Apple Sneaks by Android in Fourth Quarter U.S. Smartphone Sales

[BaldiMac]

I was wondering if I can just get your answer to the following.

If the entire market (let's say US) was already available to the iPhone. Why add additional carriers? What difference does that make?

Same reason they added a notification center or Siri. To make the device more attractive to people within the market.

Let me ask you a simple question in return. Do you believe that adding Verizon and Sprint more than doubled the available US market for the iPhone (from 80 million to 210 million)?

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That's the whole point being made. Many people declared themselves out of Apple's market, and put themselves in when it came to other providers. Either in 1st Q for VZW or 4th for Sprint.

Regardless of why, these people were not in the iPhone market. I am one, for instance. Until sometime in early 2010 I was not in VZW's market, either. It became a possibility in my mind at that point, and then solidified when they offered the iPhone 4.

Just because you don't want an iPhone based on its current features doesn't mean you aren't in the market.

 

[JAT]

Just because you don't want an iPhone based on its current features doesn't mean you aren't in the market.

You need to go back to the OP on this little point. I can't remember who it was (kdarling?), but that was the point. You are arguing some textbook definition of the word, not the specific point discussed in this thread.

 

[BaldiMac]

You need to go back to the OP on this little point. I can't remember who it was (kdarling?), but that was the point. You are arguing some textbook definition of the word, not the specific point discussed in this thread.

No, I'm discussing a specific point. kdarling said that the available market for the iPhone in the US more than doubled from 4Q2010 to 4Q2011 from 80 million (4Q2010 AT&T subscribers) to 210 million (4Q2011 AT&T, Verizon, Sprint subscribers).

It's simply not true.

1)Verizon and Sprint subscribers not under contract in 4Q2010 could easily have switched to the iPhone by switching carriers without any financial penalty.
2) Obviously, the fact that there were people that switched from Verizon or Sprint to AT&T for the iPhone proves that a certain percentage of Verizon and Sprint customers were in the market.
3) If you are going to claim that contracts removed people from the market in 4Q2010, the same problem exists in 4Q2011! If you are going to remove a large percentage of VW and Sprint customers from the market because they were under contract in 4Q2010, a similar percentage of people are under contract in 4Q2011.
4) kdarling's statement also ignores all new wireless subscribers that did not have a previous service.

 

[JAT]

No, I'm discussing a specific point. kdarling said that the available market for the iPhone in the US more than doubled from 4Q2010 to 4Q2011 from 80 million (4Q2010 AT&T subscribers) to 210 million (4Q2011 AT&T, Verizon, Sprint subscribers).

It's simply not true.

1)Verizon and Sprint subscribers not under contract in 4Q2010 could easily have switched to the iPhone by switching carriers without any financial penalty.
2) Obviously, the fact that there were people that switched from Verizon or Sprint to AT&T for the iPhone proves that a certain percentage of Verizon and Sprint customers were in the market.
3) If you are going to claim that contracts removed people from the market in 4Q2010, the same problem exists in 4Q2011! If you are going to remove a large percentage of VW and Sprint customers from the market because they were under contract in 4Q2010, a similar percentage of people are under contract in 4Q2011.
4) kdarling's statement also ignores all new wireless subscribers that did not have a previous service.

Hmm, I think I have an answer:
You are arguing some textbook definition of the word, not the specific point discussed in this thread.

I might add that people are allowed to know what they themselves are talking about.

 

[BaldiMac]

Hmm, I think I have an answer:
You are arguing some textbook definition of the word, not the specific point discussed in this thread.

I might add that people are allowed to know what they themselves are talking about.

You can stop repeating yourself. I understand his point, and I disagree with it. I am choosing to have a discussion about it. Participate or not.

If you agree with kdarling's premise, then please address the points that I made as to what is included in the market. Or explain what you think the point is. Or give us your non-textbook definition of a market.

Do you think that the entire available market for iPhones in 4Q2010 was equal to the number of AT&T subscribers at the time? Why?

 

[kdarling]

Cherry picking? I responded to part of your claim, and did not address it directly to your post. I responded to other parts in other posts.

That wasn't meant for you, my dear BaldiMac.

Again, if you are saying it's not surprising because Apple is executing so well, that's one thing. But if you are implying that any other company would have the same results given those factors with any random product, its just ridiculous.

We're only talking about Apple, not anybody else.

