't care about how many iPhones Apple did sell last week-end.

If you care, then Apple did actually and without any doubt make a lot more money last week-end compared to last year.

Reply Score: 3

RE: Comment by majipoor
by Thom_Holwerda on Wed 25th Sep 2013 13:07 UTC in reply to "Comment by majipoor"
Thom_Holwerda Member since:
2005-06-29

Android and iOS are not aimed at the same customers


This is nonsense. The best selling Android handsets target very much the same market as the iPhone does.

Reply Score: 5

RE[2]: Comment by majipoor
by henderson101 on Wed 25th Sep 2013 13:23 UTC in reply to "RE: Comment by majipoor"
henderson101 Member since:
2006-05-30

This is nonsense. The best selling Android handsets target very much the same market as the iPhone does.


To single out one manufacturer; the multitude of Samsung Galaxy phone models all target the same people? I see..

Reply Score: 4

RE[3]: Comment by majipoor
by chithanh on Wed 25th Sep 2013 14:43 UTC in reply to "RE[2]: Comment by majipoor"
chithanh Member since:
2006-06-18

The best selling Android smartphone in 2012 was the Samsung Galaxy S3. It targeted the high end market.

The best selling smartphone in 2013 (of all platforms) will likely the be Galaxy S4. It targets the high end too.

Reply Score: 2

RE[4]: Comment by majipoor
by henderson101 on Wed 25th Sep 2013 15:05 UTC in reply to "RE[3]: Comment by majipoor"
henderson101 Member since:
2006-05-30

The best selling Android smartphone in 2012 was the Samsung Galaxy S[3/4]


But Samsung make a lot more than just that. The Galaxy Y[oung] and Ace models for example. They also sell a lot of "last year and prior" models in the current year and the feature parity of the different Galaxy Sx models with in the current year is not equal (the S4 mini, for example, is a lot less powerful.)

My point is very much that blanket observations cover over and distort a lot of the reality in a market when applied across a specific data-point.

Reply Score: 2

RE[5]: Comment by majipoor
by SojoPhoto on Wed 25th Sep 2013 18:32 UTC in reply to "RE[4]: Comment by majipoor"
SojoPhoto Member since:
2011-12-08

And Apple does the same with iPhone 4s, 5c, and 5s. What's the difference?

Reply Score: 1

RE[6]: Comment by majipoor
by jared_wilkes on Wed 25th Sep 2013 20:59 UTC in reply to "RE[5]: Comment by majipoor"
jared_wilkes Member since:
2011-04-25

Samsung sold 213 million mobile phones in 2012. But it took them 3 years to reach 100 million sales for the entire Galaxy S line. Samsung's latest and greatest is a small proportion of their entire sales; Apple's latest and greatest is the lion share of their entire sales.

Reply Score: 1

RE[3]: Comment by majipoor
by JAlexoid on Wed 25th Sep 2013 14:53 UTC in reply to "RE[2]: Comment by majipoor"
JAlexoid Member since:
2009-05-19

Galaxy S3/4 + minis have the same target demographic as all iPhones.

Reply Score: 3

RE[2]: Comment by majipoor
by Nelson on Wed 25th Sep 2013 13:27 UTC in reply to "RE: Comment by majipoor"
Nelson Member since:
2005-11-29

I think this is starring to become more true, in my own unscientific observations Galaxy is becoming a brand with premium attributes in the mind of consumers.

That's a huge win for Samsung, and long term I don't predict Apple will maintain any major advantage in premium devices, but it will take a while to erode their enormous inroads in minds and hearts.

Reply Score: 2

RE[2]: Comment by majipoor
by jared_wilkes on Wed 25th Sep 2013 15:33 UTC in reply to "RE: Comment by majipoor"
jared_wilkes Member since:
2011-04-25

And they (high-end Android devices trying to compete with Apple's iPhone) represent a small fraction of the total Android market.

Reply Score: 2

RE[2]: Comment by majipoor
by Tony Swash on Wed 25th Sep 2013 22:18 UTC in reply to "RE: Comment by majipoor"
Tony Swash Member since:
2009-08-22

"Android and iOS are not aimed at the same customers


This is nonsense. The best selling Android handsets target very much the same market as the iPhone does.
"

I am going to link to another piece by Ben Thomson called "The $550 iPhone 5C makes perfect sense" which is a very preceptive and interesting dissection of the phone market and how and why Apple targets certain market segments.

http://stratechery.com/2013/the-550-iphone-5c-makes-perfect-sense/

Excerpt from summary (but read the whole thing - it's very illuminating).

