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Continued popularity of Apple's legacy iPhone 4S added estimated 10M iPhone users last quarter

post #1 of 91
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Though the iPhone 4S is now more than two and a half years old, it continues to be a strong seller for Apple, with one new estimate suggesting it accounted for 25 percent of iPhones sold by the company last quarter, drawing in nearly 10 million new users to the ecosystem.




Analyst Charlie Wolf of Needham & Company issued a note to investors on Wednesday, a copy of which was provided to AppleInsider, in which he broke down the pricing on Apple's iPhone models to estimate how strong of a performer the iPhone 4S was in the March quarter. Such steps are necessary because Apple does not break down sales on a model-by-model basis.

Apple revealed that the average selling price of the iPhone was $596 last quarter, divided between the $650 starting price for the iPhone 5s, $550 entry price for the iPhone 5c, and $450 tag for the iPhone 4S.

Wolf estimates that the iPhone 5s accounted for 71 percent of March quarter sales, while the iPhone 5c took just 4 percent. That means the iPhone 4S would have taken the remaining 25 percent of sales for the three-month span.




While Apple didn't break down sales of individual models, the company did reveal that the iPhone 4S was a strong performer in the quarter, and served an important role in bringing new users into the ecosystem. Specifically, Apple revealed that 85 percent of iPhone 4S buyers were new to the iPhone platform.

As a result, Wolf believes that the iPhone 4S alone brought in about 10 million new iPhone customers last quarter. Given Apple's extraordinary ability to retain customers, the analyst said these figures challenge the notion that the company must introduce a more affordable iPhone to reach emerging markets such as China, India and Brazil.

"On innumerable occasions in the past, Tim Cook, Apple's CEO, has repeated the mantra that Apple would not stray from its strategy of building the aspirational brand in the smartphone market," Wolf wrote. "If Apple can have its cake and eat it too, Apple and the iPhone could enjoy a prosperous future."

Strong sales of the iPhone 4S helped Apple to exceed expectations in the March quarter, growing sales by 17 percent to 43.7 million total units.




The iPhone 4S has proven so popular that Apple has opted to keep the model around, even as it has launched in some markets a new, lower-priced 8-gigabyte model of the larger-screened and more powerful iPhone 5c.

The iPhone 4S first launched in October of 2011, and its defining feature was the debut of Siri, Apple's voice-driven personal assistant. It featured the same design and 3.5-inch display as its predecessor, the iPhone 4, but boasted faster internal components and an improved camera.

Apple keeps previous-generation iPhone models as part of its lineup after it debuts new models in order to hit lower price points and appeal to different segments of the market. While the iPhone 4S sells for $450 U.S. unsubsidized, some carriers offer the handset for free with a new two-year service contract.
post #2 of 91
The reasoning for its popularity has two undeniable driving factors: Price & Size.

While Price is going to be a driving factor, I'm sure there are people out there that simply want a smaller device.

While I don't expect Apple to continue to offer 3.5" screens forever, its worth noting that the 4" display size is going to remain important for years to come, even if the flagship device is only available as 4.7".

I still think Apple should be redesigning and producing a new 4" model to accompany this year's 4.7" model.
post #3 of 91

I'm using a 5 now, but I miss the size of the 4.  The 5 in my jeans pocket pokes me when I sit down.  If the rumors are true on the 6, I may have bought my last iPhone, at least until Apple figures out that different people want different size phones.  

post #4 of 91

It's a proof that Apple got it right with the iPhone design, even the old "4S" model is still selling..

post #5 of 91
I love my 4S but those prices feel too high given what you can buy for the same money on the Android side. Just saying.

I wish Apple would introduce new phones and drop the price of the 4S by half.
post #6 of 91
Hey it's the "let's make the 5C sales look as bad as possible" reports. I doubt the 4S is outselling the 5C.
post #7 of 91

The 3.5" form factor is too small for the vast majority of people. Future iPhone releases should include refreshes of 4" and 4.7" designs. I'm not convinced on 5.5" size yet.

post #8 of 91
Quote:
Originally Posted by pmz View Post


While I don't expect Apple to continue to offer 3.5" screens forever, its worth noting that the 4" display size is going to remain important for years to come, even if the flagship device is only available as 4.7".

I still think Apple should be redesigning and producing a new 4" model to accompany this year's 4.7" model.

I agree.
Quote:
Originally Posted by 512ke View Post

.

I wish Apple would introduce new phones and drop the price of the 4S by half.

Apple will release new phones as usual so that's a wasted wish.

For what reason for the steep price drop? Market share? Haha.
post #9 of 91
Quote:
Originally Posted by 512ke View Post

I love my 4S but those prices feel too high given what you can buy for the same money on the Android side. Just saying.

