## How many iPhone “5”s will be sold?

Phil Schiller stated (under oath) that when assessing sales for a new model of the iPhone, Apple used an easy shorthand:

Each new generation sold approximately equal to all previous generations combined.

That’s a helpful gauge. Did it hold and will it continue to hold?

In order to test this rule of thumb we need to know generational sales. Although we know overall unit sales for a given quarter, since Apple has been selling several versions simultaneously, we need to make some guesses about the ratio of generations in the mix. My guess is about 10% for 3G vs. 90% 3GS and 5% 3GS vs. 10% 4 vs. 85% 4S. That results in the following pattern:

The cumulative totals for these generations can then be generated and they appear as follows:

The solid bars are the shipments for each generation (to date) and the outlined bars are the cumulative shipments of all prior generations. The assumptions show that:

• The 3G easily outsold the original iPhone. In fact, it sold nearly four times as many.
• The 3GS also handily beat the 3G+original total by a factor of 1.6
• The 4 also beat the 3GS+3G+original. As the 4 may continue to sell into the future, the beat will only grow larger.
• The 4S is only half way through beating  the 4+3GS+3G+original. Assuming the current quarter’s sales roughly equal the last quarter’s, the total for 4S will reach two thirds of the sum of the previous generations (i.e. 100 million) by the end of September. Bearing in mind that the 4S is likely to remain in production at least one more year means it has a potential to come close to the target of 162 million.

This leaves us with the question of how many iPhone “5″s will sell. As it stands today, the cumulative total would have to be greater than 263 million units (including assumptions for the current quarter.) That target is shown below:

Is that a reasonable target?

Unfortunately, this is a moving target. As the 4S (and maybe 4) remain in production, the target continues to increase with time. However, we can still take a stab at this.

Recall the analysis of production based on budgeted CapEx spending. It resulted in a best guess of about 165 million iOS units sold in the following two quarters. I further forecast iPhones in isolation to be about 102 million over the same period. Taking that forecast forward and assuming a 60% growth rate,  I currently have about 200 million iPhones over the next twelve months. If 85% of those are the next generation, that yields about 170 million iPhone “5″s through mid 2013.

This is well short of a target of 265 million. But that’s only over the next four quarters. If the iPhone “5″ remains in production for at least as long as the 3GS then it might cross 200 million. There is also the question of whether the “mix” will begin to favor the older generations more. If that’s the case, we might see version “5″ meet its target.

Underlying all this is the question of a change in strategy toward more penetration (vs. current skimming.)  That might allow for sustaining the 100% historic growth rate. If so then Apple will easily sell 250 million iPhone “5″s.

When discussing “more than the combined previous devices”, are they not referring to only while the device is the lead device for that year?
If the numbers are frozen at the end of each year and subsequent sales of older devices are not counted moving forward, do we still have the same relative pattern?
If a device is still for sale, how can it be included in sales number referring to selling more that it did in total?

I think that it is pretty clear that Samsung has got a hit on its hands with the Galaxy 3 and will continue to be a problem for Apple achieving it’s sales goals. The only rational reason for the market to discount Apples stock relative to it’s growth rate is skepticism. The cell phone market is easily the most competitive in the world economy (Your own posts have shown how many corporate bodies lie alone this path). Apple is going to have to win in the court system, in innovation going forward, and in the supply chain to continue it’s current level of growth. One leg of that structure is going to fail.

There are structural problems with the single model strategy that Apple has stuck with. When you are trying to bring new technology to market there is a period of adoption that always is ahead of the full capability of the supply chain to make the newest model. Samsung has wisely decided to go after this early adopter as a strategy to take some of the wind out of Apple’s sales growth. The GS3 with a large screen, full 4G radios, and open source innovation fits this profile perfectly. Apple cannot continue to ignore the early adopters with out conceding more of the high price per unit ground to Samsung. My point is that Apple’s own success has made it’s current model for phone production and development a weakness. It may be possible to make 250 million phones in one year, it is not possible to do this with the newest tech. This is one of the reasons Power Computing was such a thorn in Apple’s side when they allowed them to clone the Macintosh. The little guy can use the initial small runs of a new process node to get started and then use this first mover prestige to market his whole line of goods.

