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  (Source: Edible Blog)
iPhone likely seized over a half of all U.S. smartphone sales

AT&T Inc.'s (T) blowout quarter was newsworthy enough, but it dropped a bit of a shocker in its numbers release -- 7.6 million iPhone activated for the quarter, with 9.4 million smartphones sold.  That means the iPhone outsold Android and Windows Phone combined nearly 4-to-1 on America's largest carrier.

(Now some have pointed out that "activated" phones can include third party sales, free phones, etc. and are distrustful of AT&T's assertion that the "majority" of activated iPhones are iPhone 4Ss... in other words they're saying that Verizon and AT&T's iPhone numbers are skewed in Apple's favor.  But a report indicates that 9 out of 10 iPhones purchased are iPhone 4Ss -- and much of the remainder is likely iPhone 4 sales, so this seems like sour grapes. -JM)

Apple, Inc.'s (AAPL) success with iPhone 4S is so startling that it deserves a recap:

The players:
  1. Verizon Wireless
    (joint venture between Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD))
  2. AT&T
  3. Sprint Nextel Corp. (S)
  4. Deutsche Telekom AG's (ETR:DTE) T-Mobile USA
Results (Confirmed: AT&T and Verizon; Pending: Sprint and T-Mobile's, italicized):

iPhone dominates
So, the disclaimer here is that Sprint and T-Mobile did not report their quarterly earnings yet, much less their smartphone sales.  And judging by past earnings reports, Sprint may not give solid numbers for iPhone sales and neither carrier is likely to give concrete estimates of smartphone sales.  But there's no reason, based on past numbers, to expect these carriers to be selling smartphones at a significantly higher per-subscriber percentage than Verizon/AT&T.

Let's say we're horribly off and that the iPhone sold only ~52%.  Recent estimates show Canada's Research in Motion, Ltd. (TSE:RIM) to hold about 6% of U.S. sales, while Microsoft Corp. (MSFT) and others took up about 5 percent of sales.  That would place Android at around 37%.

The odd thing is even the best analyst estimates didn't see this coming.  They predicted a near tie for Apple in the U.S., but did not predict an Apple victory to this extent.

Android and Apple have had a dramatic role reversal.  Ironically this reversal came on a launch that many analysts complained lacked enough new features (the only major upgrade was Siri) to impress buyers.  

iPhone 4S
Analysts thought the iPhone 4S would flop.  How wrong they were.
[Image Source: The Tech Journal]

The iPhone on AT&T was boosted in part due to strong legacy sales -- the iPhone 4 retails for $99 USD with 2-year contract on AT&T, while the iPhone 3GS is free with contract.

Will the mass-market invasion of Android 4.0 Ice Cream Sandwich in H1 2012 stem the rising iPhone tide?  Will Windows Phone finally gain a leg up in the U.S. market? There are plenty of unknowns for the upcoming year, but it is clear that Apple absolutely owned the holiday 2011 U.S. sales.

Source: AT&T



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Your math is wrong
By jnmfox on 1/26/2012 3:19:20 PM , Rating: 5
RE: Your math is wrong
By Reclaimer77 on 1/26/2012 3:22:43 PM , Rating: 5
Ahhh, interesting.

quote:
The iPhone and total smartphone numbers can not be directly compared, however, as the "activations" number AT&T reports for iPhones includes used devices activated on new contracts such as when a user's old device is sold or given away upon upgrading.


That puts things in a whole different light.


RE: Your math is wrong
By jnmfox on 1/26/2012 3:37:48 PM , Rating: 2
Maybe I don’t know my math…

I’m not sure why I would be instantly rated down for pointing out that they authors calculations are flawed based on the fact that AT&T didn’t sell 9.4 million iPhones, they activated 9.4 million iPhones.


RE: Your math is wrong
By jnmfox on 1/26/2012 3:45:20 PM , Rating: 2
Sorry 7.6 million activated


RE: Your math is wrong
By bupkus on 1/26/2012 4:58:49 PM , Rating: 2
quote:
That puts things in a whole different light.
Not for me though. I won't base a purchase decision on its popularity with the masses. I will, however, read reviews and consider the reasons for an item's favored status.


RE: Your math is wrong
By JediJeb on 1/26/2012 5:52:08 PM , Rating: 5
To really know what the market share is doing you have to know not only the number of iPhone activations but also the number of iPhone deactivations. If for every new iPhone activated someone also deactivated an old iPhone then their market share did not change at all, only the hardware got upgraded.


RE: Your math is wrong
By lewisc on 1/27/2012 3:36:59 PM , Rating: 2
That is definitely a good point - knowing whether it's simply iPhone churn, new entrants to the smartphone market or users changing from one smartphone to another would be useful.

It's interesting actually to think about - at the extremes, if these units were all churn, though Apple would not lose anything directly from the deactivation of an old handset, their other revenue streams would not necessarily be materially improved (iTunes use etc). On the other hand, if every unit represented an incremental iPhone customer, that would have a potentially huge impact on other sales - I bet, for example, that a substantial proportion of app purchases and made within the first couple of months of a users 'life' with their new phone.

Whichever way, actual market share, rather than simple new phone purchases / activations, would paint a revealing picture.


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