Except according to Tim Cook on numerous earnings calls the percentage of users on a 6/6 Plus was around 30%. He was using that data to argue that there was still a lot of upgrade potential with the 6S. Considering how well the SE has done (Cook said it was doing better than they expected) I think an argument could be made that people are waiting for an iPhone that has a bigger screen but the overall size of the device is smaller. There are rumors Apple is doing away with the physical home button. Once that happens it's possible the top and bottom bezels on the phone can shrink making the overall device smaller.
show me the quote. I doubt it was 30% during the last conference call.
there is still no proof that people are waiting significantly longer to upgrade.
This is what Tim said on the Q3 2015 earnings call:
In terms of the percentage of customers that have upgraded to a 6 and 6 Plus versus that have not upgraded, it's 73%, or meaning that 27% of the installed base of customers prior to the launch of 6 and 6 Plus have now upgraded. And so we view that as a very bullish sign on the future, that there's a lot of headroom left for upgraders. We also are incredibly happy to see the highest Android switcher rate that we've observed. And so from our point of view, the iPhone is doing outstanding.
On the Q4 2015 earnings call Cook pegged 6/6 Plus upgrades in the low 30s
We don't guide beyond December, as you know Toni. I do think that the sort of the macro things that I spoke about earlier, the upgrade programs, the Android Switcher rate, the iPhone momentum in the emerging markets and the LTE penetration in these markets these trends are not one quarter things. These are longer term things. The same – my same response applies and I think we'll do quite good in iPhone. I do believe we'll grow this quarter as we put in our guidance that when you start with a number in the low 30s in terms of the percentage of the installed base that’s upgraded that had a phone pre the iPhone 6 and 6 Plus, that number still likely to leave a lot of headroom beyond December.
On the Q1 2016 earnings call it was up to 40%
Yeah. So, last question first. The number of people who had an iPhone prior to the iPhone 6 and 6 Plus announcements -- and so this was in September of 2014 that have not yet upgraded to a 6, 6 Plus or 6s or 6s Plus is now 60%. So, another way to think about that is 40% have, 60% have not.
Tim didn't mention what this figure was on the Q2 2016 earnings call and I don't have a transcript for the Q3 call. But I think it's highly likely that close to 50% of the install base that doesn't own a 6 haven't upgraded to a 6S. Why might that be? As I speculated it could be that smartphones are good enough now that upgrade cycles are getting longer. Perhaps the demand for much bigger phones wasn't as big as everyone thought, at least outside of China (or people wanted larger screens, not larger phones overall). Or maybe some weren't crazy about the design of the 6 so stayed with their 5/5S. But this notion that upgrade cycles aren't getting longer is laughable. They are in pretty much every hardware product Apple sells. And that's because the screens are good enough and the processors are fast enough. The only thing that could trigger a big upgrade cycle is a massive camera improvement or a radical new design.
One reason we're off the 2 year upgrade cycle is because it used to be if you didn't get a new phone you were wasting money since AT&T was just pocketing the subsidy.
Now, we're replacing them as needed. Which could be every 3-4 years. Our main uses are youtube, iMessage, email, phone calls and a couple fitness apps.
This is true. With iPhone upgrade program and programs like AT&T Next one your phone is paid off you're no longer paying that monthly installment piece. In the past it was just baked in to your overall bill and your bill didn't go down once the phone was paid for. That absolutely could lengthen upgrade cycles.
First of all, how reliable is the "research data"? Anybody can make one. Secondly, I don't see this as news, let alone a bad news. Apple has never intended, and will never plan to, win in marketshare. It's in their characteristic to create "elegance" phone that people actually enjoy to use, not throwing in all the latest techs or conquer any marketshare. When it does something technologically new or when their marketshare increases, Apple would acknowledge it - but that's not their main objective.
Wait so Apple is really doomed this time? I'm just amazed that this company is still in business after all the times it's been doomed.
Here the interesting part, look at the stock it keeps going up, it is stuck at 109 because it needs some amount of moment to break through the 110 number, once through it will got to 120 at the next resistance point. These guys keep coming out saying Apple is dropping market share but the market is reacting the other way, the market does not believe these reports.
The "point of resistance" nonsense is just stock trader mythology. Nearly every one of them trades based on fear or greed.