[q}
To summarize, Apple’s decisions with the 5C are completely rational.

Apple believe the iPhone 5 is the standard for “good enough” and won’t produce a “new” iPhone below that level. That means higher prices this year.

Apple’s “best” markets are the American-style ones, for reasons beyond simply subsidies. Thus, it makes sense for them to optimize pricing for those markets – i.e. $550/$99.

Expanding a product line is best done incrementally to ensure you are not leaving money on the table. You can’t have a high-end and low-end with nothing in the middle.

There are two risks in this approach, both having to do with apps. The first is losing the “new and shiny” app advantage. Incremental change will only slightly slow Android’s expansion, and while much of that expansion has low engagement, low engagement/user x many more users still equals more total engagement. Were, based on this equation, new apps and features to start coming to Android first, Apple would lose a major differentiator.

However, I think this risk is a small one. The 5C will solidify Apple’s hold on the United States, where just under 50% of app developers live. Moreover, the 5C is focused on those blue pie slices – the Android users who are driving engagement. [/q]

Reply Score: 1

RE[3]: Comment by majipoor
by galvanash on Thu 26th Sep 2013 01:08 UTC in reply to "RE[2]: Comment by majipoor"
galvanash Member since:
2006-01-25

I agree with that analysis to be honest, but Apple still hasn't introduced the product the market thought the 5C was going to be - a phone that will sell in unsubsidized markets in volume.

Maybe they never will. They certainly don't have to - but eventually the shear inertia of all of the cheaper phones will catch up with them...

I hope they try at some point - but personally I don't want to see a "cheap" iPhone - Id rather see something totally different - a really good feature phone, something like the ipod nano in phone form. No app store, just a really solid phone/music player with some good useful built in apps optimized for what would have to be much lower end internals. Small but good screen with excellent build quality.

That would be somewhat radical, and it won't win in comparisons with Android devices on the features, but I think there is a market for "just a good phone" at say $199 no contract if it were extremely small and pocketable.

I think the components to build such a thing are all there and the price is doable - its just a matter of the battery, they have to get about 2x better than they are now to make it work most likely.

Anyway, just a though. Doubt they would go this route - there is too much momentum tied up in the app economy.

Reply Score: 2

RE[4]: Comment by majipoor
by MOS6510 on Thu 26th Sep 2013 06:46 UTC in reply to "RE[3]: Comment by majipoor"
MOS6510 Member since:
2011-05-12

I don't think a cheap phone would make much business sense for Apple.

A normal iPhone makes them money per sale, but also after that when users buy apps, books, music, etc...

When Apple markets a cheap phone to poor countries the phone won't make them much money. If it won't run all the apps they can't sell those and the people would probably not spend much anyway.

So it takes a lot of effort, while it won't make them much and gives them another product to support.

I do think a cheap iPhone or Apple phone would sell a lot in less rich countries.

Reply Score: 2

RE[4]: Comment by majipoor
by unclefester on Thu 26th Sep 2013 09:11 UTC in reply to "RE[3]: Comment by majipoor"
unclefester Member since:
2007-01-13

I hope they try at some point - but personally I don't want to see a "cheap" iPhone - Id rather see something totally different - a really good feature phone, something like the ipod nano in phone form. No app store, just a really solid phone/music player with some good useful built in apps optimized for what would have to be much lower end internals. Small but good screen with excellent build quality.

That would be somewhat radical, and it won't win in comparisons with Android devices on the features, but I think there is a market for "just a good phone" at say $199 no contract if it were extremely small and pocketable.


They're called Nokias and sell for as little as $30 unlocked.

Reply Score: 3

RE: Comment by majipoor
by galvanash on Thu 26th Sep 2013 00:31 UTC in reply to "Comment by majipoor"
galvanash Member since:
2006-01-25

If you care, then Apple did actually and without any doubt make a lot more money last week-end compared to last year.


Yes, there is no doubt about that - agreed. But last year they did not launch in China until their next quarter - and they moved 2 million iPhone 5 in that launch... They also did not count 4S sales last year, so comparison is problematic because this time they did count 5C sales.

