Mobile: iPhone Market Structure
- Apple iPhone Market Stats
- Apple unit sales are stagnant
- New iPhone sales per year declining
- Number of Active Users ~700m
- Global Apple market shares slowly declining as Prices hit $800-$1100
- Apple users are HIGHLY geographically concentrated
- USER POV
- iOS App Developer POV
- iPhone 11 = iCamera killed the Camcorder
- Audio is old hat - Music Subscriptions and Streaming killing per song buys
- Emerging Uses: AR - still not mainstream
- Services Focus - recurring consumer demand
- We make you Healthier
- Apple appeals to Teens, Women and Moms
- Screen Time for Phone and less OCD
- No audio plug => Millions of Air Buds sold!
- Smart Watches add onto revenue of iPhones
Apple iPhone Market Stats
Apple unit sales are stagnant
- Now Apple releases only installed base - counting on people to upgrade in 1,2 or 3 years.
Its pricing policy is similar using older versions and refurbished to hang onto user base or incite new users at lower price points.
Apple has sold 1.38 billion iPhones since 2007 launch.
- As of Jan 2019, Apple claimed 1.4b active Apple devices including 900m iPhones, about 450m iPads, and 100m Macs (don't run iOS apps but share the Swift language), a few million Apple TVs (little programming done), iPods (purely music store).
- Estimated at 1 Billion Apple users taking into account multiple HUGE overlap - many users would have two or more iPhones, iPads or iMacs.
There may be hundred million+ Apple Watches but we don't consider them independent devices.
Apple claims number of iPhones in active use as 900m and grew 9% yoy as of Jan 2019 but this can be questioned.
- Google claimed 2 b active monthly devices running Android in 2017 but my be nearly 2.5b-3b by early 2020. However it seems Android smartphones are already stagnation, as future buyers seem to have a hard time affording a mobile phone plan or only want a phone/SMS or feature phone.
* # means Units in millions IN USE - data as of 2017
New iPhone sales per year declining
- Clearly a very depressing graph is shown below. Note this is an estimate by an analyst at Avalon - "purchasing their first new iPhone directly from Apple or a third-party retailer .. as a rough proxy for the number of people entering Apple’s ecosystem". - SRC Avalon estimate
Number of Active Users ~700m
- But for a VERY long time (since mid 2015) total number of users eg in the USA have been very stagnant already:-
[We] believe the 715m iPhones currently in use worldwide including 228 m second-hand iPhones that consumers bought used in Dec 2016. .. In 2012 15% had 2yr+ old iPhones, but rising steadily, by Jun 2018 it could reach 35%. - BMO Capital Markets analyst Tim Long
- [2018 data Apple Recorded More Than Half of Total Smartphone Industry Revenue in iPhone X Launch Quarter - MacRumors](https://www.macrumors.com/2018/02/15/apple-51-percent-smartphone-revenue-4q17/) - [2017 data](https://www.macrumors.com/2017/04/20/iphone-ownership-all-time-high-us/)
Global Apple market shares slowly declining as Prices hit $800-$1100
- Apple has much higher ASPs, and Even more profitable ie better Gross margins
- Apple makes less variety of device per year, helping make it more profitable.
Apple users are HIGHLY geographically concentrated
U.S. is Apple’s stronghold
Apple is still strong in China, but losing that on "national sentiment" to Huawei
Japan and France love sexy iPhones
Other major markets are UK and Australia.
Europe is heavily Android, so also is S. Korea which is home to Samsung.
iOS App Developer POV
- There are 1m+ (??) Apps on App stores.
500+ m people visit the App Store weekly
Apple takes 30% of app revenues at the top
Apple paid $26.5 billion to iOS developers in 2018, but $86b+ since July 2008.
Subscriptions with online presence SOMETIMES escape Spotify and Hulu
Paypal does NOT pay Apple as it pops up a web view for completing the transaction and does not use Apple Store payment or services
Users update OS very fast - unlike Android which lags
- 81% of iOS users have installed the latest software version on their device.
iPhone 11 = iCamera killed the Camcorder
- Main Selling point for $1000+ phones = Large displays Photos + Storage
- A trillion photos are taken each year on iOS devices.
Apple may not have the very best pure hardware camera but it improves its iSight camera with each new generation of mobile devices. Overall with its software however, average Joes are able to make "idiot-proof" high quality photos and videos with its native camera.
- See features
Audio is old hat - Music Subscriptions and Streaming killing per song buys
- Audio Podcasts? iPhone killed the iPod killed Sony Walkman Siri completes 10 billion audio requests every month. Apple Podcasts hit 50 billion episode streams and downloads.
Emerging Uses: AR - still not mainstream
Apple ARKit, an augmented reality (AR) kit that launched this year, is used on 2,000 apps. ARKit 2 will be a part of the iOS 12 update. Version 2 of the app will allow users to
This means multiple users can use AR apps at the same time (i.e. multiplayer games).
Real world objects Detection
This will be detectable in 3D and incorporated into the AR experience.
AR experiences persist between sessions
This allows users to save progress for games, projects, etc. without having to start over when they resume.
Services Focus - recurring consumer demand
- Apple Pay - activated on 380m iPhones globally as of Q1'19 - SRC
We make you Healthier
Apple appeals to Teens, Women and Moms
Teens Apple appeals to 83% Teens in popularity
Screen Time for Phone and less OCD
A is a suite of features are meant to “help customers understand and take control of the time they spend interacting with their iOS devices.”
- Screen Time will let users know how long they look at their iPhone daily and by individual apps.
2 Activity Reports summarize and analyze
App Limits tool to limit screen time
Do Not Disturb settings have become smarter
Notification Center settings updated
Google announced a similar product called "Digital Wellbeing."
No audio plug => Millions of Air Buds sold!
Smart Watches add onto revenue of iPhones
Apple sold more watches (8 million) than the entire Swiss watch industry in Q4 2017. They are also pretty higher end. Also high growth over 50% growth in revenue and units for the fourth quarter in a row.
Apple sold more watches than the entire Swiss watch industry combined even though famous brands like old-school watches like Rolex, Omega SA, and Swatch have been around forever.