I refuse to buy a new iPhone until it is both larger and smaller than my 6S. It must charge using mind control, and the battery must provide 7 days of heavy use while underwater. It must run the full desktop version of Photoshop, support a USB mouse, and project VR directly into my retinas. Oh, and the Plus version needs to write all my Yelp reviews for me while I eat.
Am I missing anything?
Of course it's eroding. It's been a while since an iPhone update, and what do you know, we will have the iPhone 7 coming out soon. But it's more than just that. Let's face it. We are harder to "wow" now. We all remember fondly being wowed when Steve was around, but our expectations were a tad lower then. And now we have advanced tech coming out from Apple's competitor's while Apple isn't even matching that tech, more less beating it; so of course there will be customer defection because of that.
I think the iPhone 7 will provide a sales boost, but it likely won't skunk Samsung on features. Rumors indicate that Apple won't even match Samsung on features (e.g., AMOLED, curved screen, wireless charging?) until the 2017 iPhone, but that assumes they skip the "S" update and call it iPhone 8.
Perhaps Apple is just waiting for some key new tech to come out before they really spruce up the iPhone. But none of us know that, so the perception is that Apple is doing little to nothing. Hopefully they are putting all that money and all those employees to good use and making something that will really knock our socks off again.
It is funny how people simply dismiss anything negative about Apple here. And downvote them into oblivion. Apple isn't immune to the the law of physics, and isn't immune to global economical headwind. You cant expect for the top % of market to grow forever. What Apple needs to do now is continue to fight and retain the top % of market, ( Which they did successfully ), and slowly eat into the mid range market. The global market has been greatly helped ( like it or not ) by China economical growth, but i think we are running out of steam. What happen in 2008, and then QE has only been delaying the inevitable global recession.
It doesn't mean Apple is doomed, FAR FROM IT. It just means growing iPhone marketshare will be next to impossible in these situation.
I doubt it. The 90% figure was for last year when the Samsung profits were at a very low level due to low sales figures of the S6. But now the profits of Samsung mobile phone division has increased significantly thanks to the successful S7. The profits of the iPhone has decreased slightly. So most probably Apple has still the majority of the profits in the order of 50 to 60 percent.
This is the same kind of bullshit "data" we had to deal with in the 1990s when Macs were %25 of consumer desktops and these BS artists were claiming Windows had %97 marketshare-- in part by not counting most mac sales.
All, and I mean effing ALL of these android numbers are simply MADE UP.
Only Apple reports actual sales. The rest are mostly feature phone sales.
Why does Apple Insider print known false anti-apple propaganda as fact?
This has been going on for decades now. There is no excuse.
It is time that you get down to earth. Android phones of $200 of 3 years were indeed crappy phones that could no be compared to an iPhone. But if today buy an Android phone of $200 (e.g. a Moto G), you will discover that these are excellent phones that they run apps just as smooth as an iPhone. On some points they are worse than an iPhone, but on other points they are better or have features that an iPhone lacks.
Your reference to feature phones is pathetic. Go to any phone shop in any western country and you will have to look very hard to find a feature phone.
Obviously Apple isn't in any trouble, yet. However, they could be, soon.
Why? It's all a matter of scale. Currently for each iPhone sold there's 5 Androids getting the hands of the population. A basic Android device is an amazing product, not crap. What happens is even if the majority of those users barely use their phones for anything other than ocasional browsing, email, facebook and some free games, they are the valuable users of tomorrow.
Besides, let's not fool ourselves into thinking that the average cheap Android phone doesn't satisfy the needs of the average population, even the average iOS user. The iPhone is overkill for the vast majority of buyers, that's why the 16GB version still sells. 7 or 8 out of 10 iPhones being sold all have 16 GB of storage. That says a lot about Apple and users overall.
There's a balance here. Obviously Apple's problems aren't related with engineering talent and innovation: - The team that made their storage solutions are the best, but the issue with the company are the bean counters that think that 16 GB is good enough on a flagship.
So, iPhone sales are dropping in the double digits. Fact. Also, iPad sales are still dropping. Fact. And Mac sales are also dropping. Fact.
