Print 86 comment(s) - last by sleepeeg3.. on Feb 2 at 6:03 PM

  (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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RE: Just goes to show
By Solandri on 1/26/2012 4:15:34 PM , Rating: 5
Thing is, probably 80%-90% of the population are "sheepole". You can disparage them all you want, but the bottom line is they pretty much are the market. The average time a car is owned is 5-6 years. Do cars really wear out that quickly? No, people just want an upgrade or a change of pace. After a certain amount of functional requirements are met, form trumps function.

I may disagree with Apple's policies, but they do a fantastic job designing tech toys that are accessible for the majority of the population. I think a lot of people critical of Apple fall into the mindset that "Apple is evil, therefore everything they do must be bad". They may be evil, but they do user interfaces and ease of use really, really well.

If you want to beat Apple, you won't do it by criticizing them for their policies. You'll have to design products which are just as or even easier for regular people to use. I've used custom ROMs for Android which blow away the default ROM distributed by my carrier, and left my iPhone-owning friends feeling their phone sucks. But the process of installing a custom ROM is so convoluted that it's only within reach of 1% of the population. If your weakest link is that weak, then you've lost the fight before it's even begun. (This is the biggest issue I have with open source software - OSS developers concentrate on coding the stuff they want to code. They hate coding stuff that bores them, even if it's important to 90% of the users. With paid software, money provides an incentive for developers to work on the boring parts to make those 90% of users happy.)

The average Apple buyer isn't drinking the kool-aid. They just want something they can easily pick up and learn to use. And they're willing to pay extra money for it. Apparently a lot of extra money. If you fail to see this, and try to compete with Apple purely on the grounds where you see them being weak - moral and technical merits - you will never win. To beat a competitor, you have to beat them where they are strongest. Beating them where they are weakest only works if you can first match their strength.

RE: Just goes to show
By Reclaimer77 on 1/26/2012 4:34:52 PM , Rating: 1
If you want to beat Apple, you won't do it by criticizing them for their policies. You'll have to design products which are just as or even easier for regular people to use.

No, that's not the way to beat them at all. Then you're just playing their game.

Apple assumes everyone is an idiot that can't determine the value of something unless it's spelled out for them. That didn't work in the PC market, although they enjoyed brief early success. Smartphones are really only a 4 year old market. Apple is riding high now, but that's only now. When has Apple EVER shown they know how to be a sustained market leader?

All you have to do to beat Apple is give them enough rope, they'll hang themselves. They always do. When the smartphone market evolves to the point that they become, literally in every sense, mobile PC's - Apple will still be making the child-like "easy to use" version.

Come on let's be real here. Who really believes this juggernaut can continue with Cook steering the ship?

RE: Just goes to show
By ltcommanderdata on 1/26/2012 4:46:38 PM , Rating: 1
When has Apple EVER shown they know how to be a sustained market leader?

The MP3 player market? The music sales market? These markets would probably be very relevant experience for the smartphone/tablet and associated content distribution markets.

RE: Just goes to show
By TheDoc9 on 1/26/12, Rating: -1
RE: Just goes to show
By FITCamaro on 1/26/2012 5:06:13 PM , Rating: 3
I would argue most cannot afford their gadgets and instead buy them anyway on credit because having the latest tech toy is more important than being financially responsible.

There are cheaper, many times better, alternatives to Apple's products. But they sell because "its what all the cool kids have".

RE: Just goes to show
By ballist1x on 1/27/12, Rating: 0
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs

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