Their launch weekend was great, and their quarterly is going to be equally great. They did a wonderful job positioning all the pieces to make sure everything looks wonderful when you look at it on a compressed timescale - this is the magic quarter for them so shifting things around a bit to highlight it makes sense for them.

Are they actually increasing profitability? No, their margins have been dropping steadily for a while now. Is actual volume going up year on year? Won't really know until the yearly reporting because of the change in the launch windows and the introduction of the 5C - it probably will go up though, I just don't think by as much as most people looking at the numbers with blinders on think. Someone mentioned 80%!! HAH - no way in hell - it won't even be half that.

Frankly, although I sound like I'm being down on them, I think this sort of steady sustained growth in volume is probably a good thing overall. The stock market analyst punished their stock price going into this launch with laughably low volume predictions and they definitely blew by those easily. I think they will have a great year, just not as great as this 5 million vs 9 million comparison implies.

Reply Score: 2

I may not always agree with you...
by SojoPhoto on Wed 25th Sep 2013 13:08 UTC
SojoPhoto
Member since:
2011-12-08

But this is why I trust your opinion all the same. This is what I have been saying all along, and with each new iPhone, they increase the populus of people able to receive it.

Reply Score: 1

henderson101 Member since:
2006-05-30

But not the populous of people who *want* to receive it. That is why Thom's observation is flawed.

Reply Score: 3

Launch weekend sales
by chithanh on Wed 25th Sep 2013 14:54 UTC
chithanh
Member since:
2006-06-18

I think a better metric to judge the success of the launch weekend than absolute numbers or potential vs. actual buyers is the percentage of smartphones sold that year.

For the iPhone 5 launch weekend, they sold 5 million (0.7%) of 700 million total smartphones in 2012 (according to Strategy Analytics).

For the iPhone 5S/5C launch weekend, they sold 9 million (0.9%) out of an expected 1 billion total units in 2013.

So Apple did better. Not much better, especially if you take into account that they launched two devices, but still.

Reply Score: 2

Comment by leos
by leos on Wed 25th Sep 2013 15:51 UTC
leos
Member since:
2005-09-21

The iPhone 5 was available to 720 million people at launch, and sold 5 million units. This is a penetration of 0.69%. The iPhone 5C and 5S, however, are available to 2078 million people, and sold 9 million units, which constitutes a penetration of 0.43%


Not logical. Just because the phone is for sale in China doesn't mean it is available to everyone in China. A majority of the population is not in the financially able to buy a smartphone so don't count as potential customers.

Edited 2013-09-25 15:52 UTC

Reply Score: 1

RE: Comment by leos
by Thom_Holwerda on Wed 25th Sep 2013 15:59 UTC in reply to "Comment by leos"
Thom_Holwerda Member since:
2005-06-29

*wooosh*

Reply Score: 1

RE[2]: Comment by leos
by Nelson on Wed 25th Sep 2013 16:44 UTC in reply to "RE: Comment by leos"
Nelson Member since:
2005-11-29

Its not exactly obvious you're parodying yourself.

Reply Score: 3

RE[2]: Comment by leos
by leos on Wed 25th Sep 2013 20:45 UTC in reply to "RE: Comment by leos"
leos Member since:
2005-09-21

*wooosh*


You seem to be confused about the meaning of the "whoosh" comment. This comment is used when someone doesn't get a joke. Obviously your article is not a big joke, you are just pointing out that numbers can be interpreted in different ways. And I'm pointing out that the way you interpreted them makes no sense.

Reply Score: 2

RE[3]: Comment by leos
by galvanash on Thu 26th Sep 2013 00:41 UTC in reply to "RE[2]: Comment by leos"
galvanash Member since:
2006-01-25

And I'm pointing out that the way you interpreted them makes no sense.


That was the joke... He already knows that - that was the point.

By leaving out important details you can make the results look however you want - some people notice such flaws but in the big picture it really doesn't matter much because all anyone notices is the headline.

Edited 2013-09-26 00:46 UTC

Reply Score: 3

RE: Comment by leos
by unclefester on Thu 26th Sep 2013 02:25 UTC in reply to "Comment by leos"
unclefester Member since:
2007-01-13

The Chinese urban middle class (all of whom can afford a smartphone) is actually around 500 million people - 50% larger than the entire population of the USA.