I wish Apple would introduce new phones and drop the price of the 4S by half.

 

yes, but can you get iOS with Android...

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post #10 of 91
Quote:
Originally Posted by RalphMouth View Post
 

The 3.5" form factor is too small for the vast majority of people. Future iPhone releases should include refreshes of 4" and 4.7" designs. I'm not convinced on 5.5" size yet.

 

Yes, this report proves it.  /s (just in case)

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post #11 of 91
Quote:
Originally Posted by island hermit View Post
 

 

Yes, this report proves it.  /s (just in case)

 

It only proves that people like free more than a larger screen size.  If Apple offered two free options 3.5" and 4", which one do you think people will choose?

post #12 of 91
Quote:
Originally Posted by RalphMouth View Post
 

 

It only proves that people like free more than a larger screen size.  If Apple offered two free options 3.5" and 4", which one do you think people will choose?

 

1. It aint free.

 

2. I honestly think it would be split 50/50  70/30 in favor of the 4"  5  //  split 95/5 in favor of the 4"  5S

 

3. If it's a choice between the 4S and the 5C then it would be 40/60 in favor of the 3.5" 4S

 

(sorry... revising numbers to reflect model)


Edited by island hermit - 5/14/14 at 7:29am
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post #13 of 91
Quote:
Originally Posted by 512ke View Post

I love my 4S but those prices feel too high given what you can buy for the same money on the Android side. Just saying.

I wish Apple would introduce new phones and drop the price of the 4S by half.

Yes, that must be why they sold only 10 million of those....

post #14 of 91
Quote:
Originally Posted by island hermit View Post
 

 

yes, but can you get iOS with Android...

 

1. It aint free.

 

2. I honestly think it would be split 50/50  60/40 in favor of the 4"

 

3. If it's a choice between the 4S and the 5C then it would be 40/60 in favor of the 3.5" 4S

 

1. Yes you're right. I was thinking of only the US.

 

2. I personally feel it would be more like 75/25 in favor of 4"

 

3. Yes it seems like people prefer metal over plastic.

post #15 of 91
Quote:
Originally Posted by RalphMouth View Post
 

 

1. Yes you're right. I was thinking of only the US.

 

2. I personally feel it would be more like 75/25 in favor of 4"

 

3. Yes it seems like people prefer metal over plastic.

 

Sorry, I changed things a bit.

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post #16 of 91
Quote:
Originally Posted by RalphMouth View Post
 

3. Yes it seems like people prefer metal over plastic.

 

I can't tell what is causing the aversion to the 5C, the plastic or the colors... or both.

(yes, I know, "if" there is an aversion... but I strongly believe there is) [- that wasn't meant for you RM]

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post #17 of 91
Can someone explain how this guy would know the breakdown of iPhone sales by model? Apple doesn't release that information so where is he getting it from?
post #18 of 91
Quote:
Originally Posted by island hermit View Post

Yes, this report proves it.  /s (just in case)
But apparently it proves to you that the 5C is a failure.
post #19 of 91
The iPhone 4S is a great phone. I just changed over to a 5, but the 4S is still fully functional and as new. The only gripes compared to the 5 was that the 4S was thicker, heavier and more fragile. But the size is great.
post #20 of 91
Quote:
Originally Posted by Rogifan View Post

Can someone explain how this guy would know the breakdown of iPhone sales by model? Apple doesn't release that information so where is he getting it from?

Um... a survey?

post #21 of 91

My iPhone 4s is chugging along nicely, although I suspect iOS 8 will make it lag just like iOS 7 did for the iPhone 4.

 

Looking forward to the iPhone 6, but hope the size doesn't increase or that they at least offer a sibling 4" or smaller device for those of us that appreciate real single handed operation.

iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
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iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
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post #22 of 91
I've been saying for some time that the iPhone should come in escalating and shrinking sizes starting with an introductory 3.0 inch model and stepping up every half inch or so to a 5.5 inch model. That would be 3.0, 3.5, 4.0, 4.5, 5.0 and 5.5 inch. If Apple wanted to reduce number of models, they could do 3.25, 4.0, 4.75 and 5.5 or whatever numbers give them the proper scaling to reduce work for developers. That would be small, medium, large and XL without being grossly large or much too tiny.
post #23 of 91
I doubt he is correct. Mixpanel has iPhone 5s going from 14.1% to 21.56% of iPhone's in use during 1st quarter, iPhone 5c going from 4.93% to 6.71%. That works out to a ratio of 4.2 new iPhone 5s to every iPhone 5c. His ratio is 17.75. I think I believe Mixpanel. His problem is looking at the average starting price of the various models versus the most likely selling price of each model and retail markup. There is a wider range of prices for the iPhone 5s than the 5c of 4s. Retailers make a profit (when Apple does not sell it themselves).
post #24 of 91
Quote:
Originally Posted by jungmark View Post

