The iHype continues this morning, with the world’s press breathlessly repeating the Apple PR saying the company sold 1 million iPhones over the weekend. That’s a decent number, and eclipses by far the first-gen model, which El Jobso is keen to remind us took 74 days to hit that model. Of course, selling the new model in 21 countries versus a single-country launch will help. But back to the press reaction: A blog at Barron’s says that shares in Palm, Research in Motion, Nokia and Motorola are “Suffering an iPhone Headache”, as “Clearly, some or all of those companies are going to lose market share as Apple takes an increasingly large slice of the market.”
Just to let reality back in for a second:
- Total Q1 handset sales: 282 million (from Strategy Analytics)
- Nokia Q1 sales: 115.5 million (from Nokia PR), or roughly 1.28 million per day
Sure, Apple’s market share is growing, but “increasingly large” might be getting a little ahead of ourselves.
One thing that is worth noting, though, is that people downloaded more than 10 million apps from the new App Store over the weekend (though keep in mind this isn’t just iPhone 3G users, but first-gen and iPod touch users, too). It’s amazing what people will do when things are easy, isn’t it?
I am curious, though, to see how this works out for developers, and some sort of breakdown of free vs paid downloads. Apple says that a quarter of the App Store’s 800+ programs are free, while 90 percent cost less than $10. While the App Store simplifies discovery, download and installation, it’s not yet clear if this translates into an easier or better revenue stream for mobile developers.
[...] Longino takes some issue with Apple’s recent PR trumpeting 1 million handsets sold in a weekend: “Just to let reality back in for a second: - [...]
Credit where credit is due - Apple sold ONE device and is eating up the shares of others with it. Nokia, Sony Ericsson, Samsung etc all have many devices trying to gain share.
Put the iPhone 3G against any other handset to put a real perspective into how it compares anything else. I.e. vs N95, Samsung Instinct? That would be interesting to see.
I would be interesting to see the stats on the number of new (fresh) buyers for the 3G iphone v’s the apple diehard fans that upgraded their existing 2.5 G handset. An uneducated guess of 50%??? Here in the UK, O2 was offering some attractive deals for customers to upgrade their existing iphones to the 3G version.
These numbers are extremely impressive when you stay within the device’s category - smartphones.
Global smartphone sales total in Q1 2008 = 32.2 million.
North American smartphone sales in Q1 2008 = 7.3 million.
We’re talking about 1 million smartphones sold in a weekend. That’s extremely impressive.
Adonis — Not sure why the fact that they have a single device really matters. It’s fallacious to think that if they had 10 models, they’d have 10x the sales. The fact remains that in terms of sales, Apple is a niche player, and other platforms/vendors well outpace it in terms of market share in every level, except perhaps hype and press. Is the iPhone a good device? Sure. Is it a disruptive force in the market? Sure. But in terms of numbers, has the press overhyped its importance? Yes.
Roon — agreed, that would be nice to know as well.
Adam — Do you want to segment the market into any smaller chunks to pump up iPhone sales any more? The smartphone distinction is pretty irrelevant, given the limitations of the iPhone platform that make it closer to a featurephone than devices using other smartphone platforms.
1 million devices in a weekend is certainly an impressive launch. But the fact remains that 1 million devices in a sea of a few billion users, or 300-odd million handsets a quarter, isn’t much. Apple’s market share is growing (from a tiny base) — but it’s got a hell of a long way to go before somebody can honestly start calling its share large. And, let’s see what kind of momentum Apple can muster over the balance of the quarter and the year.
Let’s compare Apple’s to Apple’s, shall we? According to Gartner, worldwide smartphone sales in 1Q 2008 totaled 32.2 million units, which would put the average daily sales of higher-end phones at roughly 358,000 units.
Or in other words, Apple sold — singlehandedly, and per day — almost as many smartphones over this weekend as all of the other manufacturer’s combined.
Plus, if Apple meets its numbers of selling 10 million phones in 2008, they’ll have gained roughly 10% of the entire worldwide smartphone market. Which, ignoring the low-end “free” handsets sold by Nokia and others, also just happens to be be the most profitable end of the market.
See: http://www.iSights.org/2008/07/iphone-3g-sales.html
“Do you want to segment the market into any smaller chunks to pump up iPhone sales any more? The smartphone distinction is pretty irrelevant…”
And it’s definitely not a disposable “free” handset, so why not compare Apple’s to Apple’s? Besides, Steve calls it a smartphone, Gartner calls it a smartphone, and Nokia and RIM acknowledge it’s a smartphone and playing in their sandbox.
Why argue with the experts?
“Plus, if Apple meets its numbers of selling 10 million phones in 2008, they’ll have gained roughly 10% of the entire worldwide smartphone market.”
Which will equal roughly 1% of the overall mobile handset market. Thanks for proving my point.
“Which will equal roughly 1% of the overall mobile handset market. Thanks for proving my point.”
which will equal roughly 0.000000001% of the overall electrical equipment market. What is the point?
I guess RIM, Palm feel themselves very comfortable by the fact that Nokia sells millions of cheap 3110. And the Symbian buyout only costed a few hundred million euro for Nokia, the S60 development also a few hundred million, so it’s absolutely no problem if Apple sells a million iPhone in 2 day, right? Headache? Noooo!
Some interesting commentary from the Guardian here, in what Apple counts as a sale:
http://blogs.guardian.co.uk/technology/2008/07/15/fortune_and_piper_jaffray_wonder_about_apples_definition_of_sold.html
So, what Apple is saying is not that there are a million new iPhones in the hands of consumers, but they’ve doled out a million to various operators around the world many of which may still be sitting around waiting for someone to order it.
[...] Carlo Longino commented on Apple’s hype around selling 1 million iPhones over a weekend: “Just to let reality back in for a second… Nokia Q1 sales: 115.5 million (from Nokia PR), or roughly 1.28 million per day.” [...]
“Which will equal roughly 1% of the overall mobile handset market.”
And BMW only has about 1% of the overall worldwide automotive market. Mercedes only 0.3%. But in either case that’s out of the TOP 2% of the entire automotive market in terms of price and profitability. And like Apple, both automakers have a visibility and desirability and impact that far, far outweighs their market share.
Just like with computers, Apple is staking out the high-end of the mobile phone/smartphone market and letting everyone else fight it out over the pennies and nickels and dimes at the other end of the scale.
Or do you find the concept of totally dominating the high end of the market to be “pointless”?
I think there’s a bit more to the equation than simply dividing X by Y…
Bangladesh added 1.66 million mobile phone subscribers in June 2008 alone. People there pretty much use nokia phones as far I am concerned and minimum cost of a nokia phone is about US$50 each.
[...] of any other meaningful iPhone-related news, some are trying to convince us that it’s not. Carlo Longino’s “analysis”, also quoted by Techdirt and in turn by Gizmodo brings some numbers to the plate but forgets a [...]
Again, Michael, you concede that the Apple hype (or “visibility and desirability and impact”, as you call it) far outweighs market share. If you go back to my original post, you’ll see that’s the point I was making, that Apple’s share of the mobile handset market remains tiny, so thanks for illustrating it again. For all the media hype, all the fanboy loss of perspective, the overall share remains small, and to call it “increasingly large” is disingenuous.
You’re the one that wants to cast it in relation to smartphones to make it look bigger. You’re the one bringing in this talk of profitability and price (as an aside, do you have any actual data on iPhone margins, or are you just making it up as you go along?).
It’s great that Apple’s sold so many devices and made so many people happy. But let’s not disregard the 99+% of people worldwide who don’t have iPhones, and act as if they’re invisible. Wouldn’t things be much more interesting if Apple did something to better target that chunk of the market? Then they’d be able to offer a huge market to developers, rather than the niche that’s currently on offer.
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