Reply Score: 3

RE[2]: Comment by leos
by leos on Sat 28th Sep 2013 06:07 UTC in reply to "RE: Comment by leos"
leos Member since:
2005-09-21

The Chinese urban middle class (all of whom can afford a smartphone) is actually around 500 million people - 50% larger than the entire population of the USA.


Way to make my point.

Reply Score: 1

Comment by Drumhellar
by Drumhellar on Wed 25th Sep 2013 17:07 UTC
Drumhellar
Member since:
2005-07-12

The only reason I'm writing this is to illustrate how numbers are entirely arbitrary, and it's easy to make silly comparisons and claim an arbitrary victory - or, change perspective a bit and claim arbitrary defeat, as I've done here.


It's not enough to criticize numbers that lack perspective if you make absolutely no attempt to provide some perspective. However, I have done just that.

It's not right to equate all of 1.3 billion people to the ~750 million that live in the other launch countries, as far as consumerism is concerned, because there are many in China that are rather poor, or spend their money on less consumer-oriented items, compared to the other launch countries. By including everybody in each country as a potential customer, the only prerequisite for buying an iPhone at launch is "Capable of Breathing."

That's a poor prerequisite. I have chosen a better one: Car ownership. I think car ownership is a much better criteria than "Capable of breathing". I'm just making an assumption that the majority of people who bought an iPhone at launch own a car, but I think it's safe to assume that most people that can't afford to own car wont' spend their money on an iPhone.

Using that, here are the car-ownership stats for the launch countries, minus China:

US 254,212,610
AU 16,261,560
CAN 21,172,160
FR 37,974,600
GER 46,841,080
JAP 75,411,600
PR 2,328,545
UK 32,816,370
Sing* 2,452,800
HK* 3,093,000

Now, a couple caveats to those numbers. First, due to it's high density, Singapore has tight restrictions on car ownership. Hong Kong does not restrict ownership, but it's ownership rate is half that of Singapore. For those reasons, I adjusted their numbers to 60% ownership (Which is still lower than most of the countries), then subtracted 1 million and 1.4 million from Singapore and Hong Kong, respectively. Car ownership is lower in densely populated areas, since public transportation systems tend to be more effective.

Back to the numbers: This means a total of 492,564,325 cars are owned in the launch countries.

Where does China stand? Well, China has a per capita car ownership rate of 8.5%, so that turns into 114,835,000 vehicles, which increases the number of car-owning consumers in launch countries by 23%.

So, for a 23% increase in potential customers, Apple nearly doubled their iPhone launch sales compared to the iPhone 5.

That is very successful. Apple should be applauded.

Reply Score: 3

RE: Comment by Drumhellar
by unclefester on Thu 26th Sep 2013 09:34 UTC in reply to "Comment by Drumhellar"
unclefester Member since:
2007-01-13

An absurd argument. Most Australian 13-15 year olds have smartphones [often top of the range models]. None have cars [or drivers licences.]

Reply Score: 3

seriously?
by siraf72 on Wed 25th Sep 2013 18:13 UTC
siraf72
Member since:
2006-02-22

This has to be one of the most bizarre posts on OSnews. Shipping 9 million units is impressive. The end. Regardless of who does it and regardless of how many people "it's available to". The only thing arbitrary here is the use of "penetration" (seriously?) to down play what was clearly a successful launch.

Reply Score: 4

RE: seriously?
by unclefester on Thu 26th Sep 2013 09:05 UTC in reply to "seriously?"
unclefester Member since:
2007-01-13

Shipping 9 million units is impressive. The end.


Unfortunately 3-4 million are still sitting on shelves and almost no one want to buy a 5C.

Reply Score: 3

RE[2]: seriously?
by siraf72 on Thu 26th Sep 2013 13:29 UTC in reply to "RE: seriously?"
siraf72 Member since:
2006-02-22

Unfortunately 3-4 million are still sitting on shelves and almost no one want to buy a 5C.


Obviously if that's true that changes things. Source?

--Edit-- No need for the source. saw the link you posted. Not quite as sensational as the Apple PR blurb suggests then, still damn good.

The 5C is just a rebranded 5 and there are people with budget considerations that will settle for it. Just as there were people still buying the 4s when when the 5 became available.