Hey it's the "let's make the 5C sales look as bad as possible" reports. I doubt the 4S is outselling the 5C.
Agreed. How was the 5c the 2nd and 3rd best seller on all US carriers, but way behind 4s sales? I know, developing markets may opt for the 4s, but to be the #2 phone on the US would be hard to overpass
post #25 of 91
Quote:
Originally Posted by reydn View Post


Agreed. How was the 5c the 2nd and 3rd best seller on all US carriers, but way behind 4s sales? I know, developing markets may opt for the 4s, but to be the #2 phone on the US would be hard to overpass

 

The 5C doesn't even show as one of the top 3 smartphones during January through March 2014.

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post #26 of 91

Way too many misinterpretations of the article in one page of comments.

 

No where did the article state the 4S is doing better than the 5c. The article merely points out that despite the 5c being newly introduced at the same ON CONTRACT price point (not off contract), the 4S still sells. Not better, not well, not any specific measure...just that it continues to sell.

post #27 of 91
There may come a time in Apple's future when it is possible for them to offer all of their hardware at far slimmer margins if the manufacturing process is improved to the point where an iPhone/"iDevice" is molded and assembled with no human hands in the process. It would flip the traditional model of Apple making their profits on hardware and incremental sales on software, but as high quality manufacturing improves, and device capability improves to the point where an iPhone is as important as owning a credit card, most of the profits may come from software and services going forward...it could be that post-artificial intelligence, services will be everything!
Edited by SpamSandwich - 5/14/14 at 8:04am

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #28 of 91
Originally Posted by RalphMouth View Post
The 3.5" form factor is too small for the vast majority of people.

 

Why would you say that, ever, when every point of data we have says otherwise?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #29 of 91
Quote:
Originally Posted by 512ke View Post

I love my 4S but those prices feel too high given what you can buy for the same money on the Android side. Just saying.

I wish Apple would introduce new phones and drop the price of the 4S by half.

What you can buy on the Android side for that money is junk when you consider that they likely will never get an update, and that the quality is low, along with user satisfaction. Just saying.

It's interesting just how naive people are about manufacturing. Do you really think that Apple can simply drop the price of a product by half, that's already had its price cut by 31%? Apple is making somewhat lower margins with this now than when it was the top model. Those margins were about 47% then. Likely the margins now are closer to the 35-40% range. That's gross margin, not profit. If they cut the price by half, they would have a negative margin of around 29%. Is that good business? Well, for some companies it is, because they expect to lose money on products. We can look to the XBox, the PSx series and the WiiU. They have all lost money.
post #30 of 91
Quote:
Originally Posted by pmz View Post
 

Way too many misinterpretations of the article in one page of comments.

 

No where did the article state the 4S is doing better than the 5c. The article merely points out that despite the 5c being newly introduced at the same ON CONTRACT price point (not off contract), the 4S still sells. Not better, not well, not any specific measure...just that it continues to sell.

 

Really? I'll need you to interpret this for me then:


"Wolf estimates that the iPhone 5s accounted for 71 percent of March quarter sales, while the iPhone 5c took just 4 percent. That means the iPhone 4S would have taken the remaining 25 percent of sales for the three-month span."

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post #31 of 91
Quote:
Originally Posted by jungmark View Post

Hey it's the "let's make the 5C sales look as bad as possible" reports. I doubt the 4S is outselling the 5C.

Don't be so sure. The look of the 4S is so much better than that of the 5C, that it just looks and feels like a better phone, despite the older electronics.
post #32 of 91
Quote:
Originally Posted by SpamSandwich View Post

There may come a time in Apple's future when it is possible for them to offer all of their hardware at far slimmer margins if the manufacturing process is improved to the point where an iPhone/"iDevice" is molded and assembled with no human hands in the process. It would flip the traditional model of Apple making their profits on hardware and incremental sales on software, but as high quality manufacturing improves, and device capability improves to the point where an iPhone is as important as owning a credit card, most of the profits may come from software and services going forward...it could be that post-artificial intelligence, services will be everything!

Nonsensical gobbledy goop. IMHO

post #33 of 91
Quote:
Originally Posted by Rogifan View Post

Can someone explain how this guy would know the breakdown of iPhone sales by model? Apple doesn't release that information so where is he getting it from?

They get data from retailers worldwide, and also talk to suppliers and look at their sales of products.
post #34 of 91
Quote:
Originally Posted by reydn View Post

Agreed. How was the 5c the 2nd and 3rd best seller on all US carriers, but way behind 4s sales? I know, developing markets may opt for the 4s, but to be the #2 phone on the US would be hard to overpass

These days, sales in the USA are just over 20% of worldwide sales of most any major product. So what is happening here has just a relatively minor effect overall.