It's my opinion (worthless) that the main reason for this is that devices are lasting longer. That is great, because it adds value to them. If an user sees value, they will come back. However, 7 or 8 out of those iOS users have less than 32 GB on their devices. That's how many frustrating users? Will they come back? I know my position, and I know that my position by itself is worthless. But I read. I see. I watch. I hear. People are pissed off and frustrated. People realized that, more than ever, the obvious money-grabs are impacting the experience.
So, as companies find ways to profit from all users and the Android ecosystem and userbase just keeps growing exponentially faster than iOS, it may come to a point when iOS isn't first class citizen. When that happens, and without growth, there's no turning back. It already is a one horse race in the vast majority of markets.
Again, let's hope people at Apple aren't foolish to think that anyone buying a 200$ Moto G with a Micro-SD card will be buying crap, because if they do, they are finished soon.
As I see it, there's only one way to make iOS a pillar: - Sacrifice some of the aura (that, at this point, shouldn't exist); - Stop being pathetic bean counters so high end sales don't suffer (Why so little RAM? What about storage? What about TN panels on Airs? What about non-SSD options on Macs? What about not updating your machines, even if the improvements are minor?); - Apologize, beg, crawl and target the pro and edu market again. - Actually focus on the 80 % of the population that doesn't buy any Apple product.
The first 3 will decide if Apple is a valuable company for decades to come, but the last one will keep being more than a niche-company. Like it or not, those 80% will always matter more and be more relevant than the 20%.
Also: -Remember when Apple used to actually be aggressive and corner the market on key components? - Remember when Apple was willing to pay intel to be first in line to receive new processors, because their users were worth it? - Remember when Apple used to introduce insane products that were used to bring tech prices down so they could adapt them and implement them trough the product line? - Remember when Apple pushed forward on high PPI screens, storage sizes on mobile and so on?
Now it's the opposite. It's all about profit margin per device today, at all costs. And it is biting them in the ass. It's hurting their overall profits TODAY because their sales are dropping like a stone. And their sales are also dropping because most of their products is subpar and inferior.
Overall, an Air is subpar. A 16 GB iPhone is subpar. A 1 yo 13" rMBP is subpar. a 2YO 15" rMBP is subpar. Any Mac with a HDD is trash. Any 3 YO nMP is subpar. What are they investing on? They dumped Aperture, iWeb, iWork is subpar compared with 09 version. There's almost no pro Mac market yet.
90% of their products are subpar, at this time.
And all of those talking about they making the majority of profits... Not anymore. And their key competitors (Samsung Electronics, Google, Facebook, MS) are only getting more successful. Heck, Samsung Mobile profits are 3 or 4 quarters away to surpass Apple's iPhone. Samsung Electronics is already close to Apple overall.
And after this... They released the Phone that is being praised by pretty much any respectable news publication as the best big phone on the market, if not the best phone ever. Why? Samsung learned, experimented and wasn't pathetically conservative. 64 GB standard. Useful features like waterproof. A top Notch screen superior on every metric. Same for camera. They have no issues producing dozens of millions of them.
But can they make 60 % net profit per each note? No, but it's paying off alright and Apple is the one with their profits going down.
Value. Scale. Balance.
Summing up, and I agree, on the Macs Apple have waited to long to upgrade. Connected to that, and separate, Apple feels greedy. I often get the feeling they are in it for the money, and less to have a profound impact on our lives. I agree, and I am amazed, how well Apple are able to make money from practically anything they start with, but oftentimes, lately, I get the feeling they first look at revenues, then at how well the stuff is for the customer.
T-Mobile has had a ton of deals giving away Galaxy S7's for free. Get on a contract get a free S7... Get up to 4 free S7's when switching over. Smacks of a desperate Sammy. Let them give their shit away. Who cares about market share. That's all just about appearances. Profit share is the key data point.
T-Mobile has had a ton of deals giving away Galaxy S7's for free. Get on a contract get a free S7... Get up to 4 free S7's when switching over. Smacks of a desperate Sammy. Let them give their shit away. Who cares about market share. That's all just about appearances. Profit share is the key data point.
Well, I agree that making a profit is very important. And Apple has been doing that better than any other tech company. But a big strength of Apple is/was their commitment to me, the customer, to provide the best (for, obviously, a price). I'm not feeling this part of the deal so much nowadays.
