June's headlines may have belonged to the iPhone but Apple's third-quarter results served as a handy reminder it's the record-breaking Mac and unstoppable iPod that are driving business. Apple said Wednesday it sold 270,000 iPhones during the 30 remaining hours of its June quarter when the iPhone shipped, with 146,000 iPhones …
What is this "Mac" you speak of? Sounds like Apple ported the iPhone OS to a desktop computer...
What will those crazy Cupertino kids think of next...?
Apple's market share
IDC's preliminary estimate for worldwide PC shipments during 07Q2 is 58.8 million (http://www.idc.com/getdoc.jsp?containerId=prUS20789807). So "the record-breaking Mac" has "continued to amaze" you by achieving a 3% market share.
In this post, I use MATH to prove that Apple is talking out their ass.
They aren't going to sell 10 million iPhones by the end of 2008. Period. End of story. It's impossible.
Lets consider this. A sample "normal" quarter (Q2 2006) has 225,000,000 phones shipped. (Source: http://www.theinquirer.net/default.aspx?article=33574) Total. Across the entire industry. Lets be generous and say that by now, this has grown to 275,000,000 phones a quarter. There are about 6 quarters left between now and the end of 2008.
This means that industrywide, 1,650,000,000 (frankly I'm not sure who the hell is consuming all those phones, but whatever) phones will be shipped in 2008, worldwide. But the iPhone isn't available worldwide.
The iPhone is only available in the United States (for now).
And only one one carrier in the United States. AT&T has approximately a 30% market share. In 2006, there were 233,000,000 cell phone subscribers. The population of the United States is only 300,000,000-ish, so this is going to cap off at some point. I'll be generous and say 250,000,000 subscribers in the US by the end of 2008. AT&T has 75,000,000 subscribers by multiplying in their market share.
75,000,000 people to sell an iPhone to. That's a 13.3% uptake rate on the iPhone. The Razr, at the height of its popularity, only achieved 6.2%. And it was being given away for FREE at that time. If a free phone can only achieve 6.2%, how can an expensive gadget-phone come ANYWHERE near that?
Re: Apple's market share
"IDC's preliminary estimate for worldwide PC shipments during 07Q2 is 58.8 million (http://www.idc.com/getdoc.jsp?containerId=prUS20789807). So "the record-breaking Mac" has "continued to amaze" you by achieving a 3% market share."
Err... Perhaps you should read the article again... but in case the facts are too tiresome for you to revisit...
" Apple shipped a record 1.76m Macs, an increase of 33 per cent, while iPod continued its dominance of the MP3 landscape with 9.81m units, growing 21 per cent."
To me that reads 'Apple broke it's own sales record by selling 1.76m etc etc'. There is NO comment on market share anywhere in the post.
In any event, at a time when PC (as in Personal Computer) sales are starting to flatline a sales increase of 33 per cent is something I think most manufacturers would be very happy with.
And of course let's not get into the breakdown of 'worldwide shipments' including 'PC' cash registers and the like etc...
"And only one one carrier in the United States. AT&T has approximately a 30% market share. Etc"
But this assumes that people will buy the iPhone to use as a phone, and not instead as a colourful fashion accessory, or a beeping flashing toy. Apple needs to educate people that the iPhone is not a telephone; it is more than that. It is a lifestyle enabler. Everybody should have one, even the deaf, or people who have no-one to call.
The report implies that several tens of thousands of people have bought the phone but are not interested in it as a telephone; perhaps they use it purely as jewellery, or as a totem to ward off evil spirits, or as a hockey puck. This is Apple's market - all of humanity. Ten million is a tiny fraction of six billion. And of course some people might buy more than one phone, and there is the slowly-emerging dolphin/monkey market, which will eventually crave consumer goods.
Are you sure ? 225 million handsets in one quarter seems pretty impressive.
Maybe Apple have factored in a 50% failure rate for the iPhone? ;) That brings it back down to the 6.2% like the Razr - if you count replacement phones.
There are still quite a few people out there that will buy it just because its shiny and new or because of the Apple badge. Plus when it does launch in Europe it will probably be free or almost free on a contract.
Apple have a proven successful business model and lots of people are buying their stuff? How dare they! Quick, post some panicy numbers to feed the FUD machine...