And, as has been pointed out multiple times, Apple did not add 120 million potential customers to it's market. It only added those customers who did not have access to AT&T but do have access to Verizon and Sprint. Apple simply made the iPhone more attractive to people who prefer Verizon and Sprint.

Anyone who's signed a two year phone contract, and/or live where carriers are important, sure wouldn't be claiming that switching is such a casual, spur of the moment thing.

(To someone else) Do you believe that adding Verizon and Sprint more than doubled the available US market for the iPhone (from 80 million to 210 million)?

To make you happy, let's throw away the millions figures and stipulate this instead: the number of people who could stay on their carrier and buy an iPhone multipled by about 2.5 times.

In 4Q 2010 about 4 million ATT customers bought an iPhone. One year later with the Verizon market added on, 4 million Verizon customers bought one. That helps double YOY right there.

Now, I think you're trying to assert that Apple did well only because their phone was in demand. Well, that takes buyers, and ATT customers alone did not cause the triple increase. It clearly took the new Verizon and Sprint markets to help do that.

(On the ATT side, there was yet another factor: the extra few months of waiting meant that there was an extra 3 million iPhone owners eligible for their two year upgrade, as that's how many were sold during that period two years prior.)
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As a side note, when I said it's not surprising that Apple did so well, that's a compliment towards their marketing and sales plan. I think the people who act surprised are the ones being negative towards Apple!

 

[duffman9000]

Both of you (and I might add that's why I have voonyx on ignore, because he always does this) are quite far from the actual comment that started it all :

Fire sale.

A subsidized price is not a fire sale. A subsidized price dropping and is not fire sale either. It's just a bigger subsidie. Like you say, Amazon backs themselves with an extra cancellation fee on top of Verizon's cancellation fee.

In the end, Samsung is getting the full price for the phone. This is quite unlike HP's real fire sale, in which they actually took a loss.

Of course, feel free to ignore voonyx, he'll argue around in circles, nitpick everything and move goalposts until he's satisfied he's won some kind of point that has nothing to do with the original topic at all (a point you may not even disagree with to begin with).

What is Amazon getting from dropping the price? If I were to make it through the contract, which I probably will since I've never broken a contract, why would Amazon pay a higher subsidy? To entice me to switch to Verizon? Or because a better phone is already near?

 

[twoodcc]

good job Apple! i still say the iPhone offers the best overall experience. but the iPhone still lacks at some things, like LTE, screen size, and it's not quadcore. the next iPhone should have all of these

 

[mark28]

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]


Reuters reports on new data from research firm Kantar Worldpanel ComTech showing that Apple slipped past Android by the narrowest of margins in fourth quarter U.S. smartphone sales, with Apple's iPhone taking 44.9% of the market and Android taking 44.8%.The results, driven by Apple's blockbuster quarter in the wake of the iPhone 4S launch, saw Apple double its U.S. sales share year-over-year while Android slipped from its 50% share a year ago. Apple yesterday reported sales of 37 million iPhones during the quarter, far exceeding expectations.

Image


Kantar's report also focuses on Windows Phone, which continues to struggle despite the high-profile launch of Nokia's Lumia smartphones. Windows Phone's market share remains at less than 2% in all nine markets followed by Kantar.

Article Link: Apple Sneaks by Android in Fourth Quarter U.S. Smartphone Sales

Who cares what analysts say. They are always wrong as it are estimates.

 

[kdarling]

What is Amazon getting from dropping the price? If I were to make it through the contract, which I probably will since I've never broken a contract, why would Amazon pay a higher subsidy? To entice me to switch to Verizon? Or because a better phone is already near?

It's partly because they want you coming to their website

And yes, it's partly to entice you to switch: the $99 deal is only for new customers, for which carriers pay bounties.

I would also bet that above a certain plan rate, Verizon pays Amazon a percentage of the monthly bill. Not much, but a few million customers here, a few million customers there, and pretty soon you're talking real money

 

[voonyx]

What is Amazon getting from dropping the price? If I were to make it through the contract, which I probably will since I've never broken a contract, why would Amazon pay a higher subsidy? To entice me to switch to Verizon? Or because a better phone is already near?

It's because the phone is not in demand

 

[kdarling]

It's because the phone is not in demand

On the contrary, Amazon often promotes such offers on the hottest phones, just to get people to come and sign up on their website. That's priceless to them.

 

[voonyx]

Not relevant, even in such cases. Amazon themselves do not stock phones, so they have no need to cut prices to sell them.

On the contrary, Amazon often promotes such offers on the hottest phones, just to get people to come and sign up on their website. That's priceless to them.

