In the latest Apple Earnings report, Apple announced a few details that are relevant to the forecast of the business:
- The global active installed base for iPhone reached an all-time high at the end of December, surpassing 900 million devices. This represents growth y-o-y in each of five geographic segments, and growth of almost 75 million in the last 12 months alone
- There are now over 360 million paid subscriptions across the Services portfolio, an increase of 120 million versus a year ago. Apple expects to surpass 500 million in 2020.
- The installed base grew to 1.4 billion devices by the end of December. This includes all-time highs for each of the main product categories and all five of their geographic segments.
I added all these data points to the previous reported figures related to installed base, subscriptions and Services revenue.
Note that all the data sets show a linear growth path. Most prominent is the paid subscriptions line which is growing at exactly 30 million per quarter. The new projection of 500 million by 2020 is exactly in-line with this projection.
Note also that active devices and iPhones are on similar trajectories. The figure for active iPhones is interesting because it very closely relates to active users. It’s extremely likely that 900 million active iPhones means 900 million active iPhone users. An iPhone is useful if it has a data plan associated and it’s a costly proposition for most people to have multiple devices and multiple data plans.
This close relationship between iPhone usage and iPhone users means that we can approximate the entire unique user base for Apple. There might be “10s” of millions of users who use Apple devices but don’t use iPhones but there might also be multiple iPhones for some users1
So it’s very likely that the total Apple user base is between 900 and 1 billion. If it’s not 1 billion now then it’s very likely it will be 1 billion within 12 months.
In May 2010 I made the prediction that Apple would reach a billion users in 5 to 8 years. The prediction was based on the first 100 million iOS users. The company reached one billion active devices in a bit over 5 years and is about to reach 1 billion users 8 years since.
Apple stated in the latest conference call that very little of Services revenues depends on the any previous quarter’s unit sales confirming that Services is driven almost entirely from the user base. With almost a billion users, 90+% loyalty rate, 95% satisfaction, 120 million paid subscriptions and 75 million new users/yr, the analysis of Apple as a services company is becoming interesting.
- I would be inclined to assume that there are more non-iPhone Apple users than multiple iPhone users. [↩]