This kind of competition fits your asymmetric thesis. Samsung also has it’s own supply chain to produce and screen for new tech early in the nodal transition. The silicon technology that underlies all of this competition is one of the reasons cell phones are such a competitive market. There is always a pulse of next generation tech entering the market. This leaves the door open for new competitors to enter the market and disrupt it. It also explains why copy cat tech is so effective. If a new competitor comes into the market like Apple. The best strategy is make a copy cat until a new node gives you the chance to innovate. This is exactly what Samsung has done.

• steven75

Just about everything you said has been true for Samsung since the original iPhone (Samsung’s “better” features back in those days: 3G, MMS, SD cards etc) and yet they have never even come close to the iPhone in sales, even if you combine the sales of all their smartphones (remember Samsung sales are still about 50% feature phones).

Samsung throws tech at the wall to see what sticks whereas Apple tends to only use technology they think will hit mass adoption and then focuses on that completely. Apple also has a worldwide network of retails stores that offer unparalleled support where Samsung has to mostly deal with third party retailers that have basically no training in Samsung products whatsoever.

• GaneshNayak

Samsung only smart phone sales have overtaken Apple in three of the last four quarters. Last quarter Samsung sold almost double smartphones as compared to Apple.

• steven75

Ah, you’re right on that. We are of course comparing Samsung’s shipped vs Apple’s sold but clearly they have sold more combined smartphones than Apple. Not more of any one model.

• Tatil_S

No, not shipped. Samsung does not release any smartphone numbers. Shipped or sold, they are all estimated for Samsung.

• Tatil_S

Well, Samsung numbers are based on estimates, as it does not release them. Usually, companies love to shout from the rooftops when they are successful. We also don’t know what the “smart” category exactly includes.

In any case, I am pretty sure dominating over the profitable segment is more desirable than selling more units. GM had the most sales in the world for, what, decades, and look where it ended up in the end. Market share beyond a certain amount does not necessarily make a company successful.

• http://www.asymco.com Horace Dediu

Two years ago Nokia was selling twice as many smartphones as Apple and three years ago Samsung was selling almost none. Apple was the top smartphone seller for two quarters, Nokia held that position for about a decade. I’m not sure what this proves.

Perhaps that copying an innovator is the best strategy. Especially since it allows low costs for the follower. Other traits include being willing to fit to multiple price points, and spread your bets among all the markets available. Microsoft did this on the PC. Samsung is doing it with the modern smart phone. It almost seems like the innovator is unwilling to reduce his price target, and as a result falls to the copycat who has no reason not to give away the store for a while just to build market share.

• Tatil_S

Samsing’s one year of good results does not show us much. Low prices do not guarantee success. HP can’t even sell its PC business and it has all kinds of different models, price points etc.

Besides, HTC is not holding back, either. It has many different models targeting different markets, so I am not sure why HTC is having a hard time now compared to Samsung nowadays. That also means Samsung may easily start struggling against Huawei, ZTE or HTC in the future or turn into another HP or Dell in 5 years despite having high volumes.

I think this is a misreading of MS’ history.
Yes MS copied some GUI ideas from Apple, but they were ALSO willing to put in the hard work to create NT, while Apple was not. (Or, if you prefer, Apple made a series of unfortunate mistakes in Taligent, OpenDoc and Copland.) And the existence of NT made Windows that much more viable a platform for business.

There is no obvious analogy here for Samsung. There’s not some obvious problem with Android or iOS that can be remedied by Samsung’s own OS. Rather, the OS is settled, the HW is almost settled, and the value-add is in the ecosystem — App Store and iCloud. Samsung don’t seem either capable of, or interested in, competing there.