T-Mobile has had a ton of deals giving away Galaxy S7's for free. Get on a contract get a free S7... Get up to 4 free S7's when switching over. Smacks of a desperate Sammy. Let them give their shit away. Who cares about market share. That's all just about appearances. Profit share is the key data point.
Does this mean that you haven't kept up with the news and have absolutely no idea of what your are talking about? Today, Apple is just a bit more successful than Samsung at profiting from phones. And while Samsung Mobile is exploding in profit growth (Making Samsung Electronics almost as profitable as Apple on the last quarter) Apple is going down on the double digits.
You do the math.
And while we are here, Samsung just announced the best phone of all time, by the well known and respected critic's opinions. Yes, the Note 7 might not be as fast as the 6s, but is fast enough while being better on any other metric, from design to screen to camera to useful features, like waterproofing (ip68).
But that's peanuts. Apple has iOS. The big issue here is just that the bean counters at Cuppertino are focussed on profit margin per device, today, at all costs. And it is killing Apple. I don't know what more users here need:
- All products are down. Profits are down. Market share is dangerously close to Windows Vs Mac. iOS not being first class citizen is dangerously close. Will Apple be successful and a viable company? Most likely.
Will they be relevant, trend settler and mainstream, huge? No, no, no. Unless they stop the pathetic, artificially gimped high end products (16 GB, 2 GB of RAM, TN panels, 5400rpm hard drives, no updates for years) and also target the rest of the 85% of the world's population.
Otherwise, iOS will be nothing more than a footnote, an afterthought, a niche, like OS X was.
If I was one of those amazingly talented engineers that made the NVMe storage solution on iPhones, or the A series chips, or some of the most successful designers... I would punch Tim Cook in the face and leave to a company where engineering chops and talent are actually valorized.
Imagine having the fastest storage, best chip... And artificially gimp the device with 16 GB of that storage or 1 or 2 GB of RAM so all of that potential goes to nothing? Yeah, good luck keeping that talent once profits drop to a point where "restructuring" starts to circle around.
One reason we're off the 2 year upgrade cycle is because it used to be if you didn't get a new phone you were wasting money since AT&T was just pocketing the subsidy.
Now, we're replacing them as needed. Which could be every 3-4 years. Our main uses are youtube, iMessage, email, phone calls and a couple fitness apps.
This is true. With iPhone upgrade program and programs like AT&T Next one your phone is paid off you're no longer paying that monthly installment piece. In the past it was just baked in to your overall bill and your bill didn't go down once the phone was paid for. That absolutely could lengthen upgrade cycles.
This. And also the perception that people were paying $200 / $300 / $400 / $500 for an iPhone back when they were on contracts, but are now paying $650 / $750 / $850 / $950 (or a monthly equivalent) with these no-contract cellular plans. For price conscious consumers with multiple phones, the mere perception of higher out-of-pocket costs might be a roadblock to them upgrading.
This is true. With iPhone upgrade program and programs like AT&T Next one your phone is paid off you're no longer paying that monthly installment piece. In the past it was just baked in to your overall bill and your bill didn't go down once the phone was paid for. That absolutely could lengthen upgrade cycles.
This. And also the perception that people were paying $200 / $300 / $400 / $500 for an iPhone back when they were on contracts, but are now paying $650 / $750 / $850 / $950 (or a monthly equivalent) with these no-contract cellular plans. For price conscious consumers with multiple phones, the mere perception of higher out-of-pocket costs might be a roadblock to them upgrading.
Except that most carriers, in the US at least, don't quote the full price of the phone. If you go to their website you just see the monthly payment amount of $27 or whatever it might be. I don't think people really believed their phone only cost $199 but now once that monthly installment fee goes away I think people might be less likely to upgrade. Phones are good enough now.
This. And also the perception that people were paying $200 / $300 / $400 / $500 for an iPhone back when they were on contracts, but are now paying $650 / $750 / $850 / $950 (or a monthly equivalent) with these no-contract cellular plans. For price conscious consumers with multiple phones, the mere perception of higher out-of-pocket costs might be a roadblock to them upgrading.
or they could pay $0 with Apple leasing or any of the other dozