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.

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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 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 Parent Score: 5

RE[2]: Comment by majipoor
by henderson101 on Wed 25th Sep 2013 13:23 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 Parent Score: 4

RE[2]: Comment by majipoor
by Nelson on Wed 25th Sep 2013 13:27 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 Parent Score: 2

RE[2]: Comment by majipoor
by jared_wilkes on Wed 25th Sep 2013 15:33 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 Parent Score: 2

RE[2]: Comment by majipoor
by Tony Swash on Wed 25th Sep 2013 22:18 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 Parent Score: 1

RE: Comment by majipoor
by galvanash on Thu 26th Sep 2013 00:31 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 Parent Score: 2