The future of Apple and why not to worry

Explaining Apple in One Graph (That nobody else is showing) – Why no reason to panic, why it all makes sense, and why future also looks great

I am not an Apple analyst. This blog is not a Wall Street or stock market blog. This is not a smartphone blog. This is not even a broader overall mobile handset blog or IT tech blog like PC-related blogs from the West Coast. I am a mobile industry analyst, statistician, forecaster, author and consultant. This blog is a ‘broad’ cover for any tech, media and near future releated topics I’d like to cover, so the blog name Communities Dominate Brands comes from my 4th bestselling tech book from eleven years ago and it was the first business book on what we now call ‘Social Media’ (Facebook, Twitter, YouTube, Instagram etc). So as an example social media is part of the remit of this blog’s wide areas covered. But as I predicted (when nobody else said it) that the sleepy but rapidly growing smartphone market of 2009 was about to go into ‘bloodbath’ from 2010 – as it also happened – the smartphone ‘wars’ had been a highly-read topic here on this blog (we’ve had over 6 million lifetime visits to this blog and still no ads, no registration and we won’t be spamming you). Many of our regular readers are particularly interested in that part and I have been able to provide considerable insights including numerous world-first calls and forecasts such as calling Apple’s iPhone peak, or Nokia’s instant collapse, or that it was Samsung who would replace Nokia as world’s largest smartphone maker (at a time when both Blackberry and iPhone were far bigger than Sammy) or that Xiaomi will not be a Top 3 threat any day soon but Huawei continues to be… I also called exactly the strategy Apple now is doing with the iPhone 5SE – except I wrote it out in 2010 and silly Apple wasted all that time, abandoned market share and uncollected profits by delaying that device until now in 2016. From before the birth of the iPhone, I have consistently been the most accurate iPhone forecaster (as I am the most accurate mobile industry forecaster overall, that is a relatively easy side-merit). But as I said, this is not an Apple blog.

So but now, as there is all this consternation about the doom around Apple and the iPhone, we need a collective major ‘reality check’. I already wrote one quick blog to comment on Apple’s latest quarterly results. But many of my readers wished for more analysis of exactly what is going on (this blog has one of the most active and smart readerships, over 50,000 comments left lifetime). So I decided to do that. I think this warrants it. So I have distilled all my insights and wisdom into one graphic. Yes, just one picture. This is the graphic nobody else is showing which best explains what has happened and shows what has ACTUALLY happened vs the silly hype and nonsense, as well as why the road into the future is still bright for Apple. And normally, I would write a long essay to get you to fully understand what I mean – the mobile industry is the most complex giant industry on the planet, totally different from the far-smaller tech industries like the PC industry or internet or even media like television. This time I decided to write a short-cut version for all you in a hurry. Just ‘cut to the chase’. The best part. BUT I ALSO wrote the detailed article – with TONS more pictures (and massive insights into the REALITY of the smartphone wars not the bullshit coming out of Wall Street or Silicon Valley writers, pundits and analysts).

THE ONE GRAPHIC TO EXPLAIN iPHONE MARKET PERFORMANCE

Most numbers and graphical illustrations of iPhone and Apple performance are confusing and misleading due to factors partly due to Apple and partly outside its control. The industry is very easy to misunderstand because most tech industries are ‘led by’ the USA at least initially and thus understanding the US market is good for any analyst to the rest of the world. In mobile the industry was not born out of the iconic Motorola phone sold in Chicago in 1983. The industry was born four years PRIOR in .. Japan. Most of the industry’s major inventions and developments came from Japan or else from the largest tech player in mobile of the previous decade – Nokia and its home market of Finland (Finland also launched cellular mobile telecoms two YEARS before the USA). So compare to cars, Daimler & Benz invented the motorcar in Germany but Henry Ford turned the automobile into a mass market. The computer was invented in Britain by Alan Turing but IBM was the first to sell commercial computers. Apple then created the first modern personal computer as the Apple 1, while Commodore also of the USA was the first mass market commercial success in PCs. The internet was born as the ARPAnet for military use in the USA. Wright Brothers flew the first airplane, in the USA. So for most tech if they weren’t born in the USA, the first mass market commercial success would be there. Not in mobile. In mobile Japan and Finland were ahead and by essentially all metrics still today are ahead of the USA. The joke was that to see whats coming in the next iPhone just look at a 4 year old Nokia. And the reality is that almost all improvements to the iPhone were first launched in Japan from the App Store all the way to NFC mobile wallets – which were commercially launched in Japan a decade before iPhone finally brought this idea to Americans 18 months ago.

