And we start on the final end-of-year results. Apple Q4 results (Calendar quarter, not Fiscal quarter) ie October-to-December sales (Christmas Quarter) were 74.5 million iPhone units. My preliminary quarterly market share for iPhone is 19.2% (up from 12.3% in Q3). Because of the peculiar launch pattern by Apple that produces that huge sales spike for one quarter going from Q3 to Q4, and then essentially flat sales for the next 9 months of diminishing Quarterly market share, the relevant measure with Apple is always the annual comparison. So compared to Q4 of 2013, the unit sales of iPhones are up 46% (better than the industry overall) and the market share is also up from Q4 of 2013 which was 17.8%.
ADDITION Jan 30: I have added the part to the bottom about iPhone 6 models selling to existing vs new customers based on analysis of info released in the the Apple conference call transcript
And we have cause to congratulate Apple. It climbs yet another rung on the ladder of biggest handset manufacturers when all phones are included (smart and dumbphones) as the largest pure smartphone maker. Apple held 3rd largest handset manufacturer title still in Q3. Now as Microsoft reported again declining total (Nokia) handset sales down to 50.2 million units, Apple has jumped Microsoft-Nokia taking the 2nd largest handset maker title with its 74.5 million iPhone units for the Christmas Quarter. Its a pretty safe bet, the lead is so strong for Apple, with Microsoft winding down the dumbphone side of its business (still 80% of its Nokia phones shipped in Q4 were dumbphones not Lumia smartphones) that this 2nd largest ranking is safely in Apple's hands now. Congratulations Apple, really a massive achievement for a pure smarphone maker selling the most expensive line of phones, to become the world's second largest handset maker. The moment they took that ranking was just now, for Christmas 2014. Next up? Samsung haha... (stranger things have happened.. but I'm not yet forecasting Apple could do that feat haha)
So we now also have the annual numbers. Apple final 2014 unit sales were 192.7 million iPhones, up 26% from 2013 just about the same rate as the industry grew. So I get a preliminary annual market share for the iPhone at 15.2% which is just marginally down from the 15.5% it was in 2013. Apple is safely the world's second largest smartphone maker, far above the 'next tier' where the next biggest is about half Apple's size (Lenovo). But even as the Wall Street iHysteria push silly iPhone world domination stories, no, Apple is not the biggest smartphone maker now. Its not even close. Samsung is the biggest. They sold well over 300 million smartphones in 2014. Yes, they are more than 50% bigger than Apple just on their smartphone business alone (even more of a lead if we count all phones).
The iPhone annual market share for the Bloodbath years has looked like this:
2010 . . . 13.4%
2011 . . . 19.1%
2012 . . . 19.5%
2013 . . . 15.5%
2014 . . . 15.2% (preliminary)
As to all phones, when we include the now rapidly shrinking dumbphone sector, Apple has now hit 10% of all phones sold. Now THAT is a truly staggering stat where the bottom end is selling ultra-basic non-cameraphones at 20 dollars without countract.
I want to mention the humongous profits Apple is making. Good for them. We will NOT discuss the profit angle to Apple's excellence here. I have acknowledged it, but I will not welcome the financial performance discussions to this blog. Don't post such comments, I will delete them. We know its the most profitable public corporation in the history of Wall Street. Good for Apple investors. We won't talk share prices and stock evaluations on this blog. You can talk about other issues about iPhones, Macs, iPads, Apple Watches, iTunes, the App Store ecosystem etc if you want. Don't mention the word 'profit' or any synonyms or share prices or financials, else your comment is mercilessly deleted. Go talk to a Wall Street blog about share prices.
But iPhone pricing is a valid issue to discuss and I take some pride in that I was pushing not just Apple to split its annual product launches from 1 to 2 models per year, and to offer larger screens like Samsung, and pushing for Apple to introduce NFC, and to introduce mobile money (all that BTW for example Nokia had already in 2010 haha so still now it holds true, to see what comes next in an iPhone, look at an old Nokia) but yes, I was urging Apple to pursue higher price iPhones beyond the weird 600 dollar artificial price ceiling they set for themselves for many years. Now luckily finally, last autumn Apple went above those traditional prices to 750 dollars (unsubsidised price) for the iPhone 6 Plus. As I've argued on this blog for many years - including showing the price pyramid - there IS room for more expensive flagship smartphones. And now Apple is reaping the benefits also of that free advice that your trusty iPhone analyst of the CDB blog has offered here for years haha.. Also on the silly stuff. Yeah some analysts went overboard with their iHysteria claiming Apple sells more in China than in the USA. I told my followers on Twitter that the math doesn't work and called them out as the nonsense was being published. Now, what will soon happen (likely now 2015 or latest 2016) is that the Chinese New Year gift-giving season prolongs Apple's sales pattern and expressly helps boost China sales to a China peak. Simultaneously in the USA, the post-Christmas doldrums mean a decline in sales. It IS possible we'll see one quarter where Apple iPhone sales in China pass the USA sales, and the year that happens, it will be in the January-March quarter, not the October-December quarter. And yes, that could happen now in 2015. If not now, very likely next year, as China already sells about twice as many total smartphones as the USA and soon will sell 3 times as many.
