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May 04, 2016



"All the low-cost manufacturers are excluded such as Huawei,"

??? Huawei is a Samsung-like manufacturer, with low-, mid- and high-end lines. The P9 and Mates are legit flagships, with premium features, premium quality, and sold a premium price.



Tomi makes it clear that he looks at the premium brands: "many local brands also sell premium phones but the brand is not premium"


Apple is never going to add MicroSD or FM Radio support. It wastes valuable space. I also don't see them adopting USB-C for their phones, though they may do so indirectly as shown by the 12.9" iPad's USB 3.0-compatible Lightning port (which should gradually make its way to the rest of the iOS line).

Apple will never break it out, but I'd be curious as to where the iPhone SE is selling. Apparently its success caught Apple off guard. Is it selling well in Apple's existing large markets or is it making inroads in emerging markets? It's got high end specs and a mid-range price. In some respects I'm surprised Apple abandoned the small-screen market in the first place, but they had the sense to move back in before anyone else did. In that respect they made the more agile move.


@Catriona: Sony never left the small-phone market. their 4.6-incher is only 10% bigger than Apple's 4-incher, because bezels.


"Sony never left the small-phone market."

Such as Sony, which has been releasing "compact" versions (4.3-4.6") of its flagships for two years already.


But Sony is such a small player. Samsung, Huawei, etc. haven't released full-powered smaller phones.

Tomi T Ahonen

Hi obarthelemy, uniquemonique, E, Catriona and disintegrator

obarthelemy - E.Casais already explained the first point (thanks E).

uniquemonique - lets move the Trump & US election stuff to a blog posting that talks about it, this article is about Apple & smartphones

E - thanks (both)

Catriona - haha you have no idea how much of a deja vu that is now on iPhone topics. Many Apple fans insisted nobody used the puny cameras on phones and the 2mp camera of the original iPhone would never be upgraded. Then that 3mp was enough, then that Apple would never need to go beyond the 5mp etc. Then there were all those singing Apple will never, about the larger than 3.5 inch screen. And again, that Apple won't ever chase Samsung into phablet that 4 inches was somehow a perfect screen size. Its the same song a hundred times. Apple doesn't need microSD or FM radio for the US market. If it intends to do well in the international market, especially Africa, poorer parts of Asia and Latin America - it HAS to give what consumers expect... but yeah, feel free to think that haha.

On 5 SE markets, me too. We'll start to find out as we get Kantar numbers so we can see where iPhone may be seeing upticks now in Q2. And when we know actual iPhone Q2 totals, we can also calculate out the rest of the world so we'll get a pretty good idea. Thats around .. end-of-July-ish.

Then smaller-screen premium phones by Samsung and Huawei. Sorry, Catriona you are totally wrong on that, but its because they don't bring those to the USA. Here in Asia go to any handset store and its form factors galore. Galaxies in every shape and size and price. Yes, totally an Xperia Mini clone from Galaxy (and from Huwaei) of course. They are not dumb and they play for the mass market - of COURSE there is variety in their product line.

disintegrator - lets bring the political discussion to the blog article where I talked about it, not here in an Apple and smartphones related blog.

Thanks for the comments, keep the discussion going

Tomi Ahonen :-)


Catriona: I disagree about USB-C. I predict the next iPhone will have a single USB-C port and not even an audio jack.


Tomi Ahonen, hardest working analyst on the web. Glad to see you back now that USA primaries election is pretty much completed.

Per "wertigon" Ekström

Tomi, what are your thoughts on the recent setbacks in China and India?

For those wondering, China recently banned iTunes Movies and iBooks, and India does not allow Apple to sell iPhone refurbished phones.

I do not see this affecting Apple China that much but it will make the iPhone a tougher sell in India.


"Apple will never break it out, but I'd be curious as to where the iPhone SE is selling. Apparently its success caught Apple off guard. Is it selling well in Apple's existing large markets or is it making inroads in emerging markets? It's got high end specs and a mid-range price. In some respects I'm surprised Apple abandoned the small-screen market in the first place, but they had the sense to move back in before anyone else did. In that respect they made the more agile move."