This is a global industry where the LEADERSHIP is not in the USA. EVERYTHING you see on an iPhone has been a SUCCESS for YEARS in the leading countries of mobile, especially Japan. But there are local phone brands and global brands. American giant corporations tend to be good at globalization. But their management sits back home in the USA (or Canada if you’re Blackberry) and tend to get a myopic view thinking your home market is the ‘reality’ of mobile while its actually a backyard. Its like going to a cave man to try to learn about the future.. So lets get to my graphic. In year 2010 the four largest smartphone makers were Nokia, Blackberry, Apple and Samsung, in that order. They were the big ‘global’ brands with the highest average sales prices, not to be confused with emerging Asian brands of lower price levels like Huawei and ZTE (Lenovo the PC maker had not even gotten into smartphones yet and Xiaomi had not been founded). These four giant global brands were the big names but there were others who also sold premium smartphones like HTC, Palm and SonyEricsson. Their relative smartphone share was so slight, and they all withered away out of the Top 10, that we need not consider them. These four global brands controlled 78% of the total worldwide smartphone market as we enter year 2010.

Two of the four global brands were based in North America. They took a Western-market (Industrialized World) market focus for their distribution, and they only offered top-price premium smartphones. That was obviously Apple and Blackberry. The two other global brands, one out of Europe, Finland’s Nokia, and the other out of Asia, South Korean Samsung, took a different strategy. They both decided to sell not just premium smartphones but also mid-price smartphones. They avoided the ultra-low cost smartphones sold by local brands like say Micromax of India or Tecno of Nigeria. But Nokia and Samsung had a global footprint and offered a wider range of prices than their two North American rivals. Then market share wars happened. Some customers buy a low cost product. Some customers are willing to pay a premium for a premium brand like buying an Audi or Jaguar or BMW as a car. And similarly in phones, some are willing to buy a premium smartphone. The total market for this SEGMENT grew by a factor of 2.6 times during the past 5 years. A great growth opportunity inside the larger smartphone market and the overall handset industry. A huge growth opportunity for these four brands. Now how did they do? This picture explains all you need to know about Apple iPhone:

Apple-Blackberry-Nokia-Samsung-CompetitiveMarketShare-2009-2015

Picture by TomiAhonen Consulting 4 May 2016
(Note above only has the Top 4 smartphone brands from 2010: smaller premium brands and all lower-cost brands excluded)
This picture may be freely shared

First, note that the above is not market share of all smartphones. All the low-cost manufacturers are excluded such as Huawei, Xiaomi, ZTE, Coolpad, Oppo etc. Also the other ‘premium brands’ are excluded too, as their slice is totally negligible. But to consider a sub-set of the total smartphone market, not just higher-price smartphones sold (many local brands also sell premium phones but the brand is not premium) but also premium BRAND in the market, that is these four. They didn’t necessarily compete directly always, a Blackberry user in 2010 tended to be an enterprise corporate smartphone user while iPhones were with consumers – but within brand and price, these were the four. And two groups have the same strategy. Blackberry (larger) and Apple (smaller) in 2010 had the focus on the rich Industrialized countries with USA by far their largest market, doing most of the rest of their business in Europe, Australia, etc the rest of the rich world. Nokia and Samsung meanwhile did not focus only on the most expensive smartphones while both sold there as well, they also sold mid-priced smartphones. And both Nokia and Samsung had Asia as their main focus and sold globally while both also of course sold some smartphones in the USA.