A side note. iPod sales are down about 5 million units from the Christmas Quarter of 2013 to now. As we see in the overall smartphone vs tablet market, tablet sales have stalled and phablet-screen size smarthones now outsell tablets. So Apple 'caught the wave' just in time (or arguably just slightly behind the optimal moment) but yes, part of the iPhone 6 spectacular jump in sales was now taken by cannibalizing Apple iPad sales. I am sure Apple knew this was going to happen but still, its an interesting observation. iPad sales grew YoY up to Q4 of 2013 when they hit 26.0 million. Now YoY iPads are down for first Christmas, to 21.4M. Its yet more proof that the future is centered on mobile and a tablet is only an ultra-portable PC and a different animal from a similar large-screen device, the phablet/smartphone.
ADDITION Jan 30 - There was heated debate in the comments about were the iPhone 6 sales going to steal new customers (ie from Samsung) or going to existing iPhone customers (as I had predicted). We have a clear statement in the Apple conference call about that specific fact. Tim Cook said that a 'low teens' level percentage (thats American speak for 12% - 13% type of numbers when you want to be vague) of iPhone installed base has upgraded to the new 6 models. They also said in the conference call transcript that all 4 models are selling very well and the bestselling model is iPhone 6. But in addition to 6 Plus also they specified 5C and 5S are also selling well. So somewhat even type selling not one phone selling half for example. Lets make a quick analysis on 'very favorable terms' to iPhone 6 models. Lets assume the split was 1-2-3-4 so 40% were bestselling model (iPhone 6). Second bestselling model was iPhone 6 Plus at 30% (not necessarily so as its the most expensive model). Then 5C and 5S will have 20% and 10% whichever way you want to divide those. That means 70% of total iPhone sales are 6 models, and 30% are older and cheaper 5 models. 70% of 74.5 million total iPhones sold in Q4 means 52 million.
Now 'low teens' were upgrades to installed base. The installed base was 373 million at the end of Q3. If we take low end of that number, 12% thats 45 million iPhone owners had upgraded to new larger-screen 6 models. Nice. But that mean only 7 million iPhone sales of the new 6 models went to new Apple buyers. Most went to upgrade sales to returning loyal iPhone users. Of that 7 million part was first-time smartphone owners. Only a part of 7 million were 'steals' from rival OS platforms such as Samsung users on Android. As Samsung itself later reported its Q4 numbers and said that while unit sales were down, their Galaxy Note 4 sales were strong, the steals weren't from Samsung's phablet sized Galaxies, probably more were older Galaxy S5 models instead which are now soon a year old models. Probably a part of those steals were from first Lumia large-screen buyers who obviously don't want more dead Windows Phone OS smartphones especially as the Nokia name is disappearing and Microsoft reports their growth is in the bottom end of Lumia line. But yes, the iPhone 6 models have stolen some customers for Apple, but not much from Android and very few if any Android phablet-screen sized rivals. Apple own reporting tells us most iPhone 6 models were sold to their existing base, which makes perfect sense. Its not first-time Apple users who stand in line overnight to get their iToys. The big spike sales is OF COURSE driven by the loyalists who have to attend iChurch every year. Next scheduled iChurch gathering is April for the Midnight Mass of the hailing of the Apple Watch.
PS if you are a fan of all iThings, you will probably enjoy my iDream what I think should be the next industry Apple should go and iRevolutionize.
But yeah. The quarterly results are now coming in. I'll post more as we hear from other Top 10 brands (Microsoft-Nokia is such an irrelevant spec in the market now as they've fallen out of the Top 10 smartphone manufacturers, its not worth its own entry. I'll cover Lumia soon in some blog that includes several smaller news items)