Suspect it is cutting swathes through the second hand Apple market. Really want to see how well other models have retained their value now that they have a similarly priced new model option with warranty included to compete against

Previously Apple had some of the highest retained values have seen in consumer products relative to their competitors. Have pet theory this was because they offered no mass market model, it created an upwards pressure on used models. Should be able to see this once can find some second hand sales data perhaps in a quarter or two when people trade in their older iPhones for the new 7 models

Tomi T Ahonen

Hi Lullz

No, look at the graph again. Its deceiving when the BOTTOM item is growing (Android). The number is the year (end) so to see Nokia how it did in 2010, you need to see 2010 vs 2009. And then when you look at the middle of the graph (vs purple of Blackberry), you see that that blue line also goes up but not as fast as the red (Android) line on the bottom. As we know happened, Nokia lost some market share from 2009 to 2010 overall in the industry, of course also here. The COLLAPSE started AFTER 2010, from 2010 to 2011 (and 2012, 2013)

Actual numbers total market: Nokia 2009 67.8M smartphones sold, 39% market share. Year 2010 103.6M (the final revised number) is 35% market share. Year 2011 77.3M 16% and year 2012 35M and 5%...

There was a significant decline in market share while Nokia set the world record for largest growth of smartphone sales in any single year up to that point, from 2009 to 2010. The share in all phones dropped from 39% to 35% due mostly because of rapid expansion of the field of competitors rushing into smartphones at the time.

(I think you made the mistake of timing in the graph - looking from 2010 to 2011, thinking that part of the graph was year 2010 sales, no the point in the graph is the END of the year, not the start of the year, so all the space from 2010 to 2011 is January-December of 2011, not 2010 haha. Don't worry, a common mistake haha)

Tomi Ahonen :-)

Wayne Borean


Fascinating article, but you've got a couple of points wrong. I've just woken up, and am still in bed. For thus I need to haul my carcass out to the living room and use my laptop.

Tomi T Ahonen

To all my fans who crave all the numbers..

Its out! TomiAhonen Almanac 2016 ed just fresh out of the pdf-file-converter... shipping the first pre-order Almanacs out now. Its again bigger than last year, now 213 pages, it has even more charts (again) now 109. And for you fans of phones, the handset chapter grew the most, now includes GPS installed base, dual SIM installed base, phablet screen annual sales... tons and tons of again new info plus all the goodies you've loved in past Almanacs. Its formatted to fit your smartphone so you can carry all the mobile stats in your pocket every day. And best of all - the price has not changed in 8 years.. still 10 Euros. Here is the direct link to the ordering page. Get yours today...

PS also all of you know someone who 'should have this data' haha, tell them about the Almanac - the BEST data package of mobile anywhere at a ridiculously low price at that, by the stats guy of this incredibly complex and volatile industry.

Tomi Ahonen :-)

Wayne Borean

- I am not an Apple analyst.

Well I am. Microsoft too.

- EVERYTHING you see on an iPhone has been a SUCCESS for YEARS in the leading countries of mobile, especially Japan.

Agreed. Apple has always been a follower. But...

Apple hasn't developed and sold phones with the features you mention (microSD card slot, removal battery, dual sim slot, FM radio, etc.) for the simple reason that those features have no importance in the Industrialized world. Certain individual users will find them necessary, 95% of Apple's target market will have no use for them.

As Apple moves outside of the Industrialized world, Apple may add those features. It is going to depend on a lot of factors which we don't know, such as whether or not Apple wants to compete in the $100 mobile price range. A lot of folks are going to laugh at this, but I could see Apple doing that in the long term (five to ten years). But first they'd introduce a mid-range price mobile. Oh wait, they've already done that. Well, upper mid-range price, but far less expensive than any other new phone they've released. This should actually reduce costs for Apple, because while the components are more powerful, they are also more common, a lot of them being shared with the top line phone, unlike Apple's earlier reduced price phones which were the previous model which used different components and probably cost marginally more to produce because of the reduced volumes.