Edited 2013-09-26 13:32 UTC

Reply Score: 2

RE[3]: seriously?
by unclefester on Sat 28th Sep 2013 06:34 UTC in reply to "RE[2]: seriously?"
unclefester Member since:
2007-01-13


The 5C is just a rebranded 5 and there are people with budget considerations that will settle for it. Just as there were people still buying the 4s when when the 5 became available.


The 5C is extremely expensive in non-US markets. [It is about the same price as the Nokia 1020 in Australia.]

Reply Score: 2

RE[4]: seriously?
by siraf72 on Sun 29th Sep 2013 10:17 UTC in reply to "RE[3]: seriously?"
siraf72 Member since:
2006-02-22

Agreed. not exactly a bargain without a contract.

Reply Score: 2

Comparisons...
by galvanash on Wed 25th Sep 2013 18:37 UTC
galvanash
Member since:
2006-01-25

I get Thom's point. What bugs me about this years release is that Apple is using a rebadged product to make it impossible to actual determine what exactly the numbers mean this time around... You see all of these "whatever, 9 million devices is impressive no matter what" posts - its simply not. Nothing is impressive "no matter what" - the details matter:

1. Apple sold 5 million iPhone 5 at launch last year. They also sold some number of the 4S, but we don't know how many because they did not disclosed that number. They also sold of out initial inventory of the 5 pretty much immediately - so they sold 5 million units of their top tier device to consumers in the launch weekend. They did not sell out of 4S inventory by anecdotal accounts, and we don't know either what the initial inventory was, nor how many 4S were sold.

2. Apple sold 9 million iPhone 5S/5C this year. We have no idea how many 5S they sold, but activations show that roughly 80% of sales were the 5S. However, just like last year, they did not sell out of the 2nd tier device - they are still available almost everywhere (even in the US where it actually sold well). It appears that all or very nearly all 5S inventory was sold out as well.

So last year Apple sold 5 million devices at launch - no one cared about 4S sales because it was already in the channel and it is not terribly interesting anyway. But if we did count the 4S, well the number would be higher by some degree...

But this year... How many 5S did they sell? No idea. Estimates range from 4.4 million to 7 million, i.e. poor to ridiculously great. Why do we not know? Because they rolled their 2nd tier device sales into their total. They did not do this last year. Some (potentially large) number of 5Cs are still sitting on shelves at carriers (just like the 4S did last year), but those are part of that glorious 9 million total... How many? Don't know, but its definitely north of zero.

Im not going to make any argument about whether this is better or worse than last year, because frankly it is a confusing mess. I have my own opinions, but honestly Im not interested in trying to convince anyone because that isn't the point of this reply.

When the 5 went on sale last year in China Apple sold 2 million of them at launch. So the combined total of 5 sales last year was 7 million. If you add in the 4S sales last year (???) you would get a number that would be comparable to the 9 million sold this year. But we don't have that number. We don't really have any real numbers, what we have is a press release that is entirely true but tells the market nothing useful...

So yeah, it really is arbitrary. 9 million units, in isolation, sounds awfully impressive. It sounds especially impressive if you compare it to 5 million from last year (which is automatically what everyone does). But the comparison is completely meaningless.

Apple may as well said they sold 15 million of them, because they changed the size of the pie and the pie pieces... I have no doubt financially they did great - but are they doing better or worse than last year? No idea...

Really. If you combine lasts years launch total (5 million), the china launch total (2 million) and the number of 4S sold at both launches (???) that total may well be more than 9 million...

Edited 2013-09-25 18:49 UTC

Reply Score: 3

There's you problem...
by krreagan on Wed 25th Sep 2013 20:56 UTC
krreagan
Member since:
2008-04-08

"I've been thinking ..."

Well, therein lies your problem.

The new available population are much less likely to actually own a cell phone in the first place. Not to mention an "up scale" smartphone. Not all societies are equally wealthy or well off.

People can "spin" good news into bad news almost as easily as vise verse!

Krreagan

Edit: Whenever you see the phrase "in perspective", watch out!