The reason “the innovator is unwilling to reduce his price target” is that he doesn’t need to. Samsung is selling me a piece of hardware and software, and that’s all. Apple is selling me (let’s say) the same hardware and software PLUS a guarantee I trust that the software will get better every year for at least the next three years PLUS integration with the rest of my computing environment.
This is not the blog for Android fans to start complaining that those extras Apple is selling are worthless, or that their ecosystem is just as good; my point is that I believe CUSTOMERS believe they are valuable, and that allows Apple to maintain prices.

• PatchyThePirate

I’m a die hard Apple fan, but I’m not finding any fault with what PM3 is saying. Unfortunately, the (aptly named) shameless copiers that are samsung have been very successful in their strategy. One of Apple’s arguments in court is that samsung is taking away customers that would otherwise have been locked into the Apple ecosystem, and they are right. Unfortunately, samsung’s copying is rocking the boat of Apple’s deliberate and well thought out plan; I just hope Apple doesn’t forget that one of it’s strengths is it’s flexibility. However, I have a feeling the iPhone 6 is going to sell extremely well, and just as it’s tapering off this time next year, (boom!) China Mobile.

• http://www.asymco.com Horace Dediu

Before deciding which strategy is best it would be useful to measure how many attempts at being an innovation copier (aka fast follower) succeed. Once success is observed, everyone will want to copy it, so what distinguishes a “fast follower” is that they are not first, but so is everyone else. History is littered with attempts to be fast followers. Samsung itself was working to be a fast follower of Nokia for a decade and mostly failed. HTC was the most successful fast follower, until last year and today it’s in severe distress. What are the sustaining forces working for a follower to remain successful after every other “medium speed follower” targets them?

• jon

That apple lived life fast

• juanm105

“Samsung shipped about 50 million smartphones last quarter — about double the number Apple sold”

Shipped vs sold

• http://www.asymco.com Horace Dediu

Are we to believe that the basis of competition remains defined as hardware? Or, put another way, that hardware is what is not good enough?

• theothergeoff

Hardware improvements eliminates barriers in solving problems. But under the covers it’s the ‘ecosystem’ (OS, APIs, economic infrastructure [identity, trust, payment, resiliency/reliability, interconnectivity]) that drives more ‘capability’ into the system. The developer experience people talk about is telling here, both good and bad, as capability is apps, and apps drive HW sales (which drive HW reinvestment, which drives new HW capabilities, which drive apps….)

You can’t do Siri without an iPhone 4s. If NFC is not a fiction, you can’t ‘tap’ to buy with an iPhone 5. These are jobs we want our device to do… so hardware is important… but moreso, we need a core infrastructure (AppleID/ITMS credit card/a central BonJour system to track where your facetime target is). And this is the key thing… adding ‘breadth’ of HW is more important than ‘faster’ ‘more powerful.’ And Apple has always been good at maintaining the ‘right size’ of hardware breadth for future growth (no comet’s tail of floppy disks on iPhones)

It is not just the hardware, it is the total package, but remember Samsung has copied less as it has become more sure of its legs as the center piece to an ecosystem. Perhaps we have gotten to where the hardware is good enough, but the marketing runs through important “new” features. A big screen sells itself. An easy operating system sells itself. Hardware change was necessary for the upgrade that the iPhone offered to phones. Being the first mover is a really important advantage that Apple has held over the last 4 plus years. Samsung is cutting into that advantage.

Apple is not done in by all of this, but to keep the high margins it needs to keep the big lead. Samsung does look to be catching up to Apple in areas I mentioned. Please note that Samsung is the only manufacturer other than Apple who is making serious money in this market.

It is not just the hardware, it is the total package, but remember Samsung has copied less as it has become more sure of its legs as the center piece to an ecosystem. Perhaps we have gotten to where the hardware is good enough, but the marketing runs through important “new” features. A big screen sells itself. An easy operating system sells itself. Hardware change was necessary for the upgrade that the iPhone offered to phones. Being the first mover is a really important advantage that Apple has held over the last 4 plus years. Samsung is cutting into that advantage.

