Apple reported its December quarter (calendar Q4) numbers for the iPhone. They had a good Christmas in a bad year. Compared to the record-setting year of 2015, iPhone annual sales were now down 7% for 2016, but the last quarter, powered by the latest iPhone models, saw an increase vs the same quarter a year ago, by 5%. Actual units iPhone reported 78.3 million iPhones for Q4 and that means full year 2016 sales of iPhones were 215.4 million. I get preliminary market share estimates out of those numbers for the October-December Q4 calendar quarter for the iPhone at about 18% and for the full year 2016 it means about 15% market share for the iPhone. That is down one point from 2015 when iPhone had 16% market share for the year. Apple is yes, highly profitable in its smartphone business, but make no mistakes, I've told you on this blog forever, that Apple is not in any way threatening to become the world's largest smartphone maker (that is safely Samsung) and there is no immediate rival to snap on its heels at number three (Huawei is there, at about 9% market share but growing).
So we witnessed Peak iPhone haha, it was year 2015 when Apple shipped 231.4 million of its smartphones. Now the iPhone is settling into a steady pattern of around 15% to 16% if you want the rosy view (last 4 year market shares were all either 15% or 16%). Or if you want the alarmist view, then iPhone has fallen a quarter in four years from the peak level it had in 2012 when iPhone had 20% market share (its peak annual share). Even this 'good news' quarter of calendar Quarter 4, October-December 2016, was not 'that good' because in previous Calendar Q4 quarters in good years, the iPhone was easily able to go far above 20% in market share in the big Christmas sales quarters as the new model came out - as high as 23.4% in 2011 - and now the 18% level is really not that 'good news' as far as iHysteria goes, even the market share one year prior, in Q4 of 2015, was 19%.
Now on the iPhone 10 year history? Here is its annual market share development:
2007 . . . 5%
2008 . . . 9%
2009 . . . 14%
2010 . . . 16%
2011 . . . 19%
2012 . . . 20%
2013 . . . 16%
2014 . . . 15%
2015 . . . 16%
2016 . . . 15%
Source: TomiAhonen Phone Book 2016 and Apple official numbers
The above table may be freely shared
There was a clear peak. It has clearly passed. If the anomaly years 2011 and 2012 are removed, the rest of the past 8 years have been incredibly stable sales between lowest point of 14% and highest point of 16%. What that should tell you, is to expect similar performance in coming years as well.
Apple is not in any kind of danger whatsoever, it has highly desirable products and fierce loyalty. It has a huge return customer base. It has a vast array of money-making opportunities out of its iOS ecosystem of other devices that use its OS platform, so the iPhone feed sales of iPads, Macs, iTunes music store, the Apple Watch etc. And obviously Apple makes a nice killing also taxing the app developers on its app platform. Apple is by far the most successful tech company in history and arguably the most successful company in history, out of any industry. But its glory days seem to be over. There is nothing to take over for the immense fortune that was driven by the iPhone for a decade. The iPad was a far smaller opportunity and the Apple Watch is nothing even close. And Apple has no real 'second act' beyond the iPhone now (they may discover one at any moment, I just mean they don't have one now, in the market). There is no magical economy to drive iPhone to world domination. Its a niche product. A large immensely-profitable niche but it is a premium product exactly like how say a BMW is a premium car. It can sell in huge numbers but its not going to be the best selling car in the world, like a Toyota. There is not enough of a premium market for that kind of economic miracle. So reality is catching up to Apple. I have held the view that in the long run Apple will settle into a 10% market share out of all phones sold. This year about 2 Billion mobile phones (smartphones and dumbphones, combined) are sold. Apple is almost exactly at 10% right now (10.8% to be exact if the year ends up at exactly 2.0B new handsets sold). As the smartphone migration continues (in 2016 more than 3 out of every 4 phones sold was a smartphone) that means that today's annual market share for iPhone of about 15% of all smartphones, would settle pretty close to 10% of all phones by around say year 2021-ish. Give or take a percent and give or take a year. So don't expect huge growth for the iPhone in coming years either.
With that, of course if you need ALL the numbers of the smartphone wars, my brand new statistics ebook, TomiAhonen Phone Book 2016 just came out a month ago, it has all numbers current as of December 2016. See more here.