Inside Apple's iPhone 4S: 'S' is for Sales

Posted:
in iPhone edited January 2014
Already drawing record preorders and long lines, Apple's just-launched iPhone 4S is poised to become the best selling smartphone yet in the history of the company.



Leading up to today's launch of the iPhone 4S, AppleInsider has been offering a closer look at some of the features of the next-generation handset. Given that the 'S' in the device's moniker was never officially defined by Apple, five potential definitions have been offered.



Today's conclusion isn't about features, but instead the explosive and continued growth of the iPhone platform -- a trend that's expected to carry on with the iPhone 4S. Today, 'S' is for Sales.



iPhone 4S: A longer wait



Since debuting in 2007, the iPhone has soared high on continued hype -- and a booming smartphone market -- to become the highest-selling, most profitable device in the company's portfolio. It's an upward trend that has continued, without fail, with every new iPhone model introduced.



But this year has been different. Though iPhone hardware has historically been introduced in June at Apple's annual Worldwide Developers Conference, Apple opted to wait until October to hold a special event and unveil the iPhone 4S.



With four months added to the life cycle of the iPhone 4 as the premier smartphone in Apple's lineup, the rumor mill was given even more time to dream up what the company's next iPhone might feature. Some of the rumors were plausible, like a redesigned appearance; others were questionable, like a brand new cheaper iPhone model for emerging markets; and some were out of left field, like a last-minute claim that a redesigned "iPhone 5" would be exclusive to Sprint, the third-largest wireless carrier in the U.S.



Leading up to last week's unveiling of the iPhone 4S, no one outside of Apple could say with certainty what was going to be unveiled. And with outlandish claims aplenty, initial reaction by some enthusiasts who invest in rumors was one of disappointment.



In that respect, to some, the final 'S' in this series could also stand for "Same," as in, the iPhone 4S has the same design as the iPhone 4. But so far there's been no evidence that the general public -- the masses who buy millions of iPhones -- are at all bothered that the iPhone 4S looks and feels just like its predecessor.



In fact, there's plenty of evidence to the contrary.



Graphic by Horace Dediu of Asymco.



Records already broken



The one-two punch of the iPhone 4S unveiling and the death of Steve Jobs in a span of just two days hadn't fully settled in by the time the iPhone 4S became available for preorder. Almost immediately, the iPhone 4S sold out for launch day delivery from Apple, and new orders were given an estimated arrival of one to two weeks.



A flood of interest from customers tested Apple's servers, as the company's website at times showed errors to customers and would not take orders. By later in the day on Friday, systems were once again running smoothly.



Then on Monday, Apple revealed that one million preorders for the iPhone 4S were sold on the first day. That's a new record for the company, which had a previous best of 600,000 iPhone 4 units sold in a single day in 2010.







The numbers suggest that this weekend the iPhone 4S should easily exceed Apple's record of 1.7 million iPhones sold over a three-day launch window. That too was set by the iPhone 4 in 2010.



The iPhone 4S has already had the strongest start of any iPhone yet, and next week Apple is expected to reveal that as many as 3 million units were sold over the weekend. But can the iPhone 4S maintain that momentum once the hype over a new product has died down?



iPhone 4S: How high can it go?



Tremendous growth has been par for the course with the iPhone since 2007. For example, in Apple's 2010 fiscal year, iPhone unit sales grew 93 percent year over year.



Apple is expected to have achieved a similar achievement this year, when its final quarter of fiscal 2011 is revealed by the company next Tuesday. In the company's previous quarter concluding in June, it recorded record sales of 20.34 million iPhones.



Sales for the September quarter, during which the iPhone 4 was Apple's high-end handset, will likely reflect consumer anticipation ahead of the next iPhone. For example, in the June quarter of 2010 when the iPhone 3GS was Apple's premier device, iPhone units were down sequentially as hype built for the iPhone 4.



But Apple's current quarter, which concludes in December, will reflect two and a half months of iPhone 4S sales, along with a potential bump from the holiday buying season. It's expected to be Apple's best quarter ever, with one projection calling for 25 million total iPhone sales in the three-month period.



Chart by Horace Dediu of Asymco.



In addition to a holiday sales boost, there are also a growing number of loyal iPhone users ripe for an upgrade. For example, many customers who purchased their iPhone 3GS with a two-year service contract are now seeing those contracts expire.



An overwhelming majority of iPhone users have consistently expressed satisfaction with Apple's handset. Because of that, a recent projection by Wall Street analyst Gene Munster with Piper Jaffray called for 18.8 million iPhone 3GS users to upgrade to Apple's iPhone 4S.



If history is any indication, Munster's assumptions will likely prove to be conservative, something he himself has admitted. For example, his figures call for Apple to sell 104.4 million iPhones in the company's 2012 fiscal year, a sum that would be just a 35 percent increase from 2011.



