Gartner reported that PC shipments totaled 80.3 million units in Q3. Subtracting an estimated 4.4 million Macs yields an estimated 75.9 million Windows PCs.1
This total is lower than the total shipped in the same period of 2008.
The graphs above show the Continue reading “The Five Year Plan”
In yesterday’s post forecasting smartphone penetration I neglected to mention the exact subset of the US population being sampled. The analysis is based on comScore’s sampling which covers only those devices which are the “primary phone” for users over 13 years old and not provided by an employer.
In other words, the population being sampled is not meant to identify how many phones will be in use but rather what is the primary phone for those non-children who choose their own phones.
So the measurement that can be obtained from the S curve analysis is a subset of all phone users and will not identify exactly how many phones will be in use. Given that, this is what that subset looks like:
I drew a line showing the census data (and projection) for the US population and estimated what percent of that population might be Continue reading “How many smartphone users will there be in the US?”
The latest comScore data places penetration at about 61%, up over 10 percentage points from the same time last year. The 50% last year is itself up nearly 14 percentage points from the same time in 2011. This progress in the diffusion of smartphones is shown the following graph:
I set the time frame for the graph to start in 2005 because there was still a market at the time. We can estimate the number of users from data supplied by Continue reading “When will the US reach smartphone saturation?”
In May 2012 I wrote:
The pattern may be that companies either have short post-trauma lives of about two to three years or relatively long post-trauma lives lasting 4 to 5 years. What determines this life expectancy and how long do RIM, Nokia and LG have?
via Post-traumatic life expectancy of phone vendors | asymco.
These comments came right after BlackBerry (then RIM) announced a loss and thus entered what I called the “post-traumatic” phase of its existence.1 The observation I have been making is that once a company begins to generate negative operating margins from phone sales, that phone business never recovers.
The question then becomes one of gauging how long they have before the business is sold, dissolved or merged. Since that update, both Nokia and RIM have tentatively agreed to be sold. If the sales go through then we can update the graphs as follows:
[Graph note: solid bars in the second graph indicate companies which exited and thus the duration of life post-trauma. Continue reading “Estimating HTC's post-traumatic life expectancy”
Publicly, Mr. Lazaridis and Mr. Balsillie belittled the iPhone and its shortcomings, including its short battery life, weaker security and initial lack of e-mail. […]
Internally, he had a very different message. “If that thing catches on, we’re competing with a Mac, not a Nokia,” he recalled telling his staff.
From How BlackBerry blew it: The inside story – The Globe and Mail
The whole article is worth reading, detailing as it does the decision process inside BlackBerry during the painful disruption of its core business.
What struck me most however was how similar their decisions were to those of Nokia at about the same time. Consider:
The parallelism of this synchronized failure can be seen in the following graph showing smartphone volumes. Continue reading “Competing with a Mac”
Horace discusses AirShow NYC and his appearance on Bloomberg Surveillance, plus opening weekend sales of 9 million iPhone 5s/c units. We look ahead to what else Apple may have in store through sustaining and disruptive innovation.
My thanks to Tania Chen for organizing my appearance on Bloomberg Surveillance in New York on September 26th.
Is Apple Really Dominating the Tablet Wars?: Video – Bloomberg.
Although there isn’t much one can cover in 5 minutes, there were some good questions around tablets. The role of Amazon and Microsoft in particular.
The most interesting juxtaposition in market data happened this week.
Apple announced 9 million units of the iPhone 5s/c sold in their opening weekend while BlackBerry recognized 3.7 million smartphones sold in the three months ended August 31.
I will state these data points with a different emphasis: while Apple explicitly reported, both in a press release and in an SEC filing, Sales of 9 million units, BlackBerry reported recognition of revenues on 3.7 million units. At the same time BlackBerry also reported sales to end users of 5.9 million units.
So, did Apple sell 9 million iPhones in three days? What about units ordered and not delivered? Which of these units will show up in the company’s income statement? Conversely, did BlackBerry sell 3.7 million or did it sell 5.9 million smartphones in three months?
The answer is dependent on what constitutes a sale. I suggest re-reading the Sold and Shipped: A Brief Introduction post from last year. Understanding is complicated by many factors, not least of which could be intentional signaling by management. We may never come to a perfectly matched comparison of the two companies’ situations but our job as analysts is to see through the signals and obfuscating language and interpret a pattern. A pattern that extends over a time and helps us learn.