- They climbed so far because two of their rivals decided to implode due to morons in management.

What some people are going to miss from that is even if the rivals hadn't been run incompetently and had maintained their general market share, Apple and Samsung would still have seen healthy sales growth as the market expanded. From a consumer viewpoint this would have been a better solution, as Apple and Samsung would have had stronger competition.

Currently neither has strong competition. The smaller companies fight for the scraps, while Apple and Samsung hog the best sales.

- If the industry sees this picture, then the illusion of the App Store is shattered.

It wouldn't scare anyone who does corporate planning. I was asked why I went for one specific customer instead of another. The one I went for looked like Apple, premium product, lower sales. I went after that one because I could charge $50.00 more per unit, and the extra units sold with the other customer would have actually meant lower gross sales (and we made better margins on the higher priced units).

The Apple App Store doesn't reach as many people. But there's an amazing amount available there, and the sales possibilities appear higher (I was unable to find numbers for OSX and Windows desktop app sales that I trusted - if anyone does have a good source please tell me).

So I disagree with this argument. Sure, it might upset untrained pundits, but it won't upset anyone who knows that the best bet is to follow the money.

- So Apple was UNDERPERFORMING the market !!!

This is incorrect. If your chart only included Premium mobile sales, it would show Apple market share climbing. In other words Apple was outperforming the market, in the segment that they wanted to compete in.

If we were to make a similar comparison with Tesla, including numbers for the Tata Nano and the Honda Jazz would be ridiculous.

- Mass Market is not in the Apple DNA.

Tell that to Microsoft, who Apple trounced (along with everyone else) in the MP3 player market, where Apple held 74% of the market, Sandisk 7%, Microsoft 1%, and 'Others' 18%.

Apple is quite capable of competing in the mass market. For that matter the Apple ][ was a mass market product, and was at one point the most popular personal computer.


Note for those who don't get where I'm coming from - I am not arguing with Tomi's numbers. Hell, I just bought the Almanac. Ask him.

I am arguing with his interpretation of those numbers. We had similar discussions in politics where Tomi and I had different interpretations of events. I was right about Trump being serious, and I was right about Trump having a decent chance of becoming the Republican nominee.

In the case of mobile I think that Tomi is reading the numbers wrong. The numbers are right, the issue is the meaning, and how certain players will act.

Let's take Nokia. Who would have thought that they'd go from a solid contender to an also ran in a two year period? Tomi did because he knew the players and the market.

In this case I think I know Apple better than Tomi. I also know a fair bit about product design and sales, possibly a bit more than Tomi, since I was the chap on the leading edge of the spear in knocking on the doors of Fortune 500 companies. I was pretty good at it.

It all comes down to money. When you hear people yelling that Apple IOS is dead because Android is soooo much bigger, they are wrong. Apple had a viable app ecosystem three years ago. The number of potential customers for Apple app developers has risen since then, and Apple users do tend to spend money.

Android users don't spend as much money per device. The numbers I've seen (which may not be accurate) seem to show that with 1/5 of the active devices Apple app sales (including in app purchases) are marginally higher than Android sales. Even if Apple was to drop below 10% market share, as long as the total number of devices stays static, the Apple ecosystem would still be a viable route for developers.

But Apple has moved down market with the iPhone SE.

Let's look at a scenario!

Apple sells the iPhone SE (and its replacement) at $399.00 for the next two years. It gains Apple increased sales, and possibly some market share. Then Apple introduces the iPhone XE for $299.00. The XE might possibly be the older SE. Apple might also add an iPhone SE+ in a phablet form factor priced at $450.00 to $475.00.

After two years of selling the iPhone XE (we are talking 2020 now) Apple introduces the iPhone YE for a price of $199.00.