Now the lesson. If there are four competitors and they form two pairings of rivals; then if your direct rival stumbles, its YOUR strategy (same as the stumbling rival) who will pick up most of the spoils. When Nokia collapsed, Apple and Blackberry could not take the spoils – they went to Samsung. And similarly when Blackberry fell, then while Nokia and Samsung did take some gains, the big spoils went to Apple. Now look at the COMBINED share of the premium brand phone market of year 2009. For the Blackberry and Apple strategy they had a combined 45% of the premium smartphone market segment. Today, Apple and Blackberry have.. 40% of that slice. Nokia and Samsung had 55% six years ago, now their combined share is 60%. So WITHIN their bracket, Apple went from 42% of the ‘only premium price phones sold primarily in the West’ to 98% – OF THAT SUBSEGMENT. Meanwhile Samsung in its subsegment in the premium brands, of ‘both premium and mid-price phones sold globally’ they went from 9% six years ago of that subsegment, to 92% today. Meanwhile, unluckily for Apple, the premium brand smartphone segment itself has shifted to more the international global footpring not just USA, Europe, Japan and Australia.. so Samsung was in that subsegment that grew at the expense of Apple’s side.

So when considering their global rivals, both Apple and Samsung BENEFITTED in the past 5 years out of the total collapse of 2 of the 4 rivals. Apple did good, climbing in the global total smartphone market from 3rd ranking to 2nd place, but obviously Samsung did far better, jumping from 4th place among global smartphone brands in 2010 to number 1 today by a healthy margin. These two brands did not jump so far because they were ‘excellent’ while they did well yes. They climbed so far because two of their rivals decided to implode due to morons in management. The gains to both Samsung and Apple were WINDFALL GAINS. The growth they achieved was due to the INDUSTRY growing so fast that when you are a popular premium brand in a fast-growing lucrative business, yes of course you grow too (or you have to be a total idiot not to: see Sony Xperia).

HEADING FORWARD

The graphic above shows that Apple has clearly taken what could be taken. There IS NO growth at the top-end anymore, the weak rivals are already dead like Palm or bought by other brands like Motorola or are dying like HTC. That is why Apple HAS to follow where Nokia and Samsung went years ago (once again, Apple follows Nokia) and do its mid-price iPhone ie the 5 SE. As Apple has been pushing into China, now with the iPhone 5 SE it can go also fight for more of a presence in India (which just became the second largest smartphone market behind China and overtaking USA). Then Apple will clash more and more with Samsung as we can see from the above graphic. Then it seems like at least currently Samsung has figured out far better than Apple what it is that smartphone buyers outside of the USA want – like microSD card slots and waterproofing (both features that Samsung stupidly left out of its flagship last year but put back now). Many of Samsung’s mid-priced Galaxies have removable batteries and of course most are Dual SIM slot phones that are also features prized in the rest of the world, as well as such specs as an in-built FM radio. As Apple still is myopic in its view, thinking that American iPhone buyers are representative of the world markets, the iPhone series still lags major features of great value in the rest of the world, especially in Emerging World markets. Hopefully more changes are coming to make the iPhone more acceptable in that way. But the truth is, there was no place for the iPhone to continue to grow with the old strategy. Now that the 5 SE has been released, Apple can gain some growth in the mid-price segment. And the focus has to be where most phones are now sold – in the Emerging World, not the USA. Apple fully knows this, they’ve been emphasizing their Chinese market performance for a while now.

So. What did we learn? There was a reason Apple was able to find ‘easy growth’ its because two of the main rival global premium smartphone brands decided to commit market suicide. Apple was not as nimble as Samsung has been. Samsung was already focusing on Asia and Emerging World, and had mid-priced smartphones and pheblet-sized screens well before Apple did. So Samsung gained more. But Samsung’s strong gains also ended when its direct rival Nokia was done, then Samsung experienced the weird whip-lash, of where did my rocket-ship growth vanish? And for two years now we’ve had silly stories about Samsung in eminent collapse – totally dumb reporting, Samsung has never been near losing its grip on the top slot of smartphones. Only that its strategy won’t let it grow further. The weaklings were devoured and now if Sammy wants more, it has to go chase the Chinese brands into low-cost smartphones. Meanwhile, how about Apple. It didn’t gain much out of Nokia’s collapse (mostly as Nokia was not big in the USA to begin with) but as Blackberry died shortly after Nokia only more slowly, Apple was able to pick up that slack and now that is all done and dusted. Apple can no longer grow out of the mistakes of others, it has to now fight for any gains from hard-nosed Samsung who is well entrenched in the markets where Apple wants to go, and Sammy has a far larger product portfolio in those price segments. So Apple’s growth path is far slower now but there is clearly more growth to be had. Apple has the most desirable smartphone brand and the best customer loyalty. As it expands its product portfolio down-stream in price – it is gaining share – as we heard from Tim Cook, the iPhone 5 SE demand is oustriipping their ability to produce the devices (duh. I suggested this exact strategy – already in 2010 – and said sooner or later Apple HAS to do it but had they done it sooner they’d be more ahead now)

