iPhone Q1 Results: Second Year in Row that January Quarter Sales are Down in Absolute Units vs same Quarter the Year Before

So we're into the quarterly sales data in the smartphone wars. Apple reported 50.8 million units of iPhones in calendar quarter 1 ie January-March quarter. That is down 1% vs same quarter a year ago. More relevantly, this is now the second consecutive year that the first quarter of the year starts with unit sales actually down vs the same period the year before. Apple's best-ever Q1 was in 2015, when they sold 61.1 million iPhones. That came down to 51.2 million in Q1 of 2016 and now down further to 50.8 million for Q1 of 2017. Apple's peak year in total annual iPhone unit sales was of course also 2015 with 231.4 million unit sales. That came down to 215.4 million last year and now this weak start to 2017 suggests Apple heading to perhaps flat, perhaps even slightly more down sales this year. The market share picture looks worse, Q1 of last year Apple held 15.3% and now has 14.6% a decline of three quarters of one point of market share.

In terms of annual market share, Apple picked a good year to have declining sales last year, as the industry growth overall stumbled and was essentially flat. So Apple's market share did not suffer much. They dropped from 16.1% in 2015 to 14.6% in 2016. But the industry has returned to growth. The industry is now again growing at 4% per year and now if Apple sales are flat vs 2016, their market share will fall to about 14%. And until the next models arrive, there is nothing to rescue the rest of the year from the regular annual 'down-cycle' that Apple now is in. This before we consider the rumors that the new iPhone 8 may be delayed in its launch. 

If Apple ends at 14% it is nothing to sneeze at, Apple is safely the second-largest smartphone maker still this year, but Huawei might break into double-digits and if this year ends with a race say of Apple around 14% and Huawei around 12%, then NEXT year we could have a real race... Also please remember, Apple is the most profitable company in human economic history and sits on a gargantual pile of cash. They are more rich than god. So don't cry for Apple, they're definitely the biggest winner in smartphones, in handsets, in mobile, in tech and in corporate industry the planet has ever seen. But just don't think the iOS ecosystem is a 'mass market'. It is a niche market for rich people - albeit a very large niche market.  

Comments

[Huber]

@SuperCycleissameasReadandLearn:

What kind of idiot are you? In 1997, the Phillipines fought the hedge funds with $70 billions. This was not enough, they lost.

In 1992, George Soros (who _IS_ a real person) won against the fucking Bank Of England! This is the central bank of the UK, in case you don't know.

"I have enough money to not worry about being attacked by hedge funds" are famous last words, nothing more.

[Winter]

@Wayne Brady
"They aren't a conglomerate like GE or Samsung where they will just buy other unrelated businesses."

That is the point. Apple hoard immense amounts of money that could have been invested in productive enterprises to produce peoducts and create jobs. Now it is stuck in short term liquidities that are only useful for speculation.

And tax evasion is not something "Good".

[b]

@Wayne

Your post missed the big picture, which is that Apple's marketshare worldwide is going down and down.

Apple sitting on a obscene pile of cash will have as effect the killing of innovation at Apple. Apple, for a while already, has stopped innovating and it is faking the innovation by window shopping. I think that in the future Apple will rely 100% on buying the whole innovation that they need from outside of Apple because it is so much easier to throw money at a problem by out sourcing it than to try to solve it yourself and innovate doing while doing it. Look at Tim Cook who has had flops, like for example the iWatch:
http://www.dailymail.co.uk/sciencetech/article-3152514/Apple-Watch-FLOP-Sales-gadget-fallen-90-April-report-claims.html

Apple will be here with us for the next 20 years or more BUT Apple will start to look more and more like today's Oracle.

[Winter]

@Wayne Brady
"it's not a BAD thing to have a lot of money."

That is debatable:

Cash-Hoarding Companies Are Hurting the Economic Recovery
Roughly one-third of the world's largest non-financial companies, including Apple, Microsoft and Google, are hoarding $2.8 trillion in unspent cash, preventing much-needed funds from entering the global economy.
https://www.theatlantic.com/business/archive/2014/01/companies-hoard-cash-trillion/357254/

Too Much Cash Isn't Good for Apple
https://www.bloomberg.com/news/articles/2013-02-26/too-much-cash-isnt-good-for-apple

@Wayne Brady
"Following tax laws is not tax evasion."

You are right, I should have used the word "avoidance" instead of the word "evasion" as the latter is illegal.
https://www.thebalance.com/tax-avoidance-vs-evasion-397671

But we should be careful to distinguish "legal actions" from "good" or "moral" actions. A lot of harm can be done and a lot of lives can be ended prematurely while purely acting within the law.

The true costs of tax avoidance
For as long as leaders from low-income countries are excluded from the solution, tax avoidance will inflict costly and sometimes life-threatening consequences on millions of individuals
http://www.worldfinance.com/strategy/the-true-costs-of-tax-avoidance

[b]

@Winter

Excellent finding, regarding this:

Too Much Cash Isn't Good for Apple
https://www.bloomberg.com/news/articles/2013-02-26/too-much-cash-isnt-good-for-apple

[Winter]

And want to know why Apple is not innovating? It is part of a trend:

America has become so anti-innovation – it's economic suicide
The fall of Juicero isn’t just entertaining tech industry stupidity – it’s the sign of a country refusing to break new ground
https://www.theguardian.com/technology/2017/may/11/tech-innovation-silicon-valley-juicero

[Winter]

@Wayne Brady
"Innovation is going on all over the world."