Apple is not done in by all of this, but to keep the high margins it needs to keep the big lead. Samsung does look to be catching up to Apple in areas I mentioned. Please note that Samsung is the only manufacturer other than Apple who is making serious money in this market.

• theothergeoff

I think the margins are less important than making the ‘curated marketplace’ more inclusive (the resort model). Amazon is doing the same thing, using their device as a marketplace lockin. Samsung is doing the same thing… it becomes the applications, the ‘jobs’ that the device does for you, that keeps you locked in.

I agree it’s less about the devices now, at least in this formfactor. Eventually, the device will get smaller (google glass), and a new evolution of mobile computing will start a new landwar. Apple’s model was to keep the ecosystem fluid as it moved from device to device (iPod, iPhone, iPad, and now the Mac all use the same basic ecosystem). That’s how they were able to leverage

Samsung, in it’s copy mode, doesn’t need so much an existing ecosystem, just an effective supply chain capability and leverage the status quo (the carriers are looking for ‘anything but Apple’ as a flagship phone). My guess is as the Samsung ecosystem builds out, there will be pressure on them the more they model Apple to disintermediate the carriers.

Precisely.
LTE was the last remaining “not good enough” piece for Apple.

Going forward, better battery life will always be desirable; but in two years it will only be the obsessives who care about the fact that the GeekMark for iPhone 2014 is 5% lower than the GeekMark for the Samsung Galaxy Nexus Pro Ultimate Sparkle 900 LTD (R).

So what’s NOT good enough then?
Possibilities:

- security vs being able to do things. Apple is ahead on security, Android on being able to get things done (ie easy file sharing between apps). Not clear how this will play out, and a single well-=publicized mistake by either company could have huge PR consequences

- identity is part of this. Single sign-on, and a password experience that is closer to 1Password than Keychain Assistant. Both Apple and Google are, IMHO, behind the curve here.

- payments. Passbook vs Wallet. Again both doing useful work, with different emphases for now.

- speech recognition. Again not clear how this will play out. Apple have an early start and some of the AI work in place, but Google have more data with respect to the pure voice recognition part. Google could put together a killer app for translation, except they screwed over by the balkanized carrier world which means such an app would be useless in the places I usually want it — some foreign country where I don’t have cell data except at exorbitant prices.

- intelligent assistant. Apple has part of this already in STFU mode added to the iOS6 notification center. Google has some strengths in Grand Central, but Apple counters those with FaceTime. Next up would be (IMHO) emotion detection in writing.

- ecosystem. I’ve mentioned this before. IMHO Apple is ahead. Smart watches are next, and who knows how that will go. Project glass follows, and I expect Apple have something similar in their research buildings. Smart watches will definitely happen; Glass headsets who knows?

What I see looking through this list is that there are plenty of areas post-hardware in which to compete AND that neither company has a decisive advantage. In fact it’s remarkable just how well matched they are across such a wide range of possibilities.
(But, relevant to our main theme — these are Android advantages, with no obvious Samsung-specific advantage in the list.)

• Jan6

We have to let go of this notion, that for Apple to win, Samsung has to lose.

The nature of the cell phone market to date has been a winner take all arena. Tip of the hat to the Steve Jobs quote, but I wonder if Microsoft would like to take back the decision not to bury Apple when they had a chance?

• Tatil_S

I am sure there would be others challenging MS if Apple was not around. Google and Facebook are not doing all that bad themselves.

• Gk

Great comment, could be better with proper grammar. Please review it’s vs. its. Thanks.

• PatchyThePirate

Thanks for you’re input.

• poke

What’s “open source innovation”?

The ability to get into the guts of a system to change things, or the ability to make changes on the fly. The hacker community that does this may be small but they carry weight in street cred and quick changes.

• Tatil_S

Hackers can play with a jailbroken iPhone, as they can with an almost equally locked down Android phone. The ability to get into the guts of the system has almost no bearing on the consumers, beyond the ability of manufacturers and carriers to create phones with some added or removed functionality and different looks. This is not a small matter, as I am sure it opens up a lot of niche markets and price points.