My observation is one of contrast. The juxtaposition this time is that Apple emphasized sold and not shipped while BlackBerry sold more units to end users than it recognized revenue. These signals reflect precisely the inverted fortunes of the two companies.
For BlackBerry the higher sold than shipped recognition was due to a product launch failure. Units which were shipped (and recognized as revenue) last quarter did not sell and the company is not only writing off the inventory but has drastically reduced its deliveries of new units in order to drain inventory. The company explains:
During the second quarter the company recognized hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers. During the quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in the channel.
The company is essentially saying that due to the unusual circumstances of a product launch failure, they will change how they account for their business. They don’t have the confidence that units shipped will actually sell and will not recognize them since they fear they will have to write some off. They are signaling: They are being far more conservative, not reporting shipments alone because those shipments could essentially be value free.
When seen as a pattern, the new figure on recognized revenue units needs to be shown relative to the history of recognized revenue units. Continue reading “The figurative sales of iPhones and BlackBerries”
Apple today announced it has sold nine million new iPhone 5s and iPhone 5c models in the first three days after their launch. This performance is illustrated in the following graph:
Note that the data is normalized to units/day.
The launch countries this year differed from last year in that they include all of China whereas last year only Hong Kong was included.1
The absolute number of 5x devices sold (not just shipped) seems to be an 80% increase from the 5 launch (9 million vs. 5) but accounting for China the increase is a more modest 29%. ((The China launch event last year may have had a different dynamic as it occurred later and nearer to holiday season, but I’ll go with the unqualified data.))
However, perhaps the more relevant comparison is between different “S” generations of phones.
The data shows that the 3GS was 3x more rapidly purchased on launch than the original iPhone. The 4S was 4x more rapidly purchased on launch than the 3GS and now the latest 5s/c are 2.3x more rapidly purchased than the 4S.
The growth is certainly lower but from a much higher base. This should not be surprising.
UPDATE: Galaxy S 4 launch data is updated to show weekend performance. Previous graph showed performance over the first 27 days.
My thanks to Niaz Uddin for asking some good questions and posting my replies:
Horace Dediu on Asymco, Apple and Future of Computing | eTalks.
Full interview is here, excerpts below:
Niaz: Why do you study Apple?
Horace: Apple is an interesting company to study because its success comes from being a serial disruptor. This is a very rare type of success formula. I am trying to “reverse engineer” its operating model and I hope that such a model is one which others might learn from if they were to emulate it. The trouble is that very few others seem to want to emulate Apple. Why that is is also an interesting question.
Niaz: […] Do you think apple has lost its image that it has created over the years as a center of innovation and building excellent products?
Horace: I cannot comment on how Apple’s image is measured by people in the industry. I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern. The company has always been perceived as a failure by a majority of observers. With respect to its products, I also do not see a change in the pattern established over the last decade.
Niaz: Are you optimist about the future success of Apple? Like after 10 years and then 20 years?
Horace: Let me put it this way: if there were no Apple then somebody will have to invent an Apple to do the same thing Apple does. In that sense I’m optimistic that there will be an Apple in some way in perpetuity.
Niaz: What will be the next big innovation from Apple?
Horace: I have no idea but it’s likely to involve refining new user interaction methods. Similar to the breakthroughs that came from the use of a mouse, a scroll wheel and a touch screen. It means making computers better at gleaning our intentions without our getting involved in explaining them.
Niaz: Will Apple, Google and Samsung be the major player for the future of computing? Or we can hope to see some new faces?
Horace: I am fairly sure Samsung will not be because they have not yet grafted software and services to their operating structure. I would give Amazon a higher probability in being a successful platform alternative.
Niaz: In 2011 you’ve written a blog post ‘Steve Jobs’ Ultimate Lesson for Companies’ on Harvard Business Review Blog and you have cited ‘A leader should aspire to do more. A leader should claim to have left a legacy not just on their company but on all companies.’ As you know Google, Amazon, Samsung, Facebook … all have learnt lifetime lessons from Steve Jobs. What do you think about the impact that Steve Jobs have created?
Horace: He led by example and like all great leaders sacrificed much as a way to inspire others to follow him. He also spent time in the wilderness and chose asceticism. This gave him authority. Many historical figures had the same quality. The problem is that few business leaders have it but I don’t see why they shouldn’t.
Much more on evaluating Tim Cook’s performance, the iPhone portfolio, the rise of Android, Microsoft/Nokia, wearable technology and disrupting Google. Check it out on eTalks.