Edited 2013-09-25 20:58 UTC

Reply Score: 3

"It's the economy, stupid"
by fabrica64 on Wed 25th Sep 2013 22:29 UTC
fabrica64
Member since:
2013-09-19

If you sell nearly 100% more iPhones you get nearly 100% more dollars and earnings in the same time window, that is what matter to determine if it was "success" or not

Reply Score: 1

wait and see...
by bnolsen on Thu 26th Sep 2013 02:40 UTC
bnolsen
Member since:
2006-01-06

Thom has a decent explanation of where these numbers come from.

apple always has big launches. The question is how good will they sell over time.

I've seen apple devices and to me they just look really out of date. As for the color of the 5c most iphones i've seen have aftermarket colored protector cases. I'll honestly be shocked if apples' future market trends change any.

Reply Score: 2

Slightly related...
by galvanash on Thu 26th Sep 2013 03:21 UTC
galvanash
Member since:
2006-01-25

If anyone actually wants a 5C off contract (not unlocked though), they are routinely going on ebay for $100 off retail in the states...

http://www.ebay.com/sch/Cell-Phones-Smartphones-/9355/i.html?_from=...

Be careful obviously as some will have bad ESNs - buyer beware and all that.

Edited 2013-09-26 03:23 UTC

Reply Score: 2

AdamC
Member since:
2009-07-25

Sadly you had left out the online order which should be numbered in their millions.

Sadly you forgot they sold out their stock of iPhone 5s

Sadly their is nothing like a hitwhore of an article.

Reply Score: 1

Bad analysis
by renox on Thu 26th Sep 2013 07:52 UTC
renox
Member since:
2005-07-06

China is a new market with lots of people but many of which are so poor that they wouldn't consider buying an iPhone, so the "penetration" numbers you gave are totally meaningless.

Reply Score: 2

RE: Bad analysis
by unclefester on Thu 26th Sep 2013 09:40 UTC in reply to "Bad analysis"
unclefester Member since:
2007-01-13

China is a new market with lots of people but many of which are so poor that they wouldn't consider buying an iPhone, so the "penetration" numbers you gave are totally meaningless.


The median wage in China is ~USD14,000. At least 500 million Chinese can easily afford an iPhone.

In China iPhones have less status than many local brands such as Xiaomi.

Reply Score: 3

RE: Bad analysis
by chithanh on Mon 30th Sep 2013 15:39 UTC in reply to "Bad analysis"
chithanh Member since:
2006-06-18

That didn't take long... iPhone 5C already sells at a discount in China:
http://bgr.com/2013/09/26/iphone-5c-discount-sale-china/

So no matter how many people in China would consider buying an iPhone 5C, Apple overestimated their number vastly.

Reply Score: 2

more a disaster than a triumph
by unclefester on Thu 26th Sep 2013 08:57 UTC
unclefester
Member since:
2007-01-13

Apple hasn't sold 9 million phones. It has delivered 9 million phones to sales partners. An estimated 3-4 million of these phones are still gathering dust on shelves.
http://www.marketwatch.com/story/apple-iphone-sales-closer-to-55m-p...

In Australia the 5c has been a total disaster with less than 5% of stock being sold.
http://www.theage.com.au/digital-life/mobiles/australian-telcos-str...

Every major iPhone retailer in Australia has ample stock of the Phone 5s available for immediate delivery.

In reality Apple has actually sold only 10% more phones than last year despite having two new models and 3x as many eligible customers. This is a disaster not a triumph.

Reply Score: 3

Penetration?
by Adam S on Thu 26th Sep 2013 15:36 UTC
Adam S
Member since:
2005-04-01

Really? I don't think you can make the results look however you want. You can, when you present meaningless numbers. But the fact is "penetration" is a nonsense number. It's foolish to invent those numbers, and the proof is that no one examines that statistic when you measure "success."

Apple depleted their inventory of one model of new phone. The second model inarguably sold well (how well is a mystery, and frankly, irrelevant, because the profits will speak for themselves at the next earnings call). Those are facts. Raw units shipped. Profit margin. Ability to restock inventory rapidly. All facts.

The other invented measures of success don't actually *tell* you anything. You can make your point, but that doesn't make your point valid. And that's the flaw here, pretending that you can use these numbers you claim can illustrate anything to actually convince anyone of anything.

Reply Score: 1

Your numbers are bogus
by lindkvis on Fri 27th Sep 2013 08:37 UTC
lindkvis
Member since:
2006-11-21

I probably should have read your post better.

Edited 2013-09-27 08:40 UTC

Reply Score: 1