New Research Memo Drops a Bomb on ‘Dismal’ iPhone Sales Reports

Iphone Xs And Xs Max Sales Credit: Nemanja Zotovic / Shutterstock
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The market may be sounding the doom-and-gloom alarm for Apple, but recent data suggests that much of that may be unfounded. A pair of market reports suggest that Apple’s iPhone sales are doing fairly well when other critical factors are considered. Let’s explain.

iPhone Sales in 2018 & 2019

A recent Cowen research memo, spotted by AppleInsider, estimated that Apple shipped about 73.5 million iPhones in its December quarter, an increase of about 1.5 million units over previous forecasts.

The memo goes on to predict that Apple is likely to ship about 44 million iPhone units during this quarter, which ends in March.

For the entirety of 2019, Cowen forecasts that Apple will ship less than 200 million iPhones. That’s a decrease of about 7 to 10 percent year-over-year. But that drop may not be tied to Apple-specific woes. Instead, it’s likely due to a stagnating global smartphone market.

As further evidence of that, Cowen analysts said that Apple has been relatively unfazed by a recent court injunction in China.

Of course, the increasing price of iPhones may also be impacting Apple’s growth. But that has also had the side effect of bumping up Apple’s Average Selling Price. In its last earnings call, Apple actually reported an increase in iPhone revenue.

In addition to revenue, Apple’s iPhone sales may also be driving the only segment of the smartphone market reported to be growing: Premium.

Apple Is Driving the Premium Market

While overall smartphone market growth is flattening, there is one segment of that market that is actually doing the opposite: premium smartphones.

According to Counterpoint Research, the premium smartphone segment actually grew 19 percent year-over-year in the third quarter of 2018.

Compare that to the general smartphone market, which shrank 5 percent in the same period.

More than that, the premium market is basically Apple’s game in many critical regions of the world. Counterpoint suggests that the growth in the sector was largely driven by new iPhones, along with flagship devices released by Chinese OEMs.

All in all, Apple nabbed a 47 percent share of all premium smartphones sold in Q3 2018. Samsung and Huawei rounded out the top three with 22 and 12 percent respectively.

  • When it comes to specific price tiers, Apple captured 79 percent of the $800-and-up category and 61 percent of the $600-to-$800 category.
  • The $400-to-$600 category, however, was dominated by Samsung with a 25 percent share, compared to Apple’s 21 percent.

Apple’s dominance in the premium segment was largely driven by markets like the U.S., China, Japan, Korea and Western Europe.

It nabbed the top manufacturer spot in North America, the Middle East, Western Europe, China and Asia-Pacific. Apple came in second in Latin America, Central Europe and Eastern Europe, and ranked third in India (where it has struggled to get a foothold).

This bodes well for Apple. The company may be selling fewer iPhones, but it’s actually making more cash in a market segment that it largely dominates.

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