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April 26, 2016


Per "wertigon" Ekström

I have a hunch this coming quarter can be as low as 40M-45M units sold for Apple. It all depends on how well the SE sells during this quarter.

My current thinking is that the the SE will add 10M-15M boost (e.g. sell around 40M-45M) for the year.

Also, since we know SE preorders were 3.5M in China alone, let's double that for world so say 7M for the SE. That means, without the SE, iPhone 6/6S sold about 44-45M units this quarter. If SE sold even better that means even worse numbers for the 6/6S.

I'm also not convinced Apple is abandoning their tick-tock strategy with one phone a year release. That's the move that makes most sense, definitely - but Apple is Apple, and the tick-tock strategy has served them very well...

This will be an interesting year to watch for sure. :)

Earendil Star

I am not sure the current results are just "ordinary" for Apple.

Decrease in sales YoY was significant, and the drop in China particularly sharp.

Plus, they are forecasting a soft Q2 (solar) as well, regardless of the SE. And most other segments (iPads, Macs, etc.), with the exception of services, are plummeting as well (sometimes, e.g. the Mac, faster than the rest of the market).

I am not saying Apple is doomed at all. Just that it's not immune to similar market dynamics as other smartphone producers are facing, namely that the smartphone market is becoming saturated.

However, this year, Apple did not have a separate release for China, which probably exacerbated Q4 (solar) results, and is now unfolding by hurting Q1 (solar) 2016.

And let's not forget momentum: a company that some were predicting to be immune from downside, is coming back to reality.

Interesting times ahead... Not terribly exciting, but I would expect a little less boring compared to what Tomi is expecting (although this will not alter the wider picture significantly, I agree...).


Apple is saying SE demand surprised them. It used to be relatively easy to estimate iPhone unit sales based on their revenue projections, but now with a $400 iPhone in the mix it has become much more difficult.

@Earendil, the Mac isn't falling as fast as the market. Tim Cook also basically said he thinks that the iPad has troughed and expects to see growth again. As for China, most of the drop was in Hong Kong (weak economy because of the strong dollar).

Services is interesting. Until the next "big thing" comes along (and I don't think it is VR) wervices and wearables may get some attention. Since many of these services are tied to or consumed on mobile devices, it may be interesting to get Tomi's take on that over time.

Wayne Borean


Agreed. VR is like 3D was in the movies. Some people get excited about it, most are fine with watching flat screen.

The next Big Thing is fun to pontificate about. Take VR - if could be damned profitable to some of the companies involved, even if it is a failure in the market. To any company which used VR profits to leap frog the competition, VR was a big thing.

To the general public? Not so much.

Personally I'm leaning towards the next Big Thing to be in the medical sector.

John Phamlore

The iPhone SE is a monster hit exactly where I predicted it would be, in the First World, particularly the United States. Apple can't even keep it in easy supply.

Or just like I predicted, just like the better Google Nexus phones, they don't want to keep it in easy supply its first year of production.

@Wayne Borean: The next big thing is what Google CEO Sundar Pichai said it would be recently: "And overall, I do think in the long run, I think we will evolve in computing from a mobile first to an AI first world. And I do think we are at the forefront of development."

Big data plus artificial intelligence, particularly using deep learning neural nets, is the next big thing.

And just like I have noted for years about Intel and its troubles with mobile, Intel is similarly completely ill-equipped to supply the computing hardware for these deep learning neural nets. Just like LTE where Intel has barely crawled up to being adequate this year, YEARS after former allies like Nokia really could have used the help, Intel is so far behind Nvidia in GPU technology applied to neural nets that at best even if they devoted massive resources they would need more than a decade to even become adequate.

Really what Apple needed to do what buy Nuance years ago, which they could not do despite their unbelievable cash hoard.

Abdul Muis


"As for China, most of the drop was in Hong Kong (weak economy because of the strong dollar)."

