Apple News, apple, Internet, iphone, iPod, News, Software, Technology — January 28, 2014 21:01 — 0 Comments
Apple’s results: nine things we learned about iPods, iPhones and China
Apple shares are down after the company’s figures fell short of expectations. But what else do the quarterly results show?
Apple’s quarterly financial results and earnings call didn’t wow investors. Here is some of the stuff that got left out of the other coverage.
1 Demand for the iPhone 5C was lower than expected
According to the independent Mixpanel system, which collects data about devices as they browse websites, the pricier 5S model outsold the 5C by about 3:1 – with the two combined making about 21% of models in use. (The iPhone 5 dominates at 34.7%; 2011′s iPhone 4S has 25.6%; the iPhone 4, from 2010, is 17%.) That suggests that any “divide and rule” plans Apple had for the cheaper (but not sufficiently cheaper) 5C didn’t work.
Apple’s chief executive, Tim Cook, dodged the question of what Apple will do with the 5C this year, and said there were “significant” numbers who were new to the iPhone who bought the 5C. He hinted – perhaps – at a price cut (given that there was very little price difference between the phones). But Cook admitted that “demand percentage turned out to be different than we thought”.
2 Touch ID could become part of a mobile payment system for real things
This week the Wall Street Journal reported that Apple was considering getting into the mobile payment business, after years in which it has ignored advances such as NFC. Using the Touch ID fingerprint system from the iPhone 5S to pay for real things – it’s already available to buy iTunes content – could get it into mobile payments.
Cook told analysts on Monday that “the mobile payments area in general is one we’ve been intrigued with… You can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it’s a big opportunity on the platform,” he said. Apple has about 600m credit card details in the iTunes Store (one of the 10 largest holders of credit cards online), so it would be a strong competitor in that space.
3 No one’s buying iPods
To a good enough approximation, that is. Ten years after 2004, when iPod sales really took off, they’re now declining rapidly – down 52% year-on-year. As a multiple of the previous year’s sales, iPod sales have been below one (ie declining) for the past 19 quarters.
4 People are buying Macs
Apple sold 4.84m of them, a 19.1% jump compared to a year ago. That’s against a PC market that was down 8.4%. The sale gave Apple a 5.9% share of PC sales, its highest since the third quarter of 1998 (and possibly earlier – our figures only go back that far). For 2013, it sold a total of 17.1m Macs, compared to the total of 315.7m worldwide according to IDC. That’s a 5.4% share. Apple has grown its sales on a year-by-year comparison faster than the rest of the PC market for 30 of the past 31 quarters. (The only dip was a year ago.)
5 iOS7 is now running on 80% of devices
Apple announced this during the earnings call. That agrees with data from Mixpanel, which measures website visitors and shows iOS 7 adoption at 84%, iOS 6 at 13.5% and earlier versions at 2.3%.
More than a billion iOS (iPhone, iPad, iPod Touch) devices have been sold since their launch in mid-2007. Total iPhone users will probably peak in the future at somewhere around 500m worldwide, according to Benedict Evans of Enders Analysis, with 2.5bn-3bn Android phones. iPads could make another 300m.
6 Something new is still coming, honest
Gene Munster, the analyst who has been predicting since some time in the Paleozoic era that Apple will unveil a TV set this year, asked about the future “product categories” that Cook promised him during an earnings call in 2013. Cook replied “Yes. Absolutely. No Change.” Everything is on track. Of course, what those new product categories are – iWatch? iTV? – and when they’ll actually be revealed is a whole other story.
Munster tried to press Cook to talk about the future of the Apple TV set-top box, but Cook gave the boilerplate “we believe in innovation” response. Another analyst asked Cook about future products, and Cook coldly responded with, “We’re working on things you can’t see today.” Then silence.
“We have zero issue coming up with things that we want to do that we think we can disrupt in a major way,” he said. “The challenge is always to focus to the very few that deserve all of our energy.”
7 China is big, and expected to get bigger
“Greater China” made up 15.4% of Apple’s revenues for the quarter (compared to 34.9% for the whole of the Americas). Cook says sales are already growing faster than ever in China thanks to the new China Mobile deal. “Last week was the best week for activations we’ve ever had in China,” said Cook. “It’s been an incredible start. At this moment we’re only selling in 16 cities and that number is projected to be 300 cities by the end of the year.”
8 iPads and iPhones are working their way into big “enterprise” businesses
Cook had lots of numbers here: the iPhone is used in 97% of the Fortune 500, 91% of the Global 500; the iPad is used in 98% of the Fortune 500 and 93% of the Global 500; some of those accounts have thousands of users; and 90% of tablet activations in corporations are iPads. “I think we’ve done a lot of groundwork… and I would expect that it would have more and more payback in the future,” Cook said.
9 iPhone sales grew more slowly than the smartphone market
The 51m shifted in the quarter (only the second company, after Samsung, to ship more than 50m in a quarter) was only 7% up from the same time last year; the overall smartphone market grew by 24.4%, according to IDC. Apple probably won’t care about this; what it wants to do is grow its share of the total mobile phone market, because “mobile phone market” and “smartphone market” are becoming synonymous; around 60% of all phones sold each quarter now are smartphones. (In the UK, the proportion is 84%, according to Kantar ComTech.)
• Apple shares fall despite announcement of record iPhone and iPad sales
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