At this point it's not a question of whether the iPhone 4S will outsell the iPhone 4 and break new records for Apple -- that's expected. Instead, the question is: by how much will the iPhone 4S will surpass the iPhone 4 and continue Apple's tremendous growth? While the upgraded handset packs an impressive set of features with Siri, the A5 chip, an 8-megapixel camera and an improved antenna, it's the sales of the iPhone 4S that will ultimately determine its legacy.



A line of iPhone 4S customers are led in to Apple's Fifth Avenue store on Friday



For more, see the previous installments of AppleInsider's Inside Apple's iPhone 4S series, included below:



Inside Apple's iPhone 4S and its improved antenna: 'S' is for Signal



Inside Apple's iPhone 4S and its A5 CPU: 'S' is for Speed



Inside Apple's iPhone 4S and its 8MP camera: 'S' is for Shutter



Inside Apple's iPhone 4S: 'S' is for Siri voice recognition
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Comments

  • Reply 1 of 29
    airnerdairnerd Posts: 569member
    Mine is still on the truck for delivery, but this goes back to my original feeling way back when of "I hope this pent up demand doesn't make Apple feel that if they make people wait longer than 1 year for a product, the demand will be so great that they will get more free advertising".





    All this buzz, media coverage for free, and front page coverage is sure to make Apple want to wait 15-18 months between refreshes even more often.
  • Reply 2 of 29
    jj.yuanjj.yuan Posts: 212member
    Ordered one for my daughter on Monday at Verizon's site. According to the FedEx tracking, it could arrive today. Cheers!
  • Reply 3 of 29
    For me, S is for Steve. It will always be my way of remembering him.
  • Reply 4 of 29
    asdasdasdasd Posts: 5,131member
    Quote:
    Originally Posted by airnerd View Post


    Mine is still on the truck for delivery, but this goes back to my original feeling way back when of "I hope this pent up demand doesn't make Apple feel that if they make people wait longer than 1 year for a product, the demand will be so great that they will get more free advertising".





    All this buzz, media coverage for free, and front page coverage is sure to make Apple want to wait 15-18 months between refreshes even more often.



    I think they will go back to a mid-year announcement for a new form factor iPhone. Particularly to make sure supply meets demand.
  • Reply 5 of 29
    My preorder from Oct 7 is STILL showing "processing" and my credit card hasn't gotton hit yet. After 2 1/2 years with a 3G I'll be in tears if I'm one of the suckers that pre-ordered and now has to wait an extra 2 weeks.
  • Reply 6 of 29
    tjwaltjwal Posts: 404member
    Mine's on the delivery truck. Unfortunately no one is home so I might not get it until tomorrow.
  • Reply 7 of 29
    Quote:
    Originally Posted by mfterka View Post


    My preorder from Oct 7 is STILL showing "processing" and my credit card hasn't gotton hit yet. After 2 1/2 years with a 3G I'll be in tears if I'm one of the suckers that pre-ordered and now has to wait an extra 2 weeks.



    Did you order through Apple or AT&T? If Apple, go to www.UPS.com, click on tracking, click on "track by reference", and then put in the phone number tied to the payment method you used. It will show all incoming orders. According to Apple, my phone is still processing too, but I found it through the UPS site as on the truck for delivery.
  • Reply 8 of 29
    Quote:
    Originally Posted by asdasd View Post


    I think they will go back to a mid-year announcement for a new form factor iPhone. Particularly to make sure supply meets demand.



    Are you suggesting that we will see a new iPhone (5) in only 8-9 months from now? Not sure if that will make the current group of customers happy. More importantly, not sure what supply advantages would be gained from this (other than less people would be eligible the next time around). The previous iPhone releases (eg. 3G, 3GS, 4) all experienced some sort of supply issue (either mild or constrained) and they were all spring/summer releases.
  • Reply 9 of 29
    Quote:
    Originally Posted by kurtmac View Post


    Are you suggesting that we will see a new iPhone (5) in only 8-9 months from now? Not sure if that will make the current group of customers happy. More importantly, not sure what supply advantages would be gained from this (other than less people would be eligible the next time around). The previous iPhone releases (eg. 3G, 3GS, 4) all experienced some sort of supply issue (either mild or constrained) and they were all spring/summer releases.



    It will be interesting to see if the 4S keeps its luster through calendar quarters 1 and 2 in 2012. If not then a June intro for iPhone 6 might be necessary.



    Regardless of when it comes out... if Apple brings out an A6 phone with at least a 4" screen... they will never meet demand... ever.
  • Reply 10 of 29
    Quote:
    Originally Posted by island hermit View Post


    It will be interesting to see if the 4S keeps its luster through calendar quarters 1 and 2 in 2012. If not then a June intro for iPhone 6 might be necessary.



    Regardless of when it comes out... if Apple brings out an A6 phone with at least a 4" screen... they will never meet demand... ever.



