Latest Apple results show iPhone might have reached its peak last year

Latest Apple results show iPhone might have reached its peak last year
Apple unveiled its usual ‘record-breaking’ quarter yesterday, announcing that it sold 51 million iPhones in the Holiday quarter alone. Those numbers do look impressive, but put them alongside Wall Street’s expectations of 55 million iPhones sold in the past trimester, and the overall growth of the smartphone market, and you’d start to realize why Apple’s shares took an 8% dive right away.

The missed expectations and modest guidance for the following quarter have all contributed. In fact, looking at the numbers for the whole of 2013 (calendar year, not fiscal), you’d see that Apple iPhone sales grew a modest 13%, from 135.8 million in 2012 to 153.4 million in 2013. Why modest? Simple, the industry as a whole grew at a much faster pace, as smartphone s grew their total market share by 48%.

All in all, what we have is that despite Apple’s huge profitability (the company is most profitable among not just all tech companies, but among the world’s global firms in general), it lost a sizeable 5 percentage points of the market in just one year. The observation, coming from ex-Nokia’s Tomi Ahonen, continues with an interesting suggestion that Apple could have actually reached its peak market share in 2012, and is now on the downwards trend.

One year does not make a trend in our opinion, but such a huge nosedive in market share is telling. Apple still controls the U.S. market, but we are seeing that its global piece of the market is far less impressive. Will Apple tumble down to a single-digit market share and remain a ‘luxury’ phone maker, as it has always been with the Mac? Only time will tell.

FEATURED VIDEO

48 Comments

1. WHoyton1

Posts: 1635; Member since: Feb 21, 2013

Dark days for apple....Hope they decline a lot just to see Icahn failing!

2. Commentator

Posts: 3723; Member since: Aug 16, 2011

Yeah, dark days of having by far the highest profits of any tech company in the world...

4. Doakie

Posts: 2478; Member since: May 06, 2009

Microsoft had it's time at the top of the pile. It's just natural that the companies on top will eventually fall down in value. Don't get all huffy and puffy because this is showing the eventual drop in market hold.

12. androiphone20

Posts: 1654; Member since: Jul 10, 2013

Bull! Microsoft has always been late one to the party but makes sure its the last man to come to the party standing!

28. domfonusr

Posts: 1084; Member since: Jan 17, 2014

Regardless of who survives the global market wars, one fact remains: even if Apple shrivels up and dies, their legacy remains imprinted upon most other smartphone designs from their competitors. The iPhone is what caused all others to adapt into the slab-style capacitive-touch modern smartphone style. I have heard the argument that it was, in fact, the LG Prada that did this... I used to make that argument... but that argument is wrong. The Prada was a feature phone, not a smartphone, and the Prada's popularity was debateable at best. It took the iPhone to make that style look good, and then become popular in smartphones. Without the iPhone, Android would have been competing largely against BlackBerry, and we would probably have had a very different Android experience for at least a little while. We would eventually have gotten to today's standards, but it would have been a bit later without the iPhone intervening. In this way, all other devices that are designed in this style carry the legacy of the iPhone with them, wherever they are designed and wherever they go.

36. kryme

Posts: 469; Member since: Oct 24, 2013

under estimating google??? how dare u..lol.... u dont think google had it in them to make android into wat it is today?? cause i can say this for a fact.... android make iphone in to wat it is today... and soon the big screen and the ios will be riding off androids back.... and one day apple might just go open source to gain market shares.... you ppl say android stole this and that.... but apple wasnt the first to come up with a finger print scanner on a phone....they just copied it and make it better and yall dont see no problem with that... so thats wat google did copy an idea and make it better...

44. domfonusr

Posts: 1084; Member since: Jan 17, 2014

Oh yes! There is no denying that it has now gone both ways. However, my point pertained to the past - when iOS was still setting the tone for all others. And yes, Android would not have been what it is today so soon without having the iPhone as a competitor and example. I do not deny that they could have gotten to the same place eventually, but like I said, it just wouldn't have been as soon as today. I get the argument that Apple was never first to do these things, and I am not oversensitive enough to call what Google did "stealing"... but the fact remains that, in many cases, it took Apple to make these developments stick. Now that Google's Android has really taken off, and come into its own, the tables have turned, and Apple is now following in Google's footsteps... but this does not change the past. Apple lead for quite some time before they took a turn at following. Their legacy will live on beyond their successful existence, securing them a prominent place in mobile tech history.

6. WHoyton1

Posts: 1635; Member since: Feb 21, 2013

By dark days i mean with stock falling...i can't see any silver lining to that at all...

7. Commentator

Posts: 3723; Member since: Aug 16, 2011

True, but it seems a bit premature considering that even after that 8% drop Apple is still the most valuable company in the world by a good 34 billion dollars.

8. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Lol not for long, at this rate all it takes is a little panic and then they won't be worth half of what they are. The drop seen after the iPhone 5 was only stabilized because Apple started buying back shares for up to $40 billion dollars worth (due to finish by 2014). That has kept the stock artificially level since the release of the iPhone 5. But even with that, I do not think they can hold off the sell off that is about to happen in the stock. It might be enough to actually help Icahn win his little bid to ruin Apple.

34. kryme

Posts: 469; Member since: Oct 24, 2013

lol u talk about profit.... when their market share hit under 10% they would have to sell their phone for like $5000 to keep up profit.... who gonna buy it then....

40. Commentator

Posts: 3723; Member since: Aug 16, 2011

I don't think you understand the concept of an "expanding market."

35. appleDOESNT.com

Posts: 456; Member since: Nov 19, 2011

You know that just means Apple is charging iFollowers more than anyone else for less, RIGHT???!!! So sad how the consumer ROOTS and CHEERS ON APPLE for highest profit margins at their own expense lolol

43. Commentator

Posts: 3723; Member since: Aug 16, 2011

That's assuming the customer doesn't see enough value in the iPhone to warrant paying extra cash. Nothing's black-and-white in this situation. If that were the case, every profitable company in the world would be screwing the customer.

3. Doakie

Posts: 2478; Member since: May 06, 2009

This isn't Steve Jobs Apple anymore. This is Tim Cooks Apple one where they don't find it below themselves following consumer desires to increase their standings. They'll follow Android up in screen size which will help their US market share. The one thing that can play against them is if AT&T really is intent on killing off subsidies everyone will be forced to look at the price difference between Apple and other devices. So having a significant difference in price between Samsung's phablet and Apples phablet could slow their recovery.

9. Finalflash

Posts: 4063; Member since: Jul 23, 2013

During Steve Jobs' days they didn't have to answer consumer whim because they were largely on top of everyone one else in regards to performance and actual product. Now they are far and behind everyone else and they can only add what consumers want because most consumers do not want what they currently offer. They will try to follow Android and we shall see how well they climb that mountain.

38. gallitoking

Posts: 4721; Member since: May 17, 2011

You clearly don't know what you are talking about.. 51 million iphone devices sold in a quarter, more than LG, HTC and others not named Samsung combined... but nice try...

5. Kishin

Posts: 706; Member since: May 30, 2013

Please 4+'' for iPhone 6

37. kryme

Posts: 469; Member since: Oct 24, 2013

are they gonna do bigger screen so they can fit more icons on there or they gonna keep the same number of icon and make them bigger... cause an extra row of icons wont cut it in 2014....

10. grahaman27

Posts: 364; Member since: Apr 05, 2013

No, this is BS. this is more due to the FLOOD of android phones in the market, doubling shipments every year. Just because apple isn't doubling shipments doesn't mean they have peaked. Show a shipment chart and it will show a different story. BTW, I hate apple.

11. grahaman27

Posts: 364; Member since: Apr 05, 2013

This is a more interesting chart.http://static3.businessinsider.com/image/52e​817056bb3f75e03b4d608-1088-816/iphone-sales-q4-201​3.png

13. Commentator

Posts: 3723; Member since: Aug 16, 2011

The article implies that they've peaked in terms of market-share, which is almost certainly true. It's hard to pick up market-share against dirt-cheap phones like the Moto G and Nokia 520.

15. Scott93274

Posts: 6033; Member since: Aug 06, 2013

Agreed, but Apple doesn't seem like the company that's willing to modify their business plan to release a product to compete with the two examples you provided. Granted they released the iPhone 5c, but the price point on that phone upon release was nowhere near what Motorol and Nokia would offer for their budget devices. I suspect their pride in the quality of their product and dependence on the consumer willing to pay more for their brand will take them down the same path that Sony took where their company was valued at 30% of what it was during the PS2 era.

17. medwar07

Posts: 44; Member since: Oct 18, 2011

I think it has to do with phones that are better than the iPhone like the s4 and note 3... even the one.

39. gallitoking

Posts: 4721; Member since: May 17, 2011

better how?... and show a feature an average consumer would use? that the iphone does not have?...

14. Scott93274

Posts: 6033; Member since: Aug 06, 2013

I believe that Apple's market share is falling, but I would just like to point out that that the numbers reported on Phone arena in the past year in no way reflect anything close to what's being shown on the above chart. That being said, who's to say how accurate any market research firm is. I could have sworn that Apple was reported to have $25%+ of the global market share at some point last year... But anyway, yes, it is painfully obvious that Apple is growing at a significantly lower rate than Android.

16. domfonusr

Posts: 1084; Member since: Jan 17, 2014

This is all in reference to Apple's global market share (15% and declining)... in the US, Apple is still thriving (43% for January/February and still climbing YoY). Besides, Apple could certainly have a successful after-life as a luxury phone maker, and still keep making money hand over fist. They just can't lose, either way they go. To the top of the US market, or to the top of the much smaller luxury market...

18. Scott93274

Posts: 6033; Member since: Aug 06, 2013

Smaller user base = less 3rd party developer support. Less 3rd party support = fewer features, in turn resulting in even smaller user base. It's the same issue with Nintendo's Wii U right now. While they make some of the industry’s most beloved franchises, they're one of the only companies developing for their system right now and they're taking a beating. Though Apple is still far away from where Nintendo is currently at, it’s in their best interest to keep their user base a high as possible.

21. greathero1

Posts: 584; Member since: Jun 13, 2008

Not necessarily. As long as their customer base speak with their wallets and purchase content then developers will continue to flock to iOS because they feel they can make money. This area is Apple's strongest area (ecosystem) in my opinion and why they will continue to thrive for quite sometime.

25. domfonusr

Posts: 1084; Member since: Jan 17, 2014

And this is why a luxury market option is still alright for them. If Apple begins to really disappear from the global scene, then there will always still be people with major money who will want something different, emotionally charged, and exclusive (areas that Apple has convinced a lot of people that they are good at), and a luxury iPhone would likely be a good fit. Of course, when money is abundant, margins can really go sky high in a hurry, and so luxury iPhones would likely go up in price and be designed to appeal to their specialty customers. I can see Apple thriving in such an operation as long as other mobile OS's don't fully unseat them. Then again, Apple will still have an opportunity to stay in the global market as they retool or replace their current OS to adapt to the changing smartphone markets over the next decade or two. The question is: do they have the will to keep fighting for a spot at the global table?

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.