That is the story (and the picture) nobody else seems to be telling. And its the core of what happened and why there was such hype about Samsung around 2012-2013 and then the disapointments of 2014-2015. Now we have the same reality check coming to Apple. As long as Apple doesn’t make stupid mistakes now as it transitions to a new strategy (like Samsung in 2015 or like haha Sony Xperia) and a key is not to abandon any popular must-have specs or features (but it WOULD help for Apple to pick up some of the industry’s STANDARD features like microSD card support and FM radio) and as long as the pricing strategies are sound, then we should see several healthy years of growth still for the iPhone. Will it keep pace with overall industry growth? Thats a DYNAMIC issue depending on the exact market reactions by rivals. In 2015 Samsung went silly with the Galaxy, Sony Xperia decided to play dumb with its naming and Nokia ie Microsoft decided not to issue a new Lumia flagship at all. So Apple’s 6 series iPhones had an ‘easy time’. This time Sammy is back with a vengeance with highly popular Galaxy S7 and Sony Xperia seems to be getting its act together while several of the lower-priced brands are pushing hard into premium phone territory. Its not getting any easier the lower Apple comes to the mid-field. But go there it must because at the top of the price pyramid there is no more unit sales growth.

So thats what I decided to add to the mostly silly noises about iPhone. Oh, and for those eager to find all the best stats about mobile, my brand new TomiAhonen Almanac 2016 edition will be out this week. If you order it today, I will send you the 2015 edition now, and you will get the 2016 edition in a few days, two for the price of one. How good is that? Here is the web page with details about the 200 page report with 100 graphics and tables of stats about mobile  It only costs 10 Euros.

For those who want to know the FULL story of the iPhone, I have TONS more including phablets – was there a spike, etc after the fold.

 

Welcome back

So Apple had some silly hype built into its expectations. As if Apple was not subject to normal laws of economics, haha. Well, there is a good antidote to that Reality Distortion Field and its called mathematics. We go strictly by the math and numbers here on the CDB blog. So lets dig deeper into WHY the mess and what is the reality vs the hype about Apple and its luvly iPhone.

THE QUARTERLY DATA DRIVES YOU BONKERS

Lets start off with the Apple numbers. Its not that Apple smudges or fiddles with the numbers, its that Apple’s (now abandoned) bizarre launch pattern caused a ridiculous pattern. This is the unit sales of iPhones in the past 7 years: How can anyone make any sense out of this:

IPhone-Quarterly-Sales

Apple Quarterly iPhone Sales, source Apple
This image may be freely shared

That is what you can call a ‘saw tooth’ graph. It has enormous sharp spikes when the new model(s) were released in September and then nearly as bad drops afterwards. So you think the Quarter-on-Quarter or Year-on-Year data is ‘better’. No, its even worse. Check this out:

IPhone-QoQ-Sales

Apple Quarter-on-Quarter iPhone Sales, source Apple
This image may be freely shared

Data like that will drive any analyst bonkers. You have hysterical ecstasy one month then suicidal depression a few months later. Next cycle, repeat, then repeat, then repeat but never rinse. Oh, you wanted the YoY table its not any better. Here:

IPhone-YoY-Quarterly-Sales

Apple Quarter-on-Quarter iPhone Sales, source Apple
This image may be freely shared
Thats ludicrous to examine those numbers to find any insights or information. That is just data noise. There IS a way to analyze Apple iPhone and my readers have known this from the start because thats how we do it on the blog, always. The ONLY way to measure Apple iPhone growth (up to now, as they used to only release phones once per year) was with something statisticians call a ’12 month moving average’. You add the latest month, just-ended April, and replace last year’s April, so every time you have a consecutive 12 month period. In the case of Apple published data, we can do it 4 times per year, at every quarter. So now the data looks like this:

IPhone-12month-Moving-Average

Apple Quarterly iPhone Sales adjusted for 12 month moving average
Source TomiAhonen Consulting based on Apple official quarterly results data
This image may be freely shared

See? Now all the silly volatility is gone and the graphic doesn’t look like a heart monitor graph when the patient has been fed cocaine intravenously haha.. This helps make Apple analysis easy and clear.  We can see there was nothing dramatic happening from 2009 to 2014 except Q3 of 2011 (that was the sudden delay in iPhone 4S when Apple had attempted to force the carrier/operator community to accept a virtual SIM card ie that the iPhone 4S would not have a SIM card slot but carriers said ‘no way’ and suddenly Apple had to rush to redesign its phone and thus it was pushed back from the then-normal June launch to the now-normal September launch).

Other than Q3 of 2011, there is nice healthy growth in iPhone sales through the whole period – up to now, when Q1 of 2016 has a decline. No reason to have heart-attacks every few months. This is the best picture to understand how iPhone sales have performed over time, while removing the wild volatility of its sales cycle within any one calendar year. Note there is a big spike happening from Q4 of 2014 (that was the launch of the phablet-screen sizes of iPhone 6 and 6+.

When you take the trend line for the previous 24 months prior to the phablet screen launch in Q4 of 2014, so look at the graph from Q4 of 2012 to Q4 of 2014 – that is essentially a straight line of growth. Now project that line to today (Q1 of 2016). We are STILL ABOVE that historical trend line, even after the ‘disastrous’ quarter Apple just reported.. Apple is AHEAD OF THE GAME (that is the result of the powerful spike driven by the phablet sales)

SHOW ME THE PHABLET SPIKE

So yeah. Some have ‘seen’ the obvious spike powered by the 6 series of iPhones from Q4 of 2014 – which means that the comparison to last year is to an exceptinally high starting point (ie unfair comparison) while others can’t see it. Let me show you. Again. What is the ONLY tool we can use with Apple iPhone quarterly sales data? The 12 month moving average. If we take the iPhone unit sales growth – same quarter vs 12 months ago – BUT USING 12 MONTH MOVING AVERAGE we get sensible data. Now look at the growth of the latest quarter on a 12 month moving average, vs the previous quarter’s 12 month moving average. And see how steady the growth was almost two years from the start of 2013 to Q3 of 2014 (the 5 Series including 5S and 5C were launched at that time with HUGE sales spikes that now are not confusing us). This is the REALITY of Apple’s ACTUAL growth. And then compare to the Q4 quarter of 2014:

IPhone-Quarterly-Growth-by-12month-Moving-Average

Apple Quarterly iPhone Sales adjusted for 12 month moving average
Source TomiAhonen Consulting based on Apple official quarterly results data
This image may be freely shared

Now the data makes perfect sense. Yes, there is a decline now – but Apple is still WAY ahead of the game because, yes indeed, there was an ENORMOUS spike powered by the phablet-screen sized iPhone 6 and 6+ models. That spike was a one-off, it will never come back. So there is a fair adjustment now coming and the overall total gains to Apple are far above what they would have been with linear growth without the phablet spike.

Readers, please. Go up to the ‘sawtooth’ graphic and you see. There is NO WAY to detect this huge spike from the raw Apple data as it was published and reported by all media. Only a few sensible MOBILE experts were talking of Apple 12 month moving average and they could CLEARLY see a spike. Duh.. Compare the two. They are from the IDENTICAL data set. One hides the spike into the normal Apple volatility and the other clearly exposes the hidden insight. I told you time and again, the ONLY way to study Apple iPhone quarterly sales was 12 month moving average (which will still be useful going forward but likely the dual-annual launch pattern makes it less ‘necessary’)

Ok, what else did I have for you… Oh, yeah, we have to talk about the smartphone market overall (not just luxury brand premium smartphones) AND the overall handset market.. So lets do smartphone market first

APPLE IN SMARTPHONE MARKET

This is the reality of Apple’s iPhone growth annually. Not Apple fiscal years (again, I am NOT an Apple blog and won’t live by their silly fiscal year. My year starts on January 1 and ends on December 31). These are the real calendar years from 2006 when Apple did not sell mobile phones to today. The sales include original 2007 iPhone which was not a smartphone, only a featurephone but total Apple mobile phone sales look like this:

IPhone-Annual-Sales

Apple Quarter-on-Quarter iPhone Sales, source Apple
This image may be freely shared

Aren’t those just glorious growth numbers. The absolute truth, that is how Apple has grown from nothing. And obviously such news has driven the Apple analysts and Wall Street pundits and tech writers batshit crazy thinking Apple is the new Tesla or something haha. Except not us here in mobile. We were NOT impressed. That would be phenomenal performance in a puny little tin-pot industry like the personal computer biz. This is MOBILE the fastest-growing giant industry on the planet. That is only ‘par for the course’ not anything amazing. Because the INDUSTRY ITSELF has grown – and FASTER THAN THAT. Apple took market share for a few years then has been BLEEDING market share for several years, now finally caught up a bit with the strong spike with the phablet 6 series. THIS is WHY we are not impressed. The above is the hype-generating story from Apple. This is the REALITY of the smartphone MARKET:

IPhone-MarketShare-Smartphones

Apple iPhone Market Share out of Total Smartphone Market
Source TomiAhonen Consulting May 2016
This image may be freely shared

That is again the SAME data. But wow, that huge growth which so excites the tech writers in Silicon valley or the clueless idiots of Wall Street – suddenly looks not just tame but gosh after 2013 there was a clear decline in Apple’s market share. So Apple was UNDERPERFORMING the market !!! Yes, thats what we’ve been saying on this blog and all my readers have known the REALITY of the smartphone bloodbath. Apple was not about to take over the world haha. But how many stories did you read last year about how Apple was chasing Samsung (ridiculously silly stories) or could soon become the world’s biggest smartphone maker. How lost are those writers. The above picture tells the REAL story. Apple’s amazing growth was clever timing by Steve Jobs and to be fair, if he had moved into mobile EARLIER he would have seen BIGGER gains and be further ahead… So lets not applaud Apple, they are consistently underperforming and are slow and leave tons on the table and don’t want to act in their own best interest. But yeah. THAT is the REAL story. The only reason there was huge growth in iPhone sales was because Apple had the luck to join the fastest-growing digital gadget sector close to the right time – and then that two of the nearest rivals collapsed. Even then Apple couldn’t snatch the larger share that went to Samsung.. But wait.. even this is painting a rose-colored picture. This is not the reality of the market Apple is in. We need to examine Apple in the mobile HANDSET market – as a featurephone often has a touch screen, web browser and camera. Similar to how the original iPhone was not a smartphone. This is the handset market and Apple’s role in it, globally of course. Paints quite a different picture, doesn’t it? .

 

 

IPhone-MarketShare-All-Handsets

Apple iPhone Market Share out of Total Handset Market (Including smartphones and ‘dumbphones’)
Source TomiAhonen Consulting May 2016
This image may be freely shared

Yeah.. that puts it all into perspective doesn’t it? That is like what is Porsche’s market share of all cars, not just of luxury or sports cars. Apple has yes seen growth of its market share but if you compare to say the first 9 years of the Apple Macintosh PC, it will be eerily similar. Almost identical (which is.. once again.. EXACTLY as I predicted it). Apple is not taking over the world, even as it is doing well in its home market. The world is buying dozens of other phone brands, now mostly smartphones but still hundreds of millions of dumbphones too. Phones that still have a web browser and can do Facebook, so for a random less affluent customer in the world, that is just about what they want. But if Apple showed us this picture, of how tiny its share is of all phones, nobody would believe the next fairy tale about the App Store somehow taking over the world or haha, Apple Pay. And wait… Wanna cry? This is the REALITY that we KNOW in the mobile industry, which is why everybody sings Android songs here.. See the same graphic of Apple iPhone (and iOS) market share of all phones, with Android added to the same picture:

IPhone-vs-Android-MarketShare-All-Handsets

Apple iPhone Market Share out of Total Handset Market (Including smartphones and ‘dumbphones’)
Source TomiAhonen Consulting May 2016
This image may be freely shared

Yes. That is the sad picture Apple doesn’t want you to see. If the industry sees this picture, then the illusion of the App Store is shattered. The Trumpian-wild fantasy of Apple Pay taking over the world is utterly demolished. This is the REALITY of the iPhone. We are not surprised here on this blog, which has called EVERY step of the iPhone saga first, and near-perfectly being by far the most accurate iPhone forecaster of the planet. Because we here on this blog, my regular readers and I – we KNOW this industry and how it works. Apple was never in any contention to take over the world. Its a PREMIUM luxury brand, with a high profit margin, that sells to affluent luxury and style-oriented customers, selling tech that is not the latest or greatest but wilh wonderful Apple marketing powering it. Apple is a luxury premium brand, it cannot ever win the war. Mass Market is not in the Apple DNA. When Apple once tried competing for the mass market in the PC wars in the 1990s, in a far less dynamic, far smaller and far less compeitive market – Apple almost went bankrupt. Its the first lesson Steve Jobs taught his company when he returned to save it – Apple must always be the premium brand not the mass market brand for everybody. We have known this from the start and this story has NO SURPRISES in it to my regular readers. All of the points I make in the pictures here have been discussed – ad infinitum – in the Smartphone Bloodbath series though the years. We NEVER fell for the iHype. The iBullshit. We knew what Apple is, and what the iPhone is. Yes, my blog created the term many use ‘Jesusphone’ for the iPhone and yes, exactly as I predicted back in 2007, the world now thinks smartphones started with the original iPhone – but that is PERCEPTION. Not reality.

Numbers tell the truth. We go by the numbers here on this blog. Always have, always will. Apple will never take over the world. They will always be a luxury premium smartphone but they will do their style thing, they will be ultra-desirable forever, and they will always have the best user experience. Hence they also will have the best loyalty and Apple is smart enough (vs say Sony Xperia) to use the high loyalty and style to always remain profitable. Ridiculously profitable. The iPhone will continue to have great sales success and a MODEST market share which will be near 10% when all new phones sold, will be smartphones around the end of year 2019. See the last picture I just drew for you. Android won the world. That is the one sad picture of great Apple success, that Apple does not want you to see. Because they still have plenly left in that Steve Jobs-created Apple Reality Distortion Zone where iSheep believe Apple is immune to realities of economics. We know what reality is. Reality bites… 🙂

For those who need all the numbers for the mobile industry, not just the handset business but all of it, a 1.7 Trillion dollar industry (as big as total TV, plus total PC, plus total internet, plus total radio, plus total cinema, plus total videogaming – added together).- check out the latest edition of the TomiAhonen Almanac 2016. It has 200 pages, over 100 tables and charts, including a long chapter with 15 tables and charts just about mobile phones & smartphones. The ebook is an unrestricted pdf file that you can save on all your devices. It is formated for the smartphone screen size so you can have all the 100 best mobile industry stats in you pocket every day. And it only costs 10 Euros. Is that not a bargain or what? I am shipping it this week, order it now (as a bonus you’ll also receive the 2015 edition now immediately). TomiAhonen Almanac 2016.

Profile photo of Tomi Ahonen

Tomi T Ahonen - Author, Consultant and Motivational Speaker - Author of twelve bestselling books on mobile, already into multiple printings and translated into several languages, Tomi's books and theories are quoted in over 140 published books by his peers. The former Nokia executive lectures at short courses at Oxford University and is regularly quoted in the press in over 500 articles published in over two dozen languages on all six inhabited continents. Tomi is often seen on TV talking about mobile and digital trends and has been seen at over 350 conferences in over 100 cities in over 60 countries and attended by a cumulative audience of over 125,000 people. His reference list includes most major tech companies in the Fortune 500 including Axiata, BT, China Mobile, Google, Hewlett-Packard, IBM, Intel, LG, Motorola, Nokia, NTT DoCoMo, Orange, RIM, SK Telecom, Telenor, TeliaSonera, Tigo and Vodafone, etc.

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