HongKong only have 7 million people, compared to 1.35 billion in China. A 1% drop of sales in China would be more dangerous for any company compared to 100% drop of sales in Hong Kong.

Abdul Muis


"I had to buy a new MacBook Pro now only because I managed to spill pint of beer on it."

Perhaps you should try samsung product, I heard that Lil Wayne having fun with samsung and champagne.


From now on the iPhone market share will be much more difficult to predict on short-term.

Regarding that Huawei can't catch Apple for a long while to come, I would not be that sure. Chinese smartphone market is very fragmented and most likely in the near future will go thru some consolidation. Therefore it might be that Huawei will merge with (or buy?) Xiaomi/Lenovo/Oppo/etc.

Abdul Muis


"From now on the iPhone market share will be much more difficult to predict on short-term."

If Apple manage to beat some, lose some, it would lost it's GOD status. If its 1 year streak of loosing YOY, it would got the BB diseases status.

Abdul Muis


"Apple has a problem. How to keep their "competitors" alive?
Apple wants their partners to be healthy and alive. Apple doesn't need to own everything and they are PRO OpenSource. "

You drunk.
Go home.


These figures speak to one truth at least. Apple's products and business model are not and never will be immune to competition. This sort of myth making nonsense can only be maintained by people who ignore the obvious - Apple like everyone else must win sales on a daily basis and if their products fail to meet expectations, people will go elsewhere. But, those companies that win some sales from Apple today, in order to keep their new found customers, will need to continue to meet their expectations into the future, as well. Otherwise, the 'churn' will just continue.

Apple play this game very well, and it would not surprise me, if Apple takes a few sales from its competitors too, as Tomi says, in the coming months.

Per "wertigon" Ekström

@Lullz - as I explained in the other thread.

iPhone 6S sales were somewhere between 43-48 million depending on how much the SE sold during it's initial launch.

That's almost on par with Q1 _2014_. That means the iPhone 6 was a spike for sure.

Per "wertigon" Ekström


So, wait, let me get this straight. Define what a spike is then. Because in my book, a spike is when you outperform from what you should have performed.

The 6 did outperform from what it should have in both growth and units, if we look at the average growth curve for Apple. However, it did so partly at the cost of the 6S, as we see now. The 6S only sold at best 48M units , the rest was carried by SE. We also do not know how much of this was channel stuffing, so it could've in reality performed even less.

With no SE the numbers would've been in the mid 40s. And I said a year ago this exact thing would happen, though I expected the "crash" to happen in Q2, not Q1. Then the Chinese crash happened, and rest is history. :)

Anyhow Apple moving average market share looks to be around 15.4% (waiting for Tomi to post the final quarter numbers) so moving average marketshare is down.

Per "wertigon" Ekström

@Wayne: Spike is also dependent on the time you look.

Seen over a yoy comparison, yes it is a spike, a huge spike. See the following data trend:

Q1 2011: 18.65M
Q1 2012: 35.06M
Q1 2013: 37.43M
Q1 2014: 43.72M
Q1 2015: 61.17M
Q1 2016: 51.19M

Q1 2015 is clearly a spike if you plot this in a graph. :)

Per "wertigon" Ekström

It's a borderline spike, barely made it as one.

But fine, I can settle for it being a (whatever you call it when the popularity of a product soars above it's average for a time and then goes back to the average). It behaved exactly like a spike that's why I'm calling it a spike. Only difference is it lasted longer than a spike usually does.

Per "wertigon" Ekström


Yes, indeed many of us did underestimate the demand for a big-screen iphone, but it was the competitions marketing and technological stumbles that made iPhone 6 become not only a homerun but a once-in-a-lifetime ball outside stadium hit.

It's like a batter hitting the ball that on itself will travel just beyond the edge of the playing field - but at the precise moment the ball reached it's peak, a strong wind came and carried that ball twice the distance it should have.

It's the combined effort of luck, skill and opportunity that made the ball travel that far. It helped Apple when it needed it the most, prolonging their downward spiral a bit more and pushing their ceiling that much higher. But now the ceiling is reached, the question is what happens next.

Let's see what 2016 has to offer yes?

Earendil Star

@Catriona... easy to counter facts without providing... counter facts. Bad habit... and sorry if I am talking computers on a smartphone blog but... let's see the facts.

So, on the Mac (source CNN Money - quote):

First quarter of 2015: 4.6 million
First quarter of 2016: 4 million, down 12%

PC sales fell by 10% worldwide last quarter, according to Gartner. Apple had been outpacing the overall industry, but this is the second straight quarter in which Mac sales performed worse than the overall PC market.

Mac sales were relatively abysmal, badly missing Wall Street analysts' expectations. They expected 600,000 more Macs to be sold during the quarter.


Good night and good luck!

Paul jardine

The big question here is whether people have stopped seeing Apple as a premium brand. Apple products are more expensive and in the past that hasn't been a problem for them. If people are looking for a new phone and can afford an SE or, say, an Oppo F1, but Don't perceive any extra value in the Apple ecosystem then there is trouble ahead.
The China figures suggest that this might be the case, at least in China!
The move to services is essential but I'm not sure it will ever fill the gap in the hardware profitability.

Wayne Borean

@John Phamlore

Sorry, but AI is like Big Data. It will start off expensive, then drop in price over a five year period to some pimple faced geek living in a mother's basement will be able to do stuff that would take millions of dollars of equipment five years before.

Big AI will be important, and useful, worth billions in the world economy. That will be a drop in the bucket compared to whatever comes along as the next Big Thing, just like mobile is worth more than the entire computing industry.

Tomi T Ahonen

Hi everybody

IDC numbers out for Q1. Top-3 is totally predictable and solidifies what we on this blog all knew quite well, Samsung 25%, iPhone 15% and Huawei 8%. There is no race, each has settled into their own sphere and isn't bothering each other. Whats happening just below Top 3 is interesting. IDC gave a Top 5 which has.. no Xiaomi haha. What did I tell you.. But yeah, at number 4 Oppo and number 5 Vivo - both brands that most of you heard first via this blog, when I said, watch out for THIS brand to hit the Top 10 next haha.. not bad.

But there is a very VERY dark cloud in IDC's numbers. They report only a 0.2% rise - not 2%, 0.2% rise year-on-year for Q1 now vs Q1 of 2015. That alone is alarming, it should be something around 8% if the industry was still growing at high single digits, while of course Q1 comes down from the Christmas-sales quarter immediately before, ie Q4. The year-on-year has always grown. Even through the Great Recession of 2009, the smartphone year-on-year quarters always grew. So now.. lets look back. IDC reports that Q1 of last year was 334.4 million units. BUT LAST YEAR they said it was 336.5 million. This almost never happens in our industry that an industry analyst dials DOWN its number a year later. We've almost only seen it the other way, occasionally, an analyst house revises its number up a bit, in a later report. So if we go by the reported number from last year vs the new reported number now - then YES the industry has SHRUNK about 1% vs last year.

This is BIG, people. It means we start the year in a hole and to get any growth, we need to get out of that hole first. But two silver linings on the dark ominous thunder cloud. Galaxy S7 and iPhone 5SE. Both models will have their first full quarter of sales now, in Q2 which should see a healthy jump in sales for the two largest smartphone manufacturers of the world who control 40% of the market. I trust we'll return to grwoth in Q2 but I wanted to highlight this surprising number from IDC. We are seeing a SERIOUS contracting of the smartphone market which I didn't see coming, I hope its was just for one quarter but we may see a very anemic year if this continues. And if smartphone sales growth has slowed to a crawl of 2% to 4% per year when I expected something like 8% then we may have to push back the 100% migration target from 2019 to 2020 (new sales, not installed base obviously). Just so you know.

Tomi Ahonen :-)

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