Apple Quarter and Few Other Items in Smartphone Wars

So Apple gave its results for calendar quarter 3 ie July-September. They sold 46.7 million iPhones, which is up 14% vs previous quarter but this is the normal pattern with the strong swings in Apple annual sales cycle. Last year this time they were up 13% Quarter-on-Quarter so it's very similar performance on the quarter when first new iPhones are released. Year-on-Year is the more meaningful comparison in Apple Quarters and that business is up 3% which is also the rate that the industry is currently growing. Apple's market share currently (preliminary) is 12.9% and they are on pace for an annual market share of about 14.5% which would be flat vs last year. Flat market share would allow for that about 3% unit growth Year-on-Year. Apple made as per usual a huge ton of money. Some analysts were a bit disappointed that the average sales price wasn't quite as astronomical as they had hoped but they still make more money than god. Ho-hum. Nothing to see here. What else is going on?

Samsung said they had monster quarter but didn't give their numbers of units of smartphones sold. Sony once again lowered their annual sales target now to 14.5 million. LG made money elsewhere but not in mobile phones. Xiaomi had a great end to their quarter selling for the first time over 10 million units in one month and have climbed to second bestselling smartphone of India (behind Samsung). Pantech the third-largest South Korean phone manufacturer which recently went bust, was sold (again) as it is being split into parts. HMD's Nokia comeback looking strong, I have separate postings about that.

A few interesting handsets are around that work into a new direction for the stale race in form factors. Razer introduced a gaming-oriented super smartphone in top premium price range. Available in USA and Europe (at least) with some carrier support on both continents (runs on Android of course). Meanwhile ZTE introduced a folding-screen smartphone, the Axon. CAT has done a new release of its super-heavy-duty outdoor smartphone which includes the FLIR camera. And there is a Chinese phone maker, Koobee who are able to take 80 mp pictures (as software gimmicks on far more modest sensors).

Thats about the round-up for today. We'll see what info we get from the big analyst houses and if anyone mentions Nokia already in their surveys of the market. Then we'll wait also for the few other smartphone makers to give what little info they do give us, and I'll do the Q3 results of course.

Comments

[E.Casais]

@GoodTimes

"Or you have to check the currency fluctuations."

They play a role, but a minor one. Those spikes towards significantly lower prices are actually special offers -- they last only one or two days before prices return to very small oscillations around a normal level.

Writing this, I realize I have not been very clear. The figures I gave are for the lowest market price -- median prices are generally higher. Here, again in CHF:

Note 8 (Midnight black)

64 GB
Min: 939.00
Med: 1000.00
Max: 1199.95

128 GB
Min: 1039.00
Med: 1049.00
Max: 1049.00

256 GB
Min: 1149.00
Med: 1149.00
Max: 1149.00

There are just a few offers for the 128/256 GB versions.

iPhone X (silver)

64 GB
Min: 1169.00
Med: 1199.00
Max: 1360.00

256 GB
Min: 1339.00
Med: 1389.00
Max: 1599.00

CHF and USD are approximately at parity, so you can get a direct idea of how expensive those devices are (Samsung: very expensive, Apple: filthily expensive).

"Buy One, Get One free"

I never see that kind of promotion here. Anyway, there must be some kind of strings attached to it.

[Jim Glue]

I'm bummed the HomePod is being delayed till next year. Was going to be my Christmas present to myself :(

[b]

@GoodTimes

> Apple wants to keep me happy and I like that.

No, think that Apple wants to keep you happy but actually Apple wants your money by you paying the iTax.

Apple 5 years ago had over 22% of worldwide phone market share and now it has around 14% and it is on second place behind Samsung. In another 5 years from now Apple will have around 6% of worldwide market share. Have fun paying the iTax while you still can.

[Jim Glue]

Lies, damned lies, and market share.

Apple is selling far more phones at 14% "new sales market share" than they were at 22%. The market is always 100%. The unit sales that market consists of has grown substantially.

New sales market share is only about sales, while Apple has 20% of the install base.

Apple's install base is already larger than Nokia's smartphone market ever was. Even Nokia at it's height did not sell as many smartphones as Apple does today.

So who do you want to be? The market leader of a small market....or Apple, the #2 market leader of a MUCH larger market?

Only 1 company sells more smartphones than Apple. It's only by comparing Apple to the total market of smartphones that you get the notion that Apple has a small market share. Everybody else's market share is smaller, except Samsung.

How bad is Apple's smartphone business? While the leading platform, the absolutely dominant platform has seen the ASP fall to below $200...Apple's ASP keeps rising and is above $700. So consider that Android had to drop their prices to less than 1/3rd of the iPhone...heading to 1/4th of the iPhone and in doing so, only managed to drop Apple's market share from 20% to 14%. In what other market can the minority player do so well while not only sustaining but increasing ASP?

Apple's 14% market share is only against the "entire market" even though Apple's cheapest new phone is almost twice the cost of the average Android phone. Every market analysis of every other kind of product includes market segmentation. Nobody reports on BMW's share of the total car market. Ford is compared to Toyota and to GM because they all participate across the price spectrum. BMW is compared to Mercedez and to Lexus because it's foolish to compare BMW sales against Ford.

Apple is increasing it's lead in market share of the $600 and up flagship segment.

All of this and I didn't need to resort to the "p-word".

[Winter]

"Apple is increasing it's lead in market share of the $600 and up flagship segment."

And Apple has 100% of the iOS market in their pocket.

