In a few short weeks, the iPhone 5 should be upon us. One of the interesting metrics that has been talked about of the iPhone is how all new models effectively outsell the cumulative total of prior models. For example, the iPhone 4 sold more than the total of all original iPhone, 3G, and 3G models.
So far the iPhone 4S has not yet reached this goal, but it will by the time next quarter’s results are reported. By my estimate, after 3 quarters of sales, Apple has sold about 83 million of the iPhone 4S compared to 88 million of the iPhone 4.
Here’s a chart showing how many of each iPhone model Apple has sold to date. The totals add up to Apple’s reported numbers, but the splits are based on an educated guess. My assumption is that when a new model is released, the vast majority of shipments are for the new model. Not really rocket science.
So the obvious question is, “Will the iPhone 5 ship more than all cumulative shipments of older models?” But the obvious question isn't always the right one.
First of all, it’s a moving target since older models continue to sell. Second, each new model of the iPhone is facing a larger cumulative base of sales that it has to compete with to establish this record. Third, we need to remember that it’s easy to beat prior shipment records when a product is newer, and very difficult once a product matures.
As an investor in Apple, I don’t really place a lot of importance on how many new models ship versus old models. I just want to see rising sales and steady profit margins. I care about total iPhone sales growing each year. I realize that it’s impossible for Apple to continuously release a new model that outsells all prior shipments of older models. Expecting this is akin to expecting a sprinter to continue to accelerate while racing up a slope that keeps getting steeper.
So let’s take a look at iPhone shipments by quarter. Here’s a chart that goes back to the initial introduction of the iPhone. I’ve thrown in iPad shipments as a second series on the chart just for the sake of interest and comparison.
You can see the huge spike in iPhone volume when the 4S was released. Part of this can be explained by the growing market of people who want an iPhone. But another contributing factor was the long (5 quarter) period of time that the iPhone 4 carried the torch. Anticipation for the next model was hot, and as a result, we saw a massive step change in volume when the 4S was finally released.
When the iPhone 5 comes out, we’ll have only seen 3 quarters where the prior model (the 4S) was the top of the line Apple phone. It seems natural that this would result in a less dramatic uptick in sales in the December quarter, right? Maybe. But when we consider that the demand for iPhones is still growing rapidly and globally, maybe not.
Let’s look at analyst estimates. I don’t have any Wall Street analyst models showing a forecast breakdown of iPhones specifically, so I’ll just consider revenue estimates. These are easily seen at Yahoo Finance.
For the December quarter, analysts expect Apple to generate $54.9 billion in revenue. This compares to the prior record (last year’s iPhone 4S holiday quarter) of $46.3 billion. That’s expected year-over-year growth of only 18%.
I wouldn’t be surprised in the least if Apple shatters the December quarter estimate. Their products are still the best in the world, China is on fire, and it looks like iPad volumes are growing like crazy, which just makes the 18% growth expectation seem like less of a hurdle.
It sure looks like Apple customers and investors are in for a hugely interesting fall of 2012. iPhone 5 in September, iPad mini in October, and hopefully an update from Apple on the number of devices sold at launch, and then quarterly results.
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Former sell side analyst, out-of-box thinker, consultant, entrepreneur. Interests: Wife & kids, tech, NLP, fitness, travel, investing, 4HWW.
I don't think so if really no NFC!!!!
Tell me something, how pervasive is NFC on the market? Which store uses this kind of payment? Not a lot of them do... NFC is still in its infacy regarding payment systems... no NFS in the next iPhone is actually a great decision by Apple...
So you think like it was good idea to don't include LTE in iphone 4s because it wasn't common that time so the same with NFC?? I agree with you then ;)
Doesn't matter because NFC is only used in 13 stores with a few piloting them to this day. So NFC isnt really important. I can think of twenty other things I'd rather see in the new iPhone than NFC.
For example, the iPhone 4 sold more than the total of all original iPhone, 3G, and 3G models. I think that you meant to put 2G there mate
Actually he meant to put 3GS there buddy . The first iphone was the 2G but was just called iPhone. Then 3G and then 3GS ;)
I think IF they do manage to do it with the new iPhone, it would be the last time they would be able to do it.
I dont think in a year or two when the next gen iPhone comes out, they will sell more than the total of 6 generations of iPhones combined.
"China's on fire" for who? It's already been reported that the iPhone 4S sales were down in China, and the iPhone 4S didn't exactly set the world on fire like the iPhone 4 did, so let's put the Koolaid cup down and rethink the trance we're in? Considering that all of the four major US carriers have done away with annual upgrades, how many of us who got iPhone 4S last year will be chomping at the bits to get an iPhone 4G with LTE, Siri enhancements, Apple Maps, A smaller doc connector, and a slightly larger screen? My guess is, not as many as bought the iPhone 4S, but we'll have to wait and see on that, won't we?
I agree with most your points, except I think they will sell more of the next iPhone than 4S. This is the phone that people have been wanting for over a year. 4S was disappointing to many , even Apple koolaid drinkers. This is the phone that will be their last best-seller for a long time to come. I honestly think that WinMobile 8 will be a huge seller and eventually most people will realize that Apple NEEDS TO CHANGE THE UI and they cant survive in this business with a 7 year old UI !
I think it will top 100 million by this time next year due to LTE and the bigger screen. Next year apple will have to make great strides with iOs 7, blow people away. Not only because 7 is a magical number but because the competition from android is going to be extremely fierce.
They'll blow people away by maybe adding a LED to the phone. And it will be a magical Apple invention. Too bad no one thought of it first.
Yeah I'm sure that's the first thing on people's list when asked what they want on the new phone. See I can be an ass too.
I think Apple has enough iPhone momentum to sell a heck of a lot of iPhones starting here in September. But sooner than later they need to re-stoke the passion in buyers. Their iPhone momentum is slowing, even among core Apple fans like myself, and patent lawsuits aren't going to slow down the competition enough to make a difference.
The smartphone market as a whole is maturing...
Personally I'm a little concerned at the leaks we've seen of the new iPhone. I was hoping for a total re-design in look and feel from the 4 and 4S, but it looks like just a longer, thinner version. Same stainless borders, perfectly flat front and back. If that's the case (pun intended), I will not be moved to buy one.
Come on jim do you really think they are going to go with a slightly improved phone that they designed 2-3 years ago? I doubt it.
It would appear they are bent on trying to continue to set sales records.
By buying back their 4S model in the open market they are engineering a huge front end sales spike of the next model. I've never known any other phone manufacturer do this. http://news.cnet.com/8301-13579_3-57503070-37/apple-buying-iphone-4ses-a...
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