iPhone Q4 Numbers? A good quarter in a bad year. Q4 unit sales up 5% but full year 2016 sales down 7% vs 2015

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.

Comments

[Obarthelemy]

Isn't more than 100% of this quarter's progress explained by the fact that this year's quarter has an extra week compared to last year's ?

[JohnC]

"If the anomaly years 2011 and 2012 are removed, the rest of the past 8 years have been incredibly stable"

"But its glory days seem to be over."

May be two different authors wrote this...

[RickO]

2017 will be an interesting year in smartphones.
Will Huawei,Oppo and Vivo sustain market growth or end up just float around in the middle of the pack. Will Iphones hit the wall briefly this year and then scream ahead with the iPhone 8. Think back 5 years and compare the rapid advance in technology / design improvements in smartphones since then - the range of models available today in nearly all price points is amazing. Will there be any threats from up and coming brands in the bottom 5 to shake up the top 5 or are Samsung / iPhone really safe in the top 2 positions - probably need to wait for 2018/2020 to see a trend. In the rush for market share, will there be more manufacturers that will collapse and disappear as happened in 2016 or will any new players emerge, or any consolidations happen. 2017 will, if nothing else, be an eventful year.

[Tomi T Ahonen]

Hi everybody

Strategy Analytics and IDC have both given their last Q4 reports for the total market sizes, so we have our final numbers. Averaging the two give us 432.3 M for the Q4 sales number and for full year 2016 the total comes out at 1,479 M (1.48B) which is 3% growth over year 2015. I'll be doing my Top 10 analysis based on those numbers and make it thus official for us.

The last 2 quarters (Q3 & Q4) showed an average 12 month moving average growth rate of 6.5% (after the first 2 quarters of the year saw our first industry-wide recession). If year 2017 grows at this recent history rate ie 6.5% we would aim for full year 2018 unit sales levels of about 1,575 M (round that off to 1.6B) which looks to me like a very reasonable number for those among our readers who need the new target for planning numbers for this year. So even as our industry no longer grows at rate of double digits, where the world GDP is growing roughly at 3% rate, the smartphone market still grows at twice that speed in terms of its units sold per year. Not bad :-)

Tomi Ahonen :-)

[Per "wertigon" Ekström]

Ok, so for Apple market share tracking, that's 14.55 % market share for Apple in 2016 (moving average), Tomi will release the other numbers soon-ish I expect. :)

Interestingly, Apple moving average market share has been going down the entire year.

As for 2017, my simplified linear toy model [1] predicts around 219M units (2% growth) for Apple, and 1.576M units (5.8% growth) for global market. I expect Apple to do slightly better next year as loyal Samsung customers return to their new, non-exploding note but also iPhone 6 buyers come back for their fix, both cancelling out each other. Again, dampeners have been put in place since growth is not entirerly linear but more of a sigmoid, and we have entered a period of slower growth now.

Maybe I should update to a sigmoid-based model someday soon... For those interested in my amateur numbers I include the link down below. :)

[1] https://docs.google.com/spreadsheets/d/1hIbcjggIqiYF9lS2LbLWMcOypA6NoqTs-7EawsAEyfw/edit?usp=sharing

[Tomi T Ahonen]

Hi everybody

Just published the Top 10 final year 2016 numbers and Q4 of course. Enjoy

Tomi Ahonen :-)

[E.Casais]

@Gonzo

When dealing with currency amounts, it is essential to analyse them in constant terms.

Let us consider the ASP figures you provide, and make them comparable via the GDP deflator.

Because of Apple accounting peculiarities, 2017 actually means 2016, 2016 corresponds to 2015, etc. I only take 2007 as such -- it is the first actual year of the iPhone.

Here are the results, in 2016 USD:

2016 ('17) - 695.00$
2015 ('16) - 698.48$
2014 ('15) - 701.90$
2013 ('14) - 662.27$
........
2007 ('07) - 571.15$

The true history:

1) Initially, the iPhone had an ASP markedly lower than today's models.

2) There was a jump in 2014 -- because of the introduction of the first truly large displays (4.7" and 5.5"), which justified substantially higher selling prices.

3) Since then, the ASP has been eroding very slowly, or, taking into account the calculation uncertainty, just about maintained itself.

This gives a somewhat different perspective on the whole affair.

It would be interesting to look at the entire series (including all years from 2007 to 2012).

[E.Casais]

@Wayne Brady

Glad to analyse the trend if you provide the basic data...

[E.Casais]

And by the way: if you really have references to the ASP for various manufacturers, I believe many here would be interested in the information.

[E.Casais]

@Wayne Brady

The analysis makes sense as ASP per manufacturer, as it coalesces information on the model range, both in type (entry-level, mid-range, high-end) and across time (models being sold for years).