You did not read the article, it seems.

[TizenExperts]

@Tomi
New Tizen phone is out.
https://www.google.fi/amp/m.gsmarena.com/samsung_z4_with_tizen_30_unveiled_selfies_and_simplicity-amp-25000.php

[TizenExperts]

If Samsung would sell Z4 here I would buy one without a hesitation. You can guess that from the Google URL that I just added (while not being aware I was going to paste Google URL when I copy a GSM arena URL). Thank you Google and Android, I hate you.

If only Samsung was not being managed by a bunch of idiots they would realize what a pent-up demand there is for Tizen phones globally.

[Winter]

@Wayne Brady
" And rather than retorting with the obvious truth that American companies now control the entirety of the smartphone operating systems and most all of the money being made in smartphones...I "

Innovation follows research, and research follows funds and subsidies. Subsidies are going down in the US and up in Asia. Innovation is going down in the US and up in Asia.

An obsession with high ROI on short notice and hoarding cash is very bad for innovation. As is currently seems to be illustrated by Apple.

[paul]

Apple's R&D (where the innovation happens) is small for Apple's size. It is small even compared to Microsoft. One could argue that Apple is faking the innovation and not doing it.

[Winter]

@Wayne Brady
Your List

So did MS before, and it wasn't even innovative when they did it all those years ago.

[Gul Dukat]

@Wayne Brady

"... it's own video chat "

Apple video chat = stealing
Apple lost

http://fortune.com/2016/10/02/apple-loses-patent-to-virentx/
"A federal jury in Texas on Friday night ordered Apple to pay more than $302 million in damages for using VirnetX Holding Corp's patented internet security technology without permission in features including its FaceTime video conferencing application.

The verdict came in a new trial in Tyler, Texas that had been ordered by the judge in the case, Robert Schroeder, who last August threw out VirnetX's $625.6 million win over Apple from a previous trial because he said jurors in that case may have been confused."

[Winter]

@Wayne Brady

Incidentally, an iCar would have been innovative, or a self driving car. Many other projects would fall under innovations. But your "own" ARM processor or payment method sounds more like a meto project.

[Wayne Borean]

Rather than argue, here's Apple's jobs list for hardware

https://jobs.apple.com/us/search?jobFunction=HDWEG#&t=0&sb=req_open_dt&so=1&j=HDWEG&lo=0*USA&pN=0

And for software

https://jobs.apple.com/us/search?jobFunction=SFWEG#&t=0&sb=req_open_dt&so=1&j=SFWEG&lo=0*USA&pN=0

For comparison here's Microsoft

https://careers.microsoft.com/search.aspx#&&p2=all&p1=18%2c47%2c1%2c2%2c6%2c17%2c49%2c37%2c48%2c3%2c22%2c4%2c19%2c26%2c5%2c46%2c27%2c41%2c15%2c25%2c50%2c20%2c24&p3=all&p4=US&p0=&p5=all

And Google

https://careers.google.com/jobs#t=sq&q=j&li=20&l=false&jc=DATA_CENTER_OPERATIONS&jc=DEVELOPER_RELATIONS&jc=HARDWARE_ENGINEERING&jc=INFORMATION_TECHNOLOGY&jc=NETWORK_ENGINEERING&jc=TECHNICAL_WRITING&jc=TECHNICAL_SOLUTIONS&jc=TECHNICAL_INFRASTRUCTURE_ENGINEERING&jc=SOFTWARE_ENGINEERING&jc=MANUFACTURING_SUPPLY_CHAIN&jc=PROGRAM_MANAGEMENT&jcoid=7c8c6665-81cf-4e11-8fc9-ec1d6a69120c&jcoid=e43afd0d-d215-45db-a154-5386c9036525&

My point is that everyone seems to be hiring engineers, including Apple.

[paul]

@Wayne

your forgot to show what is the link between company X hiring some engineers at time X and innovation. A company can have long list of jobs available on its website and still not innovate at all. Apple nowadays does fake innovation.

[Winter]

@Waybe Brady
"Rather than argue, here's Apple's jobs list for hardware"

So what is this innovation? Ads are not innovation. The ARM processor was innovation, the A cpu is just a step.

[Winter]

Sorry mixing up Waynes. I should read more carefully.

[Tester]

It's still not innovation.

Current ARM CPUs are just incremental upgrades to an existing design, not much different than the various generations of Intel Core CPUs.

What was innovative is when AMD took the existing x86 design and added 64 bit support to it (an approach later to be copied by ARM as well for their 64 bit architecture) - but that was over 10 years ago. CPUs have gotten faster since then because the hardware got optimized but it's still the same basic design of how instructions get processed - and that applies to both x86 and ARM.

[Gul Dukat]

"And it's how Apple maintains a huge performance lead with chips that have less cores and runs at slower clock speeds with less RAM than the competition."

Android = real/true multitask = want lot core = 8 core good
Apple = fake multitask = want small core = 2 core good
apple os lame multitask = 8 core no use

you read single core speed, you think apple good
important multi core speed because is true speed