All iPhones run the exact same OS, can run the exact same apps, and Apple now has mobiles which can compete against a large percentage of the smartphones on the market in the Industrialized world, and in places like the BRICS nations, where the population might not be as affluent as the Industrialized nations, but are close, and want the same things that their richer neighbours have.

In other words it would be a granulized move into the mass market, which is how Apple handled the MP3 Player market.

I have no idea if this is Apple's plan. This is just a logical extension of moves I've seen Apple make in the past. Apple has the money to do this. According to the company's most recent 10Q, they have $200 Billion in the kitty. You can do a lot of R&D and design engineering with that sort of money.

Compare that to Microsoft, who has $112 Billion.

Or Google who has $64 Billion.

Note that I didn't go after Samsung as it isn't an American company, and I'm working on three hours sleep. That would require thought, and I'm not sure I've got any left!

So the charts which show Apple in a slightly less than stellar manner are correct, but misleading. What is more important is this:

Net Sales by Product, quarter ending March 26, 2016

iPhone $ 32,857
iPad $ 4,413
Mac $ 5,107
Services $ 5,991
Other Products $ 2,189
Total net sales $ 50,557

That clearly shows that the iPhone is Apple's main source of revenue. Apple will fight to keep that source of revenue growing. The good news is that there is a lot of room for growth, if Apple can convince Android customers that IOS and the iPhone are a better choice. The iPhone SE is Apple's first move in that direction, and if the rumours we've heard are correct, it is a good one. I'm looking forward to seeing real numbers rather than rumours, so I'll be here every day checking to see if Tomi has put them up yet!

Hopefully this makes sense. I'm taking the dogs outside, then going back to bed. The reason I only got three hours sleep is Rosie, our seven year old Beagle cross is suffering from age related bladder issues, and the beautiful mutt wakes me up so I can take her outside, and then I can't get back to sleep. I love you Rose, but some days...


@Wayne Borean:

"as long as the total number of devices stays static, the Apple ecosystem would still be a viable route for developers."

Yadda, yadda, yadda. I think it has been proven that the only way to make money with apps is to develop them on contract for someone else - and in that market platform isn't chosen by who spends more but who reaches more of the intended target audience. Even though you CAN make more money on Apple's app store, that's still measly peanuts in relation to the development costs. The entire 'app economy is a joke - everybody ogling at the revenue but nobody ever asking what the COSTS are! Note: Developing apps is not cheap! Developing apps for Apple costs a lot more than developing apps for Android, because Apple constantly changes the rules which results in a lot of wasted work.

"The good news is that there is a lot of room for growth, if Apple can convince Android customers that IOS and the iPhone are a better choice. "

That's going to be hard. Because Apple is not the better choice for anyone who values flexibility or freedom of choice.
If Apple wants to convince these customers they have to drop their high-handed 'we know perfectly what the customer wants, and those who don't agree just do not know better' attitude.

Sorry, but I only see yet another person who drunk too much iKoolAid.

Wayne Borean


So from your viewpoint Apple should not be able to pickup many new customers or much market share with the iPhone SE. We'll see when the numbers come in.

@Wayne Brady,

You are incorrect. Apple has a lot to gain from going 'down market' in a controlled fashion. Let me toss some numbers out.

Assume that Apple manages to increase the number of IOS devices by 5%. The addressable market for apps rises by 5%, which makes app programming more lucrative (yes, I know, the app market is not a gold mine, or even a copper mine, but follow me through this). This also puts limits on the addressable app market for Android, which means fewer Android exclusive apps, which means that Apple won't get damaged the way they did when Windows killed Mac volume.

So then comes the iPhone XE, which again increases the addressable market for apps by 5%, with the same impact. Note that during this time total smartphone market is still growing, high means that Android is increasing the total number of in use units, and so is not feeling any pinch.

Then we hit 2020 when the smartphone market can no longer grow from cannibalization of the dumbphone market.

