The quarterly numbers are in for Apple. And once again they’re very good. It was another non-holiday record quarter in terms of revenues and earnings. But the real number that jumps off the page is the iPhone sales. Let’s just say it: The iPhone looks well on its way to being Apple’s primary business.
Last quarter, Apple sold 5.2 million iPhones. That’s a colossal 626 percent growth over the year ago period, when Apple sold 717,000 iPhones. Now, it’s important to note that the iPhone 3G wasn’t released last year until July, while the new iPhone 3GS dropped in June this year. But still, the difference is huge.
And it nearly was the record for iPhones sold in a quarter, which happened in Q4 last year, with almost 6.9 million iPhones sold thanks to the full brunt of the iPhone 3G sales. Again, these new Q3 2009 numbers only include a few weeks of iPhone 3GS sales.
And the 5.2 million number is perhaps even crazier when you consider that it’s exactly double the number of Macs Apple sold last quarter (2.6 million, a modest rise from basically 2.5 million Macs a year ago). And the 5.2 million number means the iPhone is now more than halfway to the sales of the iPod — and its sales are going the wrong way.
Of course, Apple is likely getting ready to drop a new iPod touch in the coming month, which should have a camera. And that will undoubtedly help sales.
Isn’t that “Apples to Oranges”? I mean, the price of an iphone is far less than a new Mac.
Yes, yes, it is.
Does it really matter when the iPhone’s growth rate is 6x year over year?
That year-over-year growth is so misleading, it’s ridiculous. You are comparing the sales iPhone 3G + 3G S to the sales of the original non-3G iPhone, which was close to be discontinued, not to mention it being obsolete.
If you seriously think iPhone sales can keep up this 6x sales growth, I have a bridge to sell you.
Up front, yes. Over the life of the product, no. You must consider the cost of service. On a cheap AT&T plan (Lets say $80 bucks. Mine costs $99, and only comes with 400 minutes) on a 2 year contract, a 16GB 3GS will set you back $2119 ($1,920 for the service + $199 for the phone). A 3G will set you back $100 bucks less, so $2019. Thats before taxes.
2 grand can buy you a Macbook, Macbook Air, Mac Mini, or any MacBook Pro up to the 2.66ghz model.
+1000
Macs are constrained to a 5% market share from the competition.
The iphone still enjoys the virtually complete absense of decent competition (yet). The clock is ticking for that, though, and the competitor is called … i dunno, some other smartphone
The clock maybe ticking. But still there is a long way to go to beat iPhone. We have been saying about Google Killers for a long time now. Has anyone really killed Google? Same way, it will take time to kill the iPhone.
Yeah eventually someone will have an iPhone killer just like when that iPod killer finally came out… Remember that
Doesn’t matter. The upfront cost to buy an iphone is far, far less than the upfront cost you have to layout for a new Mac. And that’s the only thing people think about when purchasing either one. Are you really saying the impulse to laydown the cash for a new iPhone is as equal as the impulse to lay down the case for a new Macbook???
Right, because everyone buys computers with cash*. Credit cards nullify your argument.
* Read: No one buys computers with cash.
It’s psychological. You’re still buying a $2000 computer and you still get hit with that FULL amount on your credit card bill. As opposed to buying a $199 phone. Everyone expects to have a cell phone bill every month.
If you asked 100 people if they’re more willing to drop $199 now for a phone with a month cellular plan they know they’re going to have to pay whether they get the iphone or a nokia versus $2000 for a new Mac. How many of those people are going to choose the Mac over the iPhone?
Put it this way. If people had to pony up for the phone plus 2 years of cellular service upfront and were STILL buying an iPhone 2:1 over a Mac. Then there’d be a story.
“No one buys computers with cash”
That’s the most idiotic thing I have ever read.
I’ve never made a computer purchase on credit, and I always pay in cash*.
* I think that proves you wrong.
well in microsoft commercials they do.
Actually, the most idiotic thing about the credit card statement is that it doesn’t account for the interest the customer will pay on that $2000 they put onto the monthly statement.
Making $80 payments monthly at 15% interest it takes over 2.5 years to pay off your balance, and you end up paying an addition $400.
And to think you spoiled all that awesome math up there by not using yer brainz!
Yep, and there’s no interest on your monthly cellular bill.
Check and mate.
oki know people are stupid, just not that much
@Diablo At the moment Apple are also pushing their interest free (0% interest) 12 month Hire Purchase plan, using Juniper Visa. Check the store homepage.
Product canniblization at its best – the obvious question is:
Why buy an ipod when you can pay a little extra for all the features of an iphone ?
While many consumers undoubtedly only want an ipod, those figures clearly show that many are asking that question and just saying “oh ill spend a bit more and get the iphone”
As apple continues to iterate the iphone more and more – ipod sales will fall.
Greg, that’s a flawed analysis. The cost of the service can’t be included in the equation, as:
1. It would be the same (or just slightly more expensive) if you buy a different phone with a similar plan.
2. The money doesn’t go to Apple, but to the carrier (except for any income-sharing scheme, if they still have those in place – again, marginal).