But what isn't being taken into account here is the fact that Apple had brought the 4 back from retirement for third world countries, and it was responsible for a doubling of sales in India and a number of other places. That phone was just again removed a few weeks ago. So it's possible that some of those 10 million in sales should be attributed to the older 4.
post #35 of 91
Quote:
Originally Posted by 512ke View Post

I love my 4S but those prices feel too high given what you can buy for the same money on the Android side. Just saying.

I wish Apple would introduce new phones and drop the price of the 4S by half.

 

Wish all you want. It’s not going to happen. If you don’t know Apple’s business model by now you never will. They are NOT interested in the low margin race to the bottom. It takes a lot of time and money to provide the superior customer service Apple offers with its products. It takes a lot of time and money to develop the hardware and software Apple is famous for. To support both and make a profit it takes healthy margins. Ask yourself this. If you could get a really cheap, bottom of the barrel iPhone would you be willing to give up the customer service, the iOS development to pay for the low price and low profit margin? 

 

I want both and I’m willing to pay for it. So were over 200 million others.

post #36 of 91
When iphone 4 came out, it was all around good sized iPhone including balanced ratio of length-width screen size. When apple came out with iphone 5, it was freaking screwed up screen size. Apple extended length(tall) of screen size but width was same as iphone 4s. Many users like iphone 4/4s balance screen size so much that many never migrated to iphone 5/5s and still buying 4x iphone. Hope, when iphone 6 comes out, apple just take iphone 4/4s screen and proportionally extend length and width where it doesn't just get tall screen but also provides good width. Look at ipad and ipad mini proportional(length to width) screen size and compare with iphone 5/5s. No wonder iphone 4/4s still loved by many in world.
post #37 of 91
I bought my first iPhone which happens to be a 4S the day it was available in my country. Two years later, it still feels like new. In my humble opinion, it may be the best iPhone/phone every built.

The touch ID in iPhone 5s is absolutely nice though. However it feels less robust than my iPhone 4S.

Very first comment after reading you guys all these years.
post #38 of 91
Quote:
Originally Posted by pmz View Post

The reasoning for its popularity has two undeniable driving factors: Price & Size.
For me it is all about size though I know many consider price to be a factor. My frustration with Apple is that they don't update this form factor anymore. I really don't want a phone that I have to carry in a holster because my pockets aren't big enough.
Quote:
While Price is going to be a driving factor, I'm sure there are people out there that simply want a smaller device.
Yep. I'm waving my hands in the air right now in the hopes that Apple is reading this. I have not upgraded my 4 yet because I don't want a jumbo phone. I'm waiting for Apple to give me a real upgrade to the 4 form factor
Quote:
While I don't expect Apple to continue to offer 3.5" screens forever, its worth noting that the 4" display size is going to remain important for years to come, even if the flagship device is only available as 4.7".
My concern with Apple is that they are chasing fads and not watching out for the bulk of the market. My iPhone isn't expected to do the things my iPad does. In fact I don't want to give up the ultra portability that the iPhone represents.
Quote:
I still think Apple should be redesigning and producing a new 4" model to accompany this year's 4.7" model.

I for one have no desire to lug around a huge cell phone in my pocket. I really hope that Apple is paying attention to what customers want here and not what a few analyst insist that they build. Apple needs a range of cell phones and needs to give up on the one pony show.

As for this report, the numbers are probably bogus, from what I understand the 5C is selling a lot better than this report implies.
post #39 of 91
Quote:
Originally Posted by SpamSandwich View Post

There may come a time in Apple's future when it is possible for them to offer all of their hardware at far slimmer margins if the manufacturing process is improved to the point where an iPhone/"iDevice" is molded and assembled with no human hands in the process. It would flip the traditional model of Apple making their profits on hardware and incremental sales on software, but as high quality manufacturing improves, and device capability improves to the point where an iPhone is as important as owning a credit card, most of the profits may come from software and services going forward...it could be that post-artificial intelligence, services will be everything!

What do toy mean by "far slimmer margins"? Slimmer margins mean less profit. I don't see Apple doing that. They would need to sell far more software to make up for those lower margins, and the trend with Apple over the years has been to lower software prices, and to give otherwise paid software away for free. Software has always been, and will likely continue to be the way Apple pulls customers into their system.

So while software maintains ultra high margins for software makers such as Adobe and Microsoft, Apple just uses it as a come on, as they have now done with iWork.

Services such as payments will give them very small margins because they will be competing with the major traditional payment services. There is no way the can work around that. Merchants won't use a system that charges more, which is why Amex isn't accepted everywhere.
post #40 of 91
imo this have nothing to do with design and everything to do with price... if they can drop the 5c to $400 or less it will boost there sales a lot.
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