By the way, nothing is quick in the Android world when it comes to upgrades. God knows what would happen if it was not for its openness and all those hackers…

Not having to post an app to the app store makes Android the only choice in places like MIT, Ga Tech, and Cal Tech. Also the research community prefers having a legal open system.
As far as consumers go you are right. The only real pull there is cheap. Of course that is pretty basic in it’s own right.

Again, hackers with jailbroken iPhones don’t need to post apps to the app store, so not sure that’s really holding back the “street cred” crowd. OSS work, in particular, doesn’t even require a jailbroken phone. Xcode will gladly install anything you have the source of.

I personally, haven’t seen any evidence of Android being the “only choice” at MIT, Cal Tech, etc. but would be interested in seeing evidence of this.

• Ian Ollmann

Students at MIT, GA tech, CalTech should be well versed in the concept of orders of magnitude. Caltech student body: 10^3 Global phone market: 10^9. A 1 in a million case study of some remarkable and unusual people is a poor representation of the market.

Remember, the point of this website is not to cheer on Samsung or Apple; it is to consider what strategies a company can adopt to thrive in a rapidly changing market.

Your argument is that Samsung has a winning hand because it is willing to try a variety of different things and see what is successful.
I (and I suspect most readers) would counter that that is a very short-sighted view. When a new market opens up, there is a period when some companies can survive off this approach — consider the early days of calculators, or PDAs. But if history is any guide, this approach has a limited life-span. As people get used to a device, and begin to rely on it more, minor variations in how it behaves are treated as irritations, not features.
By the time calculators settled down, only HP and TI were capturing any value; and they sold a consistent line. The same was essentially true with PDAs.

I’d say, regarding Samsung’s strategy
(a) it’s less profitable:
- Samsung has to pay someone to design all those phone variants, to maintain inventory, etc; and we clearly see that. For all Samsung’s sales, they make less money than Apple
(b) it’s appealing to a less desirable demographic:
- People who really care about their smartphones, who use them seriously as more than phones, are, I suspect, losing interest in devices whose details have to be re-learned every year or two. I don’t know how you track this — and the internet is not much help as people who flood comments tend to be the same people who enjoyed dicking around with INITs on MacOS, the registry on Windows, /etc on Linux; ie people who DO enjoy re-learning a device every so often.
(c) it seems like it’s only going to lose traction going forward:
- The value Apple can add is in the wider ecosystem, in making multiple devices work together. I think with Mountain Lion — eg Notes and Reminders — everyday people are starting to a better feel for the promise of iCloud in this respect, without even thinking about it, and it’s starting to leak into 3rd party apps. Samsung have a really difficult road trying to compete with that; even Google have a hard time. I don’t want to call larger screens, or LTE or similar hardware features gimmicks; that’s silly and unfair because they offer real value. But they are the sort of thing that is entirely predictable and there’s no great value to being first to provide them. Retina display, to give a counterexample, is a slightly more difficult innovation because that requires some SW backend work to make it not suck with 3rd party apps; and even that is a momentary advantage.

Point is, what you see as a great strategy on Samsung’s part, I see as a series of tactical moves with no strategy behind them, tactical moves that will run out of juice fairly soon — as soon as two or three years from now — at which point Samsung gets dragged down into commodity land just like HTC, ZTE, etc.

Good response. Samsung does seem to be flopping around strategy wise. On the other hand, they are driven and hungry to capture some of the value they are manufacturing. I think you under estimate the support the whole open source movement gives this thing. It was pretty hard to have much sympathy for the record labels when they were taken down by file sharing, but most of us realize theft when we see it. So many people on the web, support copying as just part of good business. I wanted to see what you guys thought. This is the most thoughtful blog on these topics. Horace raised a good point about leaders being lonely and copiers legion. Microsoft was able to wrap up a whole cycle of innovation with its embrace, iterate, obliterate system of software domination. Google and the department of Justice put an end to that streak. Now Microsoft seems to be unable to really pull itself together. The friction that leaders get from the pack is really hard to miss. The whole Apple Zombie Users meme is one example. Innovation can’t survive intellectual property rights is another. I think Samsung’s current successful run is due to the market picking a winner to challenge Apple, and the allure of a big color saturated screen.