Of course its relevant. If they have no reason to cut prices, they'd have no reason to start at a higher price either. You're saying there's no benefit to them if the phone is priced higher? If not, why not just make all their phones free? they'd get millions of ppl to come to their website!

Just saw your edit kdarling. You're still wrong, of course.

 

[kdarling]

Of course its relevant. If they have no reason to cut prices, they'd have no reason to start at a higher price either. You're saying there's no benefit to them if the phone is priced higher? If not, why not just make all their phones free? they'd get millions of ppl to come to their website!

It's not all black or white. The real world is shades of grey.

Did you read the WSJ article linked above, on why Amazon does such things with the latest phones?

Sure, low prices are also used to boost sales of items that aren't selling. That's why iPhones dropped to free in some countries like Japan. Sometimes low prices are just to get people hooked on the brand, as with the iPhone 3GS.

 

[voonyx]

It's not all black or white. The real world is shades of grey.

Did you read the WSJ article linked above, on why Amazon does such things with the latest phones?

Sure, low prices are also used to boost sales of items that aren't selling. That's why iPhones dropped to free in some countries like Japan. Sometimes low prices are just to get people hooked on the brand, as with the iPhone 3GS.

Absolutely, but if a phone was initially selling at a certain price and then dropped, it's pretty likely the reason is demand. Trying to get new customers for a high demand item doesn't make sense because in this case amazon would need three times as many customers to make the same amount of money. If it's in high demand at the original pricepoint, they'd be making way more money, way faster.

If the phone was always 99 at amazon, then yes I'd agree it's for enticement. If it drops 66% in a month, it's lack of demand.

 

[DeathChill]

It's not all black or white. The real world is shades of grey.

Did you read the WSJ article linked above, on why Amazon does such things with the latest phones?

Sure, low prices are also used to boost sales of items that aren't selling. That's why iPhones dropped to free in some countries like Japan. Sometimes low prices are just to get people hooked on the brand, as with the iPhone 3GS.

It's so strange the way it worked out in Japan. Initially the iPhone wasn't popular there and then the base model went free and plan costs were lowered and now the iPhone 4S is dominating the sales charts over there. Even weirder is that the free models (16 GB) aren't the ones selling best.

 

[kdarling]

And finally, a quote from 2Q11:

"In terms of iPhone, we did actually very well everywhere. I'd call out two places where it was just off the charts.

The U.S. grew 155% year-over-year, obviously adding Verizon and beginning to offer iPhone to their enormous customer base was key in that. "

- Timothy Cook

Now if Tim Cook, the man who made billions for Apple, says they added Verizon's "enormous customer base", and it was key to U.S. growth, then who are we to argue

 

[voonyx]

And finally, a quote from 2Q11:



Now if Tim Cook, the man who made billions for Apple, says they added Verizon's "enormous customer base", and it was key to U.S. growth, then who are we to argue

I don't know why you keep hanging on this. Your arguing something that no one else is. This started with your ridiculous assertion that doubling their share was expected and it would have been a miracle if they didn't double their share. The fact that you can't see how silly that is is baffling. It's pretty awesome with all the analysts out there that some random guy on macrumors expected this to happen and it's not anything surprising....you need to be getting paid for your expert analysis

And I know that you backtracked on your "it's mostly current customers" thing but you kinda get why you come off as anti-apple? Up until the day before this report came out you were saying it's mostly current customers, and then once you find out it's not you say "this was expected".

 

[samcraig]

I don't know why you keep hanging on this. Your arguing something that no one else is.

Nice try - but completely and utterly false. BaldiMac is arguing this very point which kdarling is addressing. Must frustrate you to no end that he's right.

 

[Rodimus Prime]

At&t offers Early upgrades, so it is easier to upgrade while on At&t(I guess that fits into your limited exceptions). No cancellation required. No number porting. No billing changes.

For a Verizon or Sprint customer, it would take a contract cancellation, to buy an iPhone in 4Q 2010.

One is clearly easier than the other. no? You are talking theory, but what about in reality?

Not really if you are on a family plan. All the carriers pretty much say its OK as long as one of the lines on the plan can get an upgrade. They have no problem rotating them around.