So to compare “apples with apples”, you should only use the upfront cost, plus the extra monthly cost of having an iphone (say, against a Blackberry or an Android phone plan). That’s not going to be enough to buy a Macbook Air.
Uhm, the profit margins on an iPhone are probably the same or more than on a Mac, now. So, while the retail price on an iPhone is an apples to oranges comparison to a Mac, the profit is not.
Which has nothing to do with the fact that iPhones are selling 2:1 over Macs. The upfront cost to buy one does so it’s not an accurate comparison.
This is the company to watch in my mind. They keep making amazing products, which are on the costly end, yet they continue to sell well. Another record quarter in a recession economy. Good Job Apple.
What exactly does that last phrase mean, that the iPhone’s sales are “going the wrong way”? I don’t know if I’m reading that right, because it doesn’t make any sense to me.
I think the article was refering to the ipod touch. The ipod touch sales are going the wrong way.
I think the article was referring to the ipod touch. The ipod touch sales are going the wrong way.
You are right, it doesn’t make sense. I think he meant that iPod sales are going the wrong way.
This is just a guess, but I think he (and the three other posters above me) are referring to the ipod touch.
Not surprised.
Breaking News; Toyota sells more cars than ferrari.
More like “Ferrari sells more care than Toyota.”
cars*
Edit button please!
eh?
Toyota global sales in ‘08 = 8.9 million
http://burnurl.com/3JJ8eZ
Ferrari global sales in ‘08 = 6500
http://burnurl.com/Kh38Hg
Whoosh!
hehateme was trying to infer that someone the iPhone is a toyota and is a ferrari. What would be interesting is if he posted what that phone is, but he probably won’t because we’d all laugh him out of town.
Nice article. Surely, there would be a jump in sales since the price drop to $99. I can’t wait until Apple and Verizon get something solid enough to release the iPhones with them.
James F.
TwitterBackground.com – Free Twitter backgrounds
Everyone keeps expecting a deal between Apple and Verizon. How is the iphone going to work on the CDMA network? Or do we expect Apple to manufacture a completely new version of the phone just for Verizon since the rest of the world pretty much runs on GSM? Doesn’t make much business sense to me…. I would say don’t hold your breath on that Apple-Verizon marriage: it ain’t happening.
The amazing growth is also because of international sales accounting for 44 percent of the quarter’s revenue. iPhone introduced to a bunch of iPhone virgin markets
Every time I read some of these TC articles, they sound as if there is only the US as a market and relevant benchmark.
Yawn.
The comparison above by Greg regarding AT&T costs… Parochial and provincial in analysis and not really relevant, as mobile contracts globally are often very different than US and nearly half of Apple sales are beyond the borders of the US.
TC really needs to get more writers who are NOT based in the US, regardless of nationality.
Not to mention Greg’s cost comparison between iPhone and Mac… A good percentage of the iPhone costs in his comparison are not going to Apple, but AT&T. The Mac rev all go to Apple.
Not sure the more-iPhones-than-Mac analysis is at all valid, and that the iPhone can be called Apple’s main business.
To simplistic.
The real money is in app and music/video sales. Apple is like a money printing machine. And we’re all benefiting from it.
no it isn’t
Too bad there wasn’t any guidance on the exclusivity of iPhone on AT&T’s network.
oh there were questions. but no real answers beyond the vague niceties.
A Chinese worker of Foxconn committed suicide because he lost a sample version of IPhone he should ship to Apple
Fearing the wrath of Jobs?
the suspected reason why Apple prolly sold more is maybe b/c Jobs had surgery ?
I am in the process of closing a deal for a quantity of unlocked 32GB 3G S iPhones, and let me tell you its not easy as the prices are up and down
What doesn’t it do? The iPhone is everything the PSP wasn’t… I still can’t believe I bought a PSP back in the day…
“Credit cards nullify your argument.”
WTF? Are you insane? Credit card or cash YOU ARE STILL PAYING FOR IT? And we wonder why most Americans are fucking retards when it comes to how to manage their finances.
And for the record..I paid cash for my new iMac and my new iPhone.
Precisely, thank you. You put that $2000 Mac on a credit card and don’t pay it off the next bill, whats interest doing to do to that $2000?
Ridiculous argument.
Not a huge deal that iPhone sold x2 Macs …
Why you ask?
1. Macs aren’t sold in as many countries
2. More people in much of the world need cell phones worse than they need a computer …
Also iPhones are available to people who use Windows.
I’ve got a question, why is it that Apple doesn’t make all networks sell the iPhone like most phones? Surely if all/most networks sell the iPhone they will sell much more, so why don’t they do it????
Man walks into Apple Store and says he wants to buy a computer but a friend told him not to buy a Mac. Apple Genius gives him an iPhone. Hence the name. End of story.
