Much noise has been made of the staggering numbers emanating out of the hallowed halls of One Infinite Loop in recent years. APPL topped $900-billion. iPhone sales hit record levels and paused. The Mac hit record levels and paused. iPad hit record levels, paused, dropped, and seem to have stabilized. Apple’s Services business has become the fastest growing segment of the Apple economy and larger than anything except the iPhone.
As I wander through everything I read about Apple I find a few numbers that don’t seem to add up. Here’s a big one. Marketshare. Google claims that just over 2-billion Android devices are in the wild. Apple claims that just over 1-billion iPhone and iPad devices are in the wild.
What’s wrong with those numbers?
They don’t match the obvious. Apple’s iPhone unofficial marketshare is about 15-percent while Google’s Android owns well over 80-percent. There may be other reasons why actual iOS marketshare comes in closer to 35-percent than 15-percent, but you get the idea.
Mac vs. Windows. Now, this one is not an Apple to apples comparison because Windows is an OS and the Mac is a personal computer, but Apple’s Mac seems to have prospered mightily against Windows. Here’s how. No, it’s not marketshare because Apple doesn’t seem to care much about marketshare as a performance metric.
The Mac has climbed to #4 on the PC manufacturing list behind Dell, HP, and Lenovo. All three make more PCs than Apple makes Macs. Yet, other reports indicate that Apple maintains about 50-percent of the entire personal computer industry’s profits.
That sounds like Apple, right?
More numbers that need to be looked at include annual iPhone production. Apple makes somewhere over 200-million iPhones each year. That number may grow a bit in 2018 thanks to iPhone X success but look at the iPhone line. Apple won’t sell 200-million iPhone X’s this year, even with larger models expected late in the summer.
Because iPhone SE, iPhone 6s and 6s Plus, iPhone 7 and iPhone 7 Plus, iPhone 8 and iPhone 8 Plus, and, of course iPhone X. That’s eight iPhone models on sale around planet earth, so no single model accounts for a majority of sales.
Recent news headlines say iPhone X is in trouble. Anthony Cuthbertson:
Rumors stemming from Apple analysts suggest that a reduction in orders means iPhone X production may cease as early as this summer, which would be the first time Apple has discontinued an iPhone before unveiling a new model.
The rumor mongering continues with Gordon Kelly:
KGI Securities’ analyst Ming-Chi Kuo says disappointing sales of the iPhone X will lead to the cancellation of the model “with production ceasing in the summer”. This would be the first time Apple has canceled an iPhone model after just one generation since the iPhone 5C in 2014.
Fortunately, in Fortune, Don Reisinger takes a more analytical approach to iPhone X gloom and doom.
Apple’s iPhone X accounted for 20% of all U.S. iPhone sales during the fourth quarter, Consumer Intelligence Research Partners said on Monday. That was enough for the iPhone X to top the iPhone 8 Plus, which accounted for 17% of total iPhone sales during the period, but well behind the iPhone 8, which tallied 20% of sales.
This is just a guesstimate, of course, but remember that Apple’s newest iPhone models always take the top spot in annual sales, but a significant percentage of older models are part of that 200-million or so annual sales number. Plus, iPhone X did not reach significant shipment numbers to satisfy demand until December (as the financial quarter was coming to an end).
Apple does not break out sales for particular models each year and with good reason. Older models– and this year Apple has five older models in the lineup– still sell in substantial numbers while the newer models roll out.
What’s going on?
Business as usual. This kind of so-called criticism and analysis comes every year at this time as Apple slows production because demand has been met for new models, and begins getting ready for the next iPhone models due in late summer.
Move along. Nothing to see here.
Yet, I have a hint of what it to come. Juli Clover explains:
Guidance for the first fiscal quarter of 2018 includes expected revenue of $84 to $87 billion and gross margin between 38 and 38.5 percent. It will be a record setting quarter even at the low end of the guidance range, as Apple saw $78.4 billion in revenue in Q1 2017.
Despite all the gloom and doom over iPhone X, iPhone in general, and how Apple no longer has a presence at CES or commands technology mindshare, the company expects and projected Q1 2018 to be a massive record in revenue and profits. By law Apple is required to notify investors if it expects to miss those projected numbers by any significance. Q1 FY 2018 results are due February 1 and Apple hasn’t responded to the gloom and doom analysis with any official gloom and doom.
The numbers will look good. Again.