• Jeff g

That was well put. Even though I don’t agree, I respect your analysis and logic. I do think Samsung and Apple can both win, just like Coke and Pepsi have for decades.

• James Katt

The iPhone 5 will be THE MOTHER OF ALL UPGRADES. I’m upgrading all four of my iPhones to the iPhone 5. This will be fun.

• ptm88

what a mark….

• Jeff g

Two people in my office (out of 4) need new phones. One has a droid one as a dinosaur ish blackberry thing. Both are switching to iPhone, but waiting for the 5. To quote Mick Jagger, “I know it’s anectode, but I like it, ya, ya, ya” or something like that. Regardless, it will be big and probably capacity constrained. The machine is in full swing

• theothergeoff

One other thing that factors in is as time progresses, the availability of new fallow markets lessens. We know that the smartphone market just climbed over 50% of the mobile phone market… when will the ‘luddite’ ceiling hit (and/or will cheap android/WP8 phones erode these late adopters) We heard that India is hard to penetrate. China still has 2 major carriers not on board, and Europe desires a better price as less about subsidized contracts.

so 2 big questions…. Assuming that 1/2 the iPhone 5′s lifetime sales are ‘re-ups’ of the 3, 3gs, and 4, the other half are ‘new’ sales… what markets will be ‘opened’ for the iPhone5 to flourish? what capabilities will be there (or in Horace’s words, what new jobs skills will the iPhone 5 have to warrant ‘hiring it’) to drive existing feature phone and android users to commit?

• steven75

Personally I think at this point a new iPhone with basic changes that include an LTE radio, more memory, and a faster processor will be enough to guarantee record sales. Anything added past that is going to be gravy.

• theothergeoff

LTE (‘Fastest Downloads anywhere’) is a not a big deal for the public, and with the new contracts in the US, it’s a false economy (having more bandwidth is like more horsepower… it costs in gallons of gas [GBs]). At best it enables other capabilities on the phone (maps, turn by turn, siri, etc) for the masses (not everyone tethers, or needs a 1080P movie download in the back of a bus). LTE does bring parity between CDMA and GSM ‘xG’ devices, where data and talk is enabled for those CDMA carriers (verizon, sprint). And it depends on your carriers LTE deployment to exercise that capability… in short, it’s a YMMV sort of ‘feature’ in and of itself.

Apple has never marketed the phone on memory (other than storage), or a ‘faster’ processer (faster ‘phone’, but the processor is rarely announced with WhetStones, FLOPS, GPUs, and only to the techies… the ads and the marketing is not that).
I don’t see 200Million people buying a 5 because of LTE, some memory and a processor.

• Jan6

Plus new form factor and you can add another 100 million people.

• steven75

True the move in the US towards capped data transfer is rather opposed to the move towards LTE. I do believe that latency and transfer speed is noticed by the public, however.

• neutrino23

Just because people don’t need it doesn’t mean they won’t be interested. Certainly the carriers are all touting the benefit of LTE.

• sdbryan

Computers are never too fast, bandwidth is never too great, you can never have too much memory capacity. Anyone who claims otherwise is just not paying attention.

• http://www.asymco.com Horace Dediu

Improvements reach limits not when they are not wanted but when they are not valued and not put into use. We may all want cars with 500 horsepower engines and would be tempted by having such a car at the same price as one with 120HP. However, we will refuse to pay for the daily speeding tickets when using that power. And when not using that power we will have to ask what do we get in exchange for buying three times the gas we used to need. If improvements come without additional costs then they become “hygienic” and everyone expects them. It does not mean they get used. They tend to have only option value. However, whenever small costs begin to creep into the usage of these super features, they become reasons not to buy.