[Jim Glue]

Winter - absolutely. That's Apple's key to exist. They develop their own platforms and DON'T sell the platform to others to compete against them.

But I realize the point you were trying to make. It goes back to whether you understand the rational between comparing luxury cars to other luxury car sales, and not to "total car market".

[paul]

@Jim G

> Apple is selling far more phones at 14% "new sales market share" than they were at 22%. The market is always 100%. The unit sales that market consists of has grown substantially.

The fact is that Apple is number 2 and soon it will be number 3 regarding worldwide phone market share. Soon (next year hopefully) even Huawei will be selling more phones that Apple.

> How bad is Apple's smartphone business?

Apple is doing pretty bad in smartphone business. It is barely number 2 and soon will be number 3 regarding worldwide phone market share. 5 years ago Apple had over 22% worlwide market share and now it was barely 14%. HomePod is doing badly as expected (see: https://www.bloomberg.com/news/articles/2017-11-21/why-apple-s-homepod-is-three-years-behind-amazon-s-echo ). It is many years behind Google and Amazon. iWatch is a big flop and the proof is that not even Apple releases the exact numbers regarding the sales! How worse than this can it be?

[Jim Glue]

Again, you are lying with market share.

Apple is selling more phones....you know...that's where money is made...actual sales. Apple is selling more phones now than ever....and at higher ASP than ever. That is not doing bad. That is doing terrific.

And you have dropped Apple to fourth place on expectations of the future. That future hasn't arrived. But you've thought Apple has been doing terrible as the 2nd best unit market share holder for almost a decade.

It's a marvel that a company selling a $700 product has any market share at all when selling against a < $200 product. But we all know that it's not REALLY the same market.

Android has put every other platform out of business. Except for Apple's. Apple's platform is SO good, SO desired...that Google themselves pay Apple billions just to be the default search provider on Safari. All of Google's apps are on Apple's platform except those that can't be.

Don't you remember when it was supposed to be a terrible thing that Apple's Watch would only work with iPhones? How terrible a strategic mistake to ignore the "massive Android market". Yet Apple sells far more Watches than all the Android watches combined....because Apple's customers are the most lucrative customers to have.

Apple's services (save for Apple Music) are exclusive to the iPhone. How terrible to limit yourself to such a small niche. Yet Apple is making FAR more money on services for it's smartphone than any other Android manufacturer is making selling smartphones.

Yep, Apple has missed their target launch for the HomePod. Yet look at the difference between Apple's Airpod launch and Google's year-late response. Google has put out a product getting panned everywhere in a rush move to "catch up" to Apple. Meanwhile, Apple is years late with an Echo challenger and is content to continue to wait until they have the product they want to ship.

Apple will sell far fewer HomePods than Amazon's echo family units....but I bet you Apple will make money while Amazon is still giving away it's tech products in hopes to sew up a market. You know...like how the Android smart watches were going to prevent Apple from entering. Or...you know...like the entire smartphone market before Apple entered.

A billion iOS devices have been sold and the iPhone active customer base is approaching 650M. 650M with a 95% retention rate. Means another 600M sales are ALREADY in the bag before Apple makes it's next phone or buys it's next ad.

[paul]

@Jim

> Apple is selling more phones now than ever...

But Apple's worldwide smartphone market share is going down. 5 years ago it was over 22% and now is barely 14%. Basically, you are saying that a sinking ship now is pumping more water than never while is sinking faster than never.

> Again, you are lying with market share.

You are bullshiting and trolling again. Your posts will be deleted soon.

[Jim Glue]

It's not trolling. Apple is #2 in market share. Android has absolutely won market share. Samsung is the winner in market share and seems secure for the next few years.

What is NOT true is that Apple is in some kind of trouble due to "falling market share". Tomi is not on the "Apple is doomed" bandwagon. That's just a wet dream some of you regular posters refuse to give up on.

It is true that Apple's market share has fallen. It is most likely true that Apple's market share will fall more.

[Tomi T Ahonen]

Hi Gang

Hey, this will interest MOST of you (except those obsessing only about the rich world haha). Rare THAILAND market data via Canalys. I missed this last month. Thailand is in top tier of 'Emerging World' countries ie rather rich nation for the 'Rest of the World' but it is largish, at 69 million population. VERY good market to study to understand similar nations like say Malaysia, Vietnam, South Africa, Argentina etc.

What makes the Thailand Canalys market data exceptionally juicy for us is that it includes.. a price pyramid (thank you Canalys! or should I say Ka Pun Kap?). So yeah, they only reveal top 2 brands Sammy is number 1, Oppo number 2 in Thailand but total market size, growth rate, 3 price bands etc. VERY useful tidbit of data from one of the more affluent of the Emerging World countries.. Via Bangkok Post

https://www.bangkokpost.com/business/telecom/1349402/smartphone-demand-continues-unabated

Enjoy (I'll be doing Top 10 shortly)

Tomi Ahonen :-)

[Tomi T Ahonen]

Hi All

And to see how utterly different the US market is from the rest of the world, here is Strategy Analytics Top 5 of US market (now 3rd largest in world, behind China & India) To 5 for Q3. 1 Apple, 2 Samsung, 3 LG, 4 ZTE, 5 Moto (yes Lenovo)

http://247wallst.com/consumer-electronics/2017/11/07/motorola-snags-more-of-us-smartphone-market-as-apple-dips/

Tomi Ahonen :-)

[Tomi T Ahonen]

Ok gang

the Top 10 is now up. Enjoy

Tomi Ahonen :-)