A few more numbers..
If they're selling 9.8m ipods worldwide then in the 6 quarters to end 2008 they'll sell around 58.8m. That means that 10m iphones would be around one-sixth of their worldwide ipod sales - and how many of those ipods are the low price shuffles/nanos? It looks like they expect to be generating more revenue from iphone sales than ipod sales by the end of 2008 - sounds a bit loopy to me.
What's wrong - you septics run out of the letter S again? Maybe there's some lying round the back of Sesame Street you could use?
Whether it's MATH or MATHS, is irrelevant; it's actually ARITHMETIC you're using there...
Why have you taken so long to lay out your argument when you answer it exactly halfway through??
"The iPhone is only available in the United States (for now)."
Your statement is correct, and when is the scheduled launch of the iPhone outside the US???? Q4 2007 as I'm sure you are well aware.
Therefore the arguments you propose in your last two paragraphs are valid for, at most, the next 4 months. After which, the product will be released in upgraded form to countries with significantly more advanced, data capable networks in Europe and Asia. Potential target subscribers? Somewhat increased on the 233m in the US alone (ie. 3-4 times).
I have no idea whether the iPhone will then reach its target of 10m unit by the end of 2008 after that FULL YEAR of GLOBAL availability to a potential market of perhaps 1 billion (that would be 1% share, just to help you along).
It doesnt really seem quite such a tricky prospect as you imply though does it??
Apple isn't just aiming at selling to mobile phone users - it is also selling to iPod buyers. You have limited yourself to the mobile phone market. Apple only has to capture 10% of its own iPod market for the iPhone and it will clear 10 million iPhones by the end of 2008 with ease. Whether or not that happens is also debatable, of course.
FWIW, USA does not equal World. Is the US even the third biggest of the mobile phone markets? It's possible I guess, but I doubt it. Perhaps for "smartphones" but once the iPhone goes on sale before the end of the year in Europe and in Japan at the start of next, we shall see.
What are you on about??
"In this post, I use MATH to prove that Apple is talking out their ass."
I have no idea what you're talking about! Apple is planning to sell 10 million iPhones by the end of 2008. Your analysis is based on the iPhone only being sold in the USA (!) - don't you realise it will be available worldwide in 2008? Apple plan to sell 1 million phones by September in the US - they've already activated 140,000. That figure will be met easily, and Apple will EASILY sell 10 million phones worldwide in 2008.
To the 'MATH' genius...
You forget that by 2008 the iPhone *will* be available outside of the US - that's a much larger market to sell to...
So 10m units is ambitious, but not impossible.
Re: Apple's market share
Err, 3% is quite impressive given it's a single manufacture offering a totally different product...
HP have 19% share worldwide, but they are one manufacturer of a PC running Windows, which is certainly impressive... but 3% of the same market from one manufacturer making a product running a different OS that is used in far, far fewer businesses is a hell of an achievement in my book!
I'd be happy if i were Apple...
Assumptions can be dangerous stuff...
Here in Norway we now have MORE GSM subscriptions than citizens...
(I think it crossed that line last year, or possibly even back in 2005)
Also, the European launch is slated for January 2008, and THAT market is big...
Are they talking out there Ass
The US is not the only country in the world. How many potential customers do they have in Europe and Asia?
Proof in the pudding
Yes the European and Asian markets are a lot bigger, but also on the flip side they are also a lot more picky about their handsets.
If and only if Apple upgrade the phone to 3G will they be able to make those markets take interest in a way that will get them close to the 10mil mark. As Europe and Asia have superior networks it means offering a phone that doesn't make full use of the technology will put it on a back foot.
Another flip side though is that we have phone subsidies over here which could mean the iPhone could be available on a new contract for as little as £50-130, which in my book is not that expensive (been on the WinMob smartphone range for a while hence don't really get that many phones for free or dirt cheap anymore).
IMO I think 10mil is slightly too high a target for them to reach, just purely because the mobile phone market is extremely difficult and the only companies that survive are those that have other product strengths. A lot of the smaller companies (and even some of the big ones) decided to drop their mobile phone ambitions due to manufacturering costs, the companies that stayed did so because they had access to cheap screen technology, which was at the time the most expensive component. At least Apple have this going for them, but they will only be able to sustain the iPhone arm of the business as long other product sales keep increasing and the iPhone really does make some headway. Without that they will be like many other corporates that use their cash making divisions to support their mobile phone ambitions.