• GaneshNayak

250 million iPhone 5… Amazing…. 15 million S3 milestone looks so small now… ha ha

• the truth

Your talking about a little over a months worth of s3 sales compared to the lifetime of theoretical iPhone 5 sales lol

• Ittiam

My other comment, on Samsung smartphone sales, although accurate, got many responses against it. This one, highly inaccurate… you are the only one to point out

Apple bias through and through

• Steve_312

Interesting new logo Horace. Why the Illuminati?

• http://www.alexanderbosika.com/ Alexander Bosika

C’mon Steve_312. Horace is not Illuminati. He’s a member of the League of Shadows. Get up to speed with your conspiracies!

• Steve_312

What conspiracy?

• Jony

I see this as highly possibly. LOL. illuminati hiring Horace to figure out all the necessary ‘jobs to be done’ so they can make more loot. I bet Dan Benjamin initiated the deal, he’s always in a hurry to promote all these next companies in the podcasts..#everydayimhustling..lol

Horace, you’ve expressed disappointment that Apple hasn’t addresses India, where it faces a channel problem. I’ve read as many as 10% of mobile phones in Africa are counterfeit (and almost none smart). If the next phone is LTE it almost can’t be targeted to these and other emerging markets.

Are there enough potential purchasers in current markets to reach 250 million sales?

• KirkBurgess

If the next iPhone has LTE, it will of course still include 2G & 3G cellular technology.

• http://www.asymco.com Horace Dediu

At the end of 2011 there were more than 1 billion mobile‐broadband subscriptions worldwide (ITU.int). The growth in mobile broadband was 40% in 2011. If growth is maintained into this year and next (the life span of the next iPhone) then there will be an addressable market of 2 billion users. That means about 12.5% market share for iPhones. This would be a drop from current levels of smartphone market share.

• Leromero

The rule of thumb is the exponential growth rule:1,2,4,8
The last member is greater than the sum of all prior: 8 >7

• sdbryan

Yes, for once we actually have exponential growth in the mathematical sense and not just the hyperbole sense. But the term is used so inaccurately in most cases it is probably better that Phil Schiller gave the definition rather than the usually abused terminology.

• Anonymous

Apple needs another “revolution” if they are to continue their record sales. The original iPhone shook up the industry, the fallout is still being felt, but things are pretty clear at this point. RIM and Nokia are on their death beds, Samsung is leading.

What’s Apple doing? Apparently still coasting on the fumes of their original iPhone success. They need something new, something beyond just slapping a better radio/CPU in the same old thing. They need something that makes people sit up and pay attention again.

• http://www.asymco.com Horace Dediu

Which people?

everyone.

• Jan6

Samsung is leading in a way so that 77 % of all profits go to Apple.

If Apple doesn’t address the Mickey Mouse-size screen in the 5s, I’m going over to Samsung.

You are not the only one! I hope Apple is listening.

• Ayuh

Goodbye.

Don’t let the door hit you, where the Good Lord split you.

Ayuh

If Apple doesn’t enlarge the Mickey Mouse screen in the 5s, I’m switching to Samsung.

• Hosni

Well this shows how Apple can miss their sales targets (incorporated into earnings guidance): They have a stupid method of forecasting, suitable only for a small business.

• kevin

In which quarter did Apple miss the sales and EPS targets that they announced?

• Hosni

Horace, I think it’s great that you and Apple can forecast iPhone sales without even knowing their features or the features of competing phones or the state of the world economy! iPhone 9 will sell 16 billion.

• BK

If competition from Android get to a point where it bothers Apple, they could, in theory, buy Google and kill Android.

• Jerry

Horace do you have an opinion on Google’s strategy as it relates to Microsoft & apple ? It seems that they have trampled on IP owned by their legal opponents . I’m a layman but if they & their counterparts lose the court battlles ,what then happens within the market ?