Now we get into weirdness. The World population is close to stabilization point anyway. Add in the increasing effects of Climate Change/Global Warming (heat waves in Thailand and India, droughts, extreme weather events driven by extra energy in the weather systems). At this point we should see several things happen:

1) Increased population die offs due to heat
2) Migration from areas where heat is becoming unliveable
3) Migration will often be to places like Canada or Finland where contraception will be readily available and inexpensive

So population may start to decline, reducing total world market for smartphones, at the same time that the population that can move is moving to places where they will be more economically advantaged (able to afford Apple products).

So the market which buys Android because it is the only choice will drop in total population. The drop will be minimal, but at the same time the population that can afford will Apple will grow minimally. However the small growth of the population that can afford Apple will have a greater impact on Apple than it will on Android. We are already starting to see this.

Apple 15% Market Share
Android 84% Market Share
Other 1% Market Share

The above is from memory of 2016 numbers and is not accurate, but horseshoes and hand grenades...

In 2020 this changes to

Apple 20% Market Share
Android 79% Market Share
Other 1% Market Share

Impact on Android? Minimal. Maybe as Apple eats part of the lower upper end of the market Sony might drop out. Maybe not.

Impact on Apple? Huge. Apple has just increased iPhone sales by 25% over a four year period, which is an excellent sales trajectory in anyone's books.

The iPhone SE has to be taken in context with Global population shifts. As does Android, Windows, and everything else. Analysts worldwide are ignoring these problems, though if you look at the planning the United States military has been doing, you'll see they are well aware of the possible problems (like a case where Mexico is inundated with refugees from further south, and being unable to handle them gives them guns and points them at the Rio Grande...)

FYI, I live 300 metres above sea level in an area where there was still ice on the lakes Monday. I'm fine when the oceans rise, and the temperatures go nuts.

At this point I'm going to strongly suggest reading this 1993 memo written by a Microsoft Executive titled Road Kill on the Information Highway, and meditate on both its accuracy, and what this means for Google, Microsoft, Samsung, and Apple. And then think about what it says, along with all of the other issues which are hitting the planet (ozone hole for example) and think about where things could go.


@Wayne Borean:

"So from your viewpoint Apple should not be able to pickup many new customers or much market share with the iPhone SE. We'll see when the numbers come in."

The iPhone 5SE will certainly produce an upgrade spike from all those who are still using an old 4'' iPhone and need to replace it. Aside from that, what kind of people would trade a large screen Android for a small screen Apple? Sorry, but no, I do not see much potential to increase customer base here, for the simple reason that screen size is the most important feature of all.

I'd say these days the lines have already been drawn. Those with enough money and an Android phone normally use that because they do not like Apple for how they operate their business. After all that was the main reason why I ditched their products 2 years ago.

Wayne Borean

Besides, Barney is assuming that the iPhone SE will only be sold in the 4" size.

Take a long had look at how Apple's laptops have 'evolved' starting with the first of the new series introduced after Jobs came back to the company. Apple has consistently introduced High-End systems, and then lowered the prices over a period of time while upgrading the specs.

The MacBook Air (13") was $1799.00 when introduced.

The MacBook Air (13") now sells for $999.00.

So why wouldn't Apple take the wide screen, move it to the SE for $499.00? Dump the iPhone 6, or maybe make it a top end phone like the Vertu Ti, or make it modifiable like the Apple Watch, with the addons (gold case, etc.) being extra cost, with the aluminium case remaining standard.

This handles two things - the market for 'Premium' phones (and blows Samsung out of the water) and the market for midrange phones using the same basic hardware.

The Apple Watch could have been a test, to see if people would pay extra for gold bands (cases) and other toys, on top of the functional base unit.

This is just blue sky thinking, but it is based on Apple's historical actions.

Per "wertigon" Ekström


I do not think that Apple wish to up the screen size of the SE, for one simple reason; that would cannibalize their sales of the high-end too much, leading to a massive loss of their beloved profits.

If Apple keeps on moving downstream they will find increasing resistance, and their "Premium" brand will start to erode. And the only thing keeping Apple afloat at the moment is that premium brand.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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