Strategy Analytics: Apple shipped 65.9 million iPhones during holiday 2018 quarter

“Strategy Analytics estimates Apple shipped 65.9 million iPhones worldwide in Q4 2018, tumbling -15% YoY from 77.3 million in Q4 2017,” Neil Mawston blogs for Strategy Analytics.
Apple no longer provides quarterly unit sales figures for iPhone, but Apple CEO Tim Cook said the following regarding iPhone sales during the company’s conference call with analysts on Tuesday after market close:
Our customers are holding on to their older iPhones a bit longer than in the past. When you pair this with the macroeconomic factors, particularly in emerging markets, it resulted in iPhone revenue that was down 15% from last year. Our iPhone results accounted for significantly more than our entire year-over-year revenue decline. In fact, outside of iPhone, our business grew strongly by 19%.
So, what’s behind this? It’s important to understand what’s going on from the customer perspective at the point of purchase. We believe that it’s the sum of several factors. First, foreign exchange. The relative strength of the U.S. dollar has made our products more expensive in many parts of the world. In Turkey, for example, the lira depreciated by 33% over the course of calendar 2018 and in the December quarter, our revenue there was down by almost $700 million from the previous year.
Second; subsidies. For various reasons, iPhone subsidies are becoming increasingly less common. In Japan, for example, iPhone purchases were traditionally subsidized by carriers and bundled with service contracts. Competitive promotional activity frequently increase the amount of subsidy during key periods. Today, local regulations have significantly restricted those subsidies as well as related competition. As a result, we estimate that less than half of iPhones sold in Japan in Q1 of this year were subsidized compared to about three quarters a year ago and that the total value of those subsidies had come down as well.
Third, our battery replacement program. For millions of customers, we made it inexpensive and efficient to replace the battery and hold onto their existing iPhones a bit longer. Some people have suggested that we shouldn’t have done this because of the potential impact on upgrades, but we strongly believe it was the right thing to do for our customers…
We are undertaking and accelerating a number of initiatives to improve our results. It’s not in our DNA to just stand around and wait for macroeconomic conditions to improve. One such initiative is making it simple to trade in an iPhone in our stores and raising awareness of this opportunity. Because of the quality and durability of iPhones, they maintain significant residual value making trade-ins a great opportunity. It’s not only great for the environment, it’s great for the customer as their existing phone acts as a subsidy for their new phone and it’s great for developers as a phone that is traded in and redistributed can help grow our active installed base.
Beginning last week, we started making it easier for people to pay for their phones over time with installed payments and we’re working on rolling out this program to more geographies as soon as we can.
We are as confident as ever in the fundamental strength of our business and we have a very strong pipeline of products and services with some exciting announcements coming later this year.
MacDailyNews Take: Besides the fact that any claims of iPhone unit sales figures not explicitly stated by Apple are now just guesstimates…
Units don’t matter. There are only so many quality users on the planet. Keeping them happy, as every measure of customer satisfaction shows Apple has amazingly well done to date, is what matters. As long as the users buy apps on the App Store, subscribe to Apple Music, add iCloud storage, use Apple Pay, etc., they can replace their hardware with Apple hardware at their own pace.
iPhone has higher customer satisfaction than Android, meaning that Apple gains iPhone users from Android via normal churn as users graduate to real iPhones. — MacDailyNews, January 21, 2019
Yes, the iPhone replacement cycle is lengthening, but with so many iPhone (and iPad) users and with customer satisfaction so high, it really doesn’t matter. The market is mature and there are only so many quality users on the planet. Apple has that market cornered. The types of people who’ve settled for Android aren’t likely to buy as many apps or subscribe to services. They want free. They’re not worth much after the sale. The iPhone knockoff peddlers like Samsung can have them.
This is, of course, Apple’s point with ceasing the reporting of unit sales. It’s the user base, the quality of the user base, and services that matter more now. That’s where the growth is and where it will be for many, many years to come. — MacDailyNews, January 5, 2019