What happened to the good ol days when apple focused sales on computers and not accessory's?
I fear those who have macs...are about to get shafted.
how come no one spotted this??
from the third post :
"A sample "normal" quarter (Q2 2006) has 225,000,000 phones shipped"
Well then , thats already 215m more than they 10m they wanted in a year. LOL
And we are expected to trust your maths when you mistake millions for thousands
in other breaking news, a man woke up. . .
Re: Re: Apple's market share
Ron says: "...at a time when PC (as in Personal Computer) sales are starting to flatline, a sales increase of 33 per cent is something I think most manufacturers would be very happy with."
In the same quarter, HP's PC shipments grew 36.5%, Acer's PC shipments grew 55.4%, Lenovo's PC shipments grew 22.3%, and Toshiba's PC shipments grew 21.5%. The growth in HP's shipments alone comfortably exceeded the total number of Macs sold that quarter.
So in the original story Apple "continued to amaze" by breaking its own sales records? Ok. I agree: I am amazed that so many people bought a Mac.
Scott says: "...3% of the same market from one manufacturer making a product running a different OS that is used in far, far fewer businesses is a hell of an achievement in my book!"
Agreed. Imagine where Apple would be today if iPods had a 3% market share.
RE: how come no one spotted this??
Seanie Ryan: ""A sample "normal" quarter (Q2 2006) has 225,000,000 phones shipped"
That's all phones produced by all manufacturers.
edit to above
ok, now i am laughing at myself... the figures quoted above are for the industry!
going back under my rock
> If and only if Apple upgrade the phone to 3G will they be able to make those
> markets take interest in a way that will get them close to the 10mil mark. As
> Europe and Asia have superior networks it means offering a phone that doesn't
> make full use of the technology will put it on a back foot.
Wow, it's amazing how the expert market analysts just post their advice for free on The Register!
For one thing, I do suspect that Apple knows that 3G is better than 2.5G in the majority of cases. (For the cases where it's not, see prior articles by The Reg, where they talk about the potential for a 3G iPhone, if it were to sell modestly well, to completely overwhelm European 3G networks, whereas there is apparently plenty of spare EDGE capacity.)
But even if it does come out as 2.5G/EDGE, I think that you mistake your own (presumably geek-centric) viewpoint for that of the general public. There are people who won't buy the phone because it's not a 3G phone, and then there are those who will try it out and say 'that's fast enough for me' and buy it anyway. (This is not to imply that there aren't other categories, of course). Presumably you are in the former category, but unless there are lots of people like you who are willing to sit around and deride the iPhone for not being 3G and make fun of anyone who buys one for being stupid even if it does fulfill their needs, expect there to be plenty of people in the second category too.
Market favours Iphones - No real challenge so far
Apple is going full steam on production of Iphones.Being in the business of MP3 we are experiencing shortage in supplies of ipods. We are told chips meant to manufacturer the ipods are utilised for the Iphone production.
As we look at it, there are many gains for Apple. Ofcourse, Apple might find it more profitable to maufacture and sell iphones vis-a-vis ipods. Also, it is helping Apple to control the Ipod market - Supply & demand, Price Parity etc.. which is most needed for a brand. Thirdly, with festival seasons coming up for the next 6 months, most networks might decide to get in with iphones as no other "break through" model from any other brand (say Nokia, Sony Ericsson, Motorola, Samsung) is available in Mobile Phone industry currently. Either new models of other brands are not rightly priced, or consumers are not taking really fancy for these models, as no real hype is getting attached to these ones as is with Iphones. Afterall, Apple is marketing iphones very smartly... and their already is a Halo effect on Iphones in rest of the world, as something which only US currently enjoys and others are desperate to get but can't!!! I believe, a lot of people in other parts of the world will pounce on it when launched say in europe.
Looks like, the market/industry dynamics is in their favour on their "Iphone Mission -10Mn by 2008". Market seems to favour Apple in pursuing their ambitions on a third line of business.
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