comScore reported that 15.4 million iPhones were in use in the US as of November. (25% share of 61.5 million total smartphones.)
We also know that about 75 million iPhones were sold by November since the product launched. With about 17 million units older than two years, and assuming that half of those might still be in use and that all the iPhones less than 2 years old are still in use, we get an upper bound of 66.5 million iPhones in use globally.
That means 23% of all iPhones are in use in the US and that 77% are in use outside the US.
Can this be verified?
The release of the iPhone is rightly acclaimed as a watershed event in the history of telecom. It was a sensation. But it was also a product that was widely underestimated and dismissed. Even today expert opinion is divided. The critics of the product transitioned directly from labeling it a superfluous bauble to an obvious and copyable sustaining innovation. Advocates of the product describe it as revolutionary and dazzling with the potential for capturing significant profit share due to premium pricing and positioning.
So which is it?
Morgan Stanley’s Web 2.0 update came out yesterday and it’s full of nice charts. Here is one:
Note that the expectation for smartphones to overtake all PCs (including netbooks) will happen when smartphones sell more than 450 million units per year.
In 2013 nearly 650 million smartphones are forecast to be shipped.
My estimate for the iPhone in that year is 180 million. That would give iPhone (excluding iPad and iPod) about 28% share. The last quarterly figure is around 17%.
Perhaps 180 million iPhones per year will be defined as failure by those who consider over 80% share as a threshold for success but I still think it will be a healthy business.
Even assuming a cut in ASP to about $350, Apple will still be able to get about $62 billion in sales from phones (a bigger number than 2009 total sales for the whole company).
I would also add that by the end of 2013 Apple will have sold about 470 million iPhones. Though many will be out of use by then, the installed base will not be small (I’d guess about 300 million). Including all iOS devices, 500 million is a credible estimated audience for developers.
It’s entirely possible that Android variants, offshoots and forks will add up to a bigger number by then, but to pre-emptively declare the platform “war” won because the also-ran Apple will only have half a billion users seems disingenuous.
I am dead serious. I am now convinced that we have enough data to determine for a fact that Apple will not only see a dramatic decline in quarter-on-quarter sales in units of the iPhone this January-March quarter (which is the predictable pattern and no surprise) but that we will also see a decline in iPhone market share against at least HTC and Blackberry; that would be demoralizing news in itself. I know now that the numbers are clearly stacking up so, that the annual sales level of iPhone units, will result in a decline in iPhone annual market share in 2010.
via Communities Dominate Brands: iPhone in Memoriam: A History from its Peak Moment of Success. But who copied whom?.
Contrary to the loud and emphatic proclamations above, the data shows that the iPhone’s market share gains have been steady.
The following chart shows iPhone market share by quarter with a 4-quarter moving average. Total market size is reported by IDC.
If estimated warranty expense had remained constant in absolute dollar terms ($150M), GM would have been 38.4% vs 36.9%. If If estimated warranty expense had remained constant in as a percentage of revenue (1%), GM would have been 130bps higher at 38.2%.
via Financial Alchemist: Warranty Expense Crimps Apple’s Margins in 4Q10.
Muller spots the culprit in the margin drop. He notes that this is money set aside and may have been in anticipation of returns of the iPhone 4 due to antennagate. Note how in 3Q cost of claims was 155 and accruals were 157, about a 1:1 ratio whereas in 4Q costs were 286 and accruals were 457 about 1:1.6.
It’s possible that if the costs this quarter do not materialize then we could see a margin upside surprise.
(Contrast this insight with today’s large scale sell-off in shares due to mass media repetition of earnings guidance from the conference call as shocking “news.” See also evidence of unlawful trading behavior here.)