 

[AppleScruff1]

I don't know why you keep hanging on this. Your arguing something that no one else is. This started with your ridiculous assertion that doubling their share was expected and it would have been a miracle if they didn't double their share. The fact that you can't see how silly that is is baffling. It's pretty awesome with all the analysts out there that some random guy on macrumors expected this to happen and it's not anything surprising....you need to be getting paid for your expert analysis

And I know that you backtracked on your "it's mostly current customers" thing but you kinda get why you come off as anti-apple? Up until the day before this report came out you were saying it's mostly current customers, and then once you find out it's not you say "this was expected".

Not silly at all. You didn't think that adding 2 new carriers would have a significant impact on growth?

 

[kdarling]

Up until the day before this report came out you were saying it's mostly current customers, and then once you find out it's not you say "this was expected".

You seem to keep trying to fit everything into one bin. In reality there were both new and repeat customers involved.

On ATT's side, new model sales historically have been made up more and more of current iPhone owners. This was first noted with iPhone 4 buyers by a huge follower of Apple at Piper Jaffray:

"The bottom line: 77% of new iPhone buyers were existing iPhone owners (upgrades), compared to 56% in 2009 and 38% in 2008," Munster wrote. "Apple is effectively building a recurring revenue stream from a growing base of iPhone users that upgrade to the newest version every year or two." - Gene Munster, Piper Jaffray

So that was the report that I had in mind when I mistakenly repeated a blogger's post that said the same thing: that Verizon iPhone 4S sales were made up of a similar happy percentage of upgrade buyers. Thankfully, others immediately corrected my post, noting that the number was actually reported as 80% of current Verizon customers, not current iPhone owners. Apparently you missed those corrections.

None of this is "anti-Apple", as you keep trying to paint it, unless you try to claim that Gene Munster, of all people, is also anti-Apple.

The interesting thing here is that you continue to avoid telling us why YOU were so "surprised" at Apple's sales increase. Should you be accused of being anti-Apple because you assumed they would have only a little increase? Of course not. Such accusations are for kids, not adults.

 

[voonyx]

You seem to keep trying to fit everything into one bin. In reality there were both new and repeat customers involved.

Well yeah, it's easy to say this when you backtracked what you're saying. Again, before the report it was mostly current customers and "it appears android is having greater growth" and after the full backtrack "it would be a miracle if this didn't happen". Where was your prediction that this would happen, before you found out it would happen? Surely if this was so expected, you wouldn't say "android is growing faster" even if you were mistaken, right? It's easy to "expect" things in hindsight, which is what you're doing.

So that was the report that I had in mind when I mistakenly repeated a blogger's post that said the same thing: that Verizon iPhone 4S sales were made up of a similar happy percentage of upgrade buyers. Thankfully, others immediately corrected my post, noting that the number was actually reported as 80% of current Verizon customers, not current iPhone owners. Apparently you missed those corrections.

Cool, so again if that was the report you had in mind, and you had the mistaken belief that the same applied for Verizon, why was this expected and not surprising? Oh this is one of those "I'll just cover all my bases" things, huh. After you're corrected, suddenly you're aware that this would have been anti miraculous if it didn't occur? Convenient, indeed.

None of this is "anti-Apple", as you keep trying to paint it, unless you try to claim that Gene Munster, of all people, is also anti-Apple.

The interesting thing here is that you continue to avoid telling us why YOU were so "surprised" at Apple's sales increase. Should you be accused of being anti-Apple because you assumed they would have only a little increase? Of course not. Such accusations are for kids, not adults.

Sure it is. In a report about apples tremendous sales, you downplay it by saying it's repeat customers (wrong, of course). In a report about their growing share, you backtrack and say it was expected. The contradiction and bias is there for everyone to see, not sure why you're trying to hide it.

Second, I'm surprised that they doubled their share, not that they increased it. Acting like you don't know what i mean is what kids do not adults. The bias that i have against fanatic android users who come here just to insult apple users is pretty clear, why don't you own the one you have? That's what adults do.

 

[samcraig]

I think it's very transparent (and available for all to see) who is discussing issues in a rational and adult manner and who is more concerned with nitpicking someone post indefinitely and trying to "prove" them wrong. The language used in posts is very telling. One only needs to read other things a poster writes on here and on their own blog to determine who is responding as an adult and who is not. Speaking of which - that was a very fast "3 months" LOL.

My .02.

 

[voonyx]

http://allthingsd.com/20120126/nine-out-of-10-iphone-buyers-are-picking-the-4s/

42% broke their contract -- guess it wasn't that difficult to break a contract after all
90% bought the iPhone 4S -- guess the fact that the 3GS was free wasn't that big a factor

Apple failed big time with the 4S. Big time.