As for the ASP of Apple mobile phones: Notice that an ASP of $650.00 in 2013 was equivalent to $675.99 in 2016, while 702.00$ in 2011 was equivalent to... $771.12 in 2016!

In nominal terms, Apple tried to keep its offering at the same price point. In constant terms, the evolution betrays a massive drop from 2010 to 2013/2014 (basically, $100.00 in constant terms).

In economic terms, iPhones have become less unaffordable as years went. Whether by design, because of less expensive models, or because Apple just cannot sustain its hold as constant prices.

For Android, the drop in value is even more striking than what the raw figures show, since $441.00 in 2010 are actually $484.42 in real terms. Yes, Android devices as a whole have become much more economical -- which shows that they simply have left their original place as a "smartphone" rival to iOS, Blackberry and Symbian to become the "feature phone" (i.e. the entry-level and mid-range device) of today.

[E.Casais]

@Gonzo

Your diatribe is amiss.

You posted a message (since deleted?) whose only topic was a rising ASP for Apple ("up, up, up"). My answer is: when dealing with money, just looking at raw amounts is simple-minded. And provided a quick analysis.

That's it.

I did _not_ discuss Android at all. Your message was about Apple, and Apple only; I answered only on that topic.

I did _not_ criticize Apple, or stated that it was "doomed". Again, this was not the topic.

I did _not_ discuss competition, or customer loyalty, or made predictions about race winners, or the headphone jack, or anything else. None of this was the topic.

When later provided a link to relevant figures, I even stated that the drop in ASP for Android devices was even _deeper_ than what raw numbers indicate, based on the same GDP-deflator approach.

Hence, before you wander off the discussion -- that you yourself initiated -- into meandering vituperations that "Don't you think that maybe you got it all wrong?", (1) read what people wrote (2) make an effort to understand it, and (3) keep on topic.

[cycnus]

Apple split by models in U.S.
https://twitter.com/philiped/status/827134460948836352

[Wasp]

Correct Apple ASP numbers are here:

http://appleinsider.com/articles/17/02/02/see-how-apples-iphone-reached-a-new-record-high-asp-of-695

[Badger]

Yes, the sales figures include an extra weeek, had that not been the case sales would have been flat or even lower than Q415. Apple has also benefitted from the unfortunate Samsung Note 7 battery problems. In other years Apple started selling new models from the start in China. No more tricks in the bag left to pump up the figures. Still, impressive that there wasn't even a decline. But then again, the Iphone is not about the phone and the specs:)

[crun kykd]

Read that iPhone's good quarter was an anomaly because quarter was 14 weeks long, not 13 as usual. If you scaled according to 13 weeks as usual, it was a down quarter. http://lapcatsoftware.com/articles/14weeks.html

[Abdul Muis]

@crun kykd

The magic of accounting..... I wonder what kind of magic trick Apple bring next quarter? If their iPhone 8 (Q4 2017) can't beat the expectation, they will crash badly.

[Abdul Muis]

@Wayne Brady... I mean @Baron95.... I mean @Gonzo

I feel embarrassed, but not embarrassed enough to make a new name just to troll someone.

[Abdul Muis]

@Gonzo

You're not repeating my words. You putting words in my mouth. You selecting my words out of context!!! That's trolling!!! And without Tomi's moderation that will be out of control because you will always cut and paste without the full context of words.

[Abdul Muis]

@Gonzo,

1. You ONLY here to respond to me, when your afraid your real account be banned by Tomi, and all the post delete. You definitely know you were wrong, because you need to hide your identity.
_

2. I didn't insulted EVERY APPLE FOLLOWER as iSHEEP!!! YOU PUT THAT WORDS IN MY MOUTH!!! I know LOTS OF apple user were tech enthusiast, but I also acknowledge some of it's were iSHEEP!!!! DO YOU HAVE A PROBLEM WITH THAT??? Tomi also use the term iSheep. You can pick me because I'm just visitor, you have NO GUTS to pick Tomi on this subject with your REAL name/account.

2b. If you have problem with that, THAT'S YOUR PROBLEM!!!! You have a low self esteem, when someone mock the product you use, that you feel proud of using, you feel hurt. YOU SHOULD SEE A SHRINK, not trolling!!!
_

3. You ALWAYS quote me out of context on ".... about your son ....".... !!! I don't need to continue to say about this, you know how I feel about iSheep, and I REPEAT, I feel AHSAME if my kids want apple product to be an iSheep!!!! --- BUT --- If they think and they can reason with me why they should get an iPhone by saying the right stuff, not the iSheep stuff (such as because it's premium, it have retina display, it just work), then I will allowed them to buy it <<<<<<<<<<<<<<,--------------- NEXT TIME YOU QUOTE ME, BE SURE TO QUOTE PROPERLY!!!!

[Per "wertigon" Ekström]

@Gonzo:

If you keep stepping on toes, of course people will yell at you eventually :-)

So buzz off