5m units last quarter. That’s nice. Nokia sells 100-130m units a year, but their boss doesn’t make mg wet in his private regions, so we get zero reports on Nokia all year versus 4 drooling apple handjobs by fanboi extraordinaire MG in one fricking day.
MG, maybe you should change your name @MG iSiegler.
Apple and its legion of media entities that feed from it constitute a powerful propaganda machine. The tech media sells page views and clicks with two things: MS bashing and Apple loving.
Actually, Nokia sells over 400 Million phones a year.
What’s the breakdown of those devices sold? How many are “smartphones”?
Nokia probably sold about 20 million smartphones last quarter. That’s about 45% of the smartphone market. Apple would thus have something like 15% of this smartphone market, and Apple does not sell any other type of phone.
Given the huge free publicity apple gets on blogs like techcrunch, given the huge frenzy and buzz that people are doing for apple all the time, I wouldn’t say Apple is dominating anything really.
The smartphone market hasn’t even started to really explode yet, Apple is going to fall off the train pretty soon when there is going to be a dozen differen Android manufacturers providing better prices, better features and more choice.
OK spent 1 minute doing a Google search:
Last month, Nokia smartphone sales were up at 16.9 million, compared with 15.3 million units in Q2 2008
Yes, and how much money did Nokia make, and how much did their profits drop from last year?
Down 66% if your 1 minute Google search doesn’t give you the answer.
And Apple has been in the phone business for what, 2 years and achieved those results? How long has Nokia been at this and how long did it take to get that marketshare?
That’s why Apple has a story.
@KenC: What’s the net income strictly from iPhone sales? What’s the net income strictly from Nokia smartphones sales? Do you have that info? We want to compare oranges to oranges, right?
@Diablo: So are you saying Apple will have 45% global marketshare in 4 years (assuming it got 15% in 2 years)? How long do you think it’ll take Apple to reach that number?
Apple introduced a game-changing device with the iPhone. That allowed them to capture significant marketshare quickly. However, that kind of marketshare growth is unlikely to be sustainable.
I’m not an analyst Intosh. But throwing out the shear number of phones (and all the various models) Nokia sells in a year compared to Apple who has essentially one model is not a fair comparison either (just like the entire premise of this article). The fact that they’ve gotten so far on one model with just two upgrades says something and is the reason why they get so much media coverage.
I think you forget in the argument between Mac v iPhone sales and costs that for your Mac you also need to pony up monthly ISP costs on top of your $2000 whereas with the iPhone the data costs are included up to a level (then you get raped up the date with data costs)
Personally, I thought that one of the more interesting points in the call was when Cook referred to iPod, iPod touch and iPhone as “pocket” products.
To me, this suggests that there is some segmentation/re-classification of their various products planned that is probably timed to the tablet device rollout, something that I blogged about in:
Analysis: Apple June Quarter Earnings Call – Keeping it Real
http://bit.ly/vbi9q
Check it out, if interested.
Mark
So I read one comment saying international iphone sales amount to 44% of the iphone sales, thus 2.9 Million iphones is the actual number of iphone sales in the US.
One year ago, Apple was not selling nearly any iphones internationally at all. International iphone sales started with 3G and increases with 3GS.
So what you are celebrating, is that Apple sells more 3GS in USA on release month compared to iphone v1 in it’s last month before launch of 3G. And then also you are celebrating that Apple figured to sell iphones internationally.
Fact is, sales of the iphone are not really increasing much, if at all. In fact, if you look at iphone 3G launch-month sales in the US and the superior iphone 3GS launch-month sales in the US, I think you will see that iphone sales has gone down in the US.
If Apple was selling all its phones only from its Apple stores, it’d be about 120 iphones sold per day per Apple store on release month of the 3GS.
I have no idea, but I don’t think more than 30% of the iphones sold in the US are sold in the Apple stores in the US, so that would be about 40 iphones sold per day per apple store, during launch month. If the store is opened 9AM till 6PM, that’s “only” about 5 iphones sold per hour in each Apple store in the US. It’s not really huge.
The 2G iPhone sold in the UK and all over Europe, and was introduced in November 2007, 5 months after it was launched in the US in June 2007. So that means whatever point you were trying to make based on US numbers is not right.
The 2G iPhone sold in the UK and all over Europe, and was introduced in November 2007, 5 months after it was launched in the US in June 2007. So that means whatever point you were trying to make based on US numbers is not right.
Iphone 3GS is only selling in 18 countries right now, out of over 80.
I don’t really understand the focus on iPod sales “going the wrong way.” If a customer chooses an iPhone over an iPod it’s surely still win/win for Apple with another customer opting into the iTunes ecosystem. An iPhone is in essence just another iPod with more connectivity, it’s not like its a win for competitors.
I really don’t get the Iphone sales… at $100 per month and almost $3700 for the whole contract term how in the world could anyone afford such extravagance at todays crummy economy? what recession and unemployment… I got to buy some more Apple stocks.