In Smartphone Wars news we expected a great quarter by Apple but the iPhone and iPad sales simply blown everyone away including just about all analysts. The company reported 37M unit sales of iPhones. This is up 116% from Q3 more than doubling sales in just 3 months. The unit sales are up 128% from a year ago. iPhone market share has hit about 25% for the fourth quarter 2011 (obviously we don’t know exact market share until all companies have reported and we have a full market size, but that is pretty surely within one percentage point either way). This is up from 15% market share three months ago. The company without any doubt, had a humongous quarter.
2011 in Numbers for Apple Reveals Records
What about the full year, 2011 Anno Domini? The iPhone hit 93.1M units sold. That number means a preliminary market share of 20% for the full year 2011. All this while selling the most expensive line of smartphones in the world, and making by far the biggest profits of the industry. Clear perfect quarter for Apple, total perfection.
In the Bloodbath battle it was already certain that Apple was the finalist for top honors both for the Quarter and the Full Year title. Nokia was out of it, the only contender the iPhone now faces is the series of smartphones from Samsung. We now know the numbers. Samsung would need to do 37.1M units of sales in 4Q 2011 obviously to pass Apple and retain its title as the biggest smartphone seller for the quarter – a tall order, since Samsung grew by 40% from second to third quarter 2011.
Now in light of this massive iPhone 4S quarter, Samsung would have had to increase its growth rate to 48% to achieve that level. And for the full year, the magic number is 37.7M for Samsung, any number lower than that, and Apple will get the annual crown as the first company ever with a name other than Nokia, to be crowned as the biggest smartphone maker in the world. Samsung numbers will come out in a week so now we wait.
Yes, I was Wrong
Remember that argument I made in 2010 that iPhone sales in market share had peaked on an annual level? Obviously I was found wrong this time last year as the iPhone did grow one percent in market share between 2009 and 2010. But just like I wrote with the analysis of the Nokia collapse, that helped Apple resume strong growth and we have seen it now.
Much of this growth for Apple in 2011 was due to the voluntary collapse of its strongest global competitor who just in 2010 sold more than twice as many smartphones as Apple in total. This is not sour grapes, but rather logic of business dynamics. Apple had to take advantage of the Nokia collapse opportunity. Some of the rivals in smartphones managed that – like Samsung and Apple – others utterly failed to do that like Blackberry and Motorola. So this is also congratulations for Apple for being nimble enough to be able to capitalize when the biggest company in the industry suddenly stumbles and loses more than half of its market in less than a year.
One more note about Apple and the current calendar quarter (1Q calendar quarter i.e. January-March quarter, which is second fiscal quarter for Apple). The company established a good China quarter pattern after Christmas sales. It surprised every analyst in 2010 (including me) and in 2011 it still caught out many who reviewed Apple. The pattern for most industries is that after-Christmas sales in 1Q fall from the peak in 4Q. With Apple having strong China sales, especially with the iPhone, Apple has produced slight growth from 4Q to 1Q, so be prepared for that.
However, this year 2012 we have two factors that may suppress the iPhone number for the current quarter – first, the Chinese New Year came really early this year on 23rd of January (i.e. the Gift-giving season, sometimes Chinese New Year comes well into February). Secondly, the iPhone 4S was not released for China until early January, and then it had that famous disaster in sales in its flagship stores, which closed for several days due to the riots.
Thus Apple had less time to sell the 4S and even out of that, Apple kept some of its stores closed. We might see a slight dip in iPhone sales for the current quarter rather than the usual growth from the Western Holidays quarter.