    And they will have to get the carriers to allow early upgrade for 4S people, or they will have millions of pissed off customers.
  • Reply 11 of 29
    asdasdasdasd Posts: 5,131member
    Quote:
    Originally Posted by airnerd View Post


    And they will have to get the carriers to allow early upgrade for 4S people, or they will have millions of pissed off customers.



    well, what ya gonna do? There are people waiting for that eventuality. Its a crap shoot and the nature of technological change that something better is just a year, or less away.
  • Reply 12 of 29
    'S' is for Stop it already!
  • Reply 13 of 29
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by circling View Post


    For me, S is for Steve. It will always be my way of remembering him.



    That's exactly what just about everyone said or agreed with while waiting in line this morning to get my 4S activated.
  • Reply 14 of 29
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by island hermit View Post


    Regardless of when it comes out... if Apple brings out an A6 phone with at least a 4" screen... they will never meet demand... ever.



    If you are implying the converse, i.e., that Apple will meet demand if they don't bring out an iPhone with at least a 4", you are wrong?ever.
  • Reply 15 of 29
    Quote:
    Originally Posted by bloggerblog View Post


    'S' is for Stop it already!



    Second that.
  • Reply 16 of 29
    Quote:
    Originally Posted by bloggerblog View Post


    'S' is for Stop it already!







    We need votes in this forum!
  • Reply 17 of 29
    wovelwovel Posts: 956member
    Quote:
    Originally Posted by kurtmac View Post


    Are you suggesting that we will see a new iPhone (5) in only 8-9 months from now? Not sure if that will make the current group of customers happy. More importantly, not sure what supply advantages would be gained from this (other than less people would be eligible the next time around). The previous iPhone releases (eg. 3G, 3GS, 4) all experienced some sort of supply issue (either mild or constrained) and they were all spring/summer releases.



    Shortening their window and moving closer to the iPad 3 launch (which will likely use the same CPU), they can increase supply? It will not appreciably reduce demand.
  • Reply 18 of 29
    shompashompa Posts: 340member
    Quote:
    Originally Posted by kurtmac View Post


    Are you suggesting that we will see a new iPhone (5) in only 8-9 months from now? Not sure if that will make the current group of customers happy. More importantly, not sure what supply advantages would be gained from this (other than less people would be eligible the next time around). The previous iPhone releases (eg. 3G, 3GS, 4) all experienced some sort of supply issue (either mild or constrained) and they were all spring/summer releases.



    Apple can't think about current customers.



    Ipad 1 was released late November 2010 (where I live outside US) , just 3 month before Ipad2. I bough one knowing that Ipad2 was coming.



    Apple release stuff when its ready, That is was is so great about them. The iPhone4S delay was because of iOS5. Apple wanted a great operating system = 3 month beta testing. Compare that to Googles Android 3. They just rushed it out on tablets. Look at the reviews of Android 3.0 tablets: full of bugs. That is not tolerated by Apple.



    The question is when Iphone5 is ready and if its going to use iOS 6.



    Apples release schedule last couple of years have been: New Aclass processor with iPad in Feb-Mars. iOS beta release in Mars-April and new iOS + iPhone release in june.



    The hardware design of Iphone5 is ready. The teardrop macbook air iPhone is in the wild. Case manufactures got 3 independent sources of that = why they manufactured Iphone5 cases.



    A6 is technically possible Q1 2012 with 28nm TSMC ramping up. Qualcomm will have a 4G radio chip manufactured at 28m for use with iPad/Iphone.



    Technically Apple can release iPhone5 between mars and forward. The question is if they want to have iOS5 or iOS6 on it.



    Apple could also diversify its phone portfolio. A phone with larger screen could get the name iPhone Air = no angry Iphone4S buyers.



    The iPhone mini? It has been rumors about it for at least 2 years. Wonder if Apple will sign off on that idea. There have been some leaked part so Apple probably have prototypes at least a year.
  • Reply 19 of 29
    asdasdasdasd Posts: 5,131member
    Quote:
    Originally Posted by Wovel View Post


    Shortening their window and moving closer to the iPad 3 launch (which will likely use the same CPU), they can increase supply? It will not appreciably reduce demand.



    It will reduce demand compared to the holiday quarter. A new form factor this month would have been supply constrained. Demand is also reduced if it comes close to the release of the 4S.
  • Reply 20 of 29
    shompashompa Posts: 340member
    Quote:
    Originally Posted by airnerd View Post


    And they will have to get the carriers to allow early upgrade for 4S people, or they will have millions of pissed off customers.



    So every Android buyer is pissed off?



    Technology moves forward. Apple can't hold of release of new product because early adopters is "pissed off".



    The customer have to choose if the new features are worth an upgrade.



    Iphone5: 4G, 12MP camera, NFC, larger screen?, redesign.



    I personally have 2 telephone contracts so I can buy an iPhone every year. The unused SIM I put into my iPad. The old phone I give to a loved one (and its appreciated by them).

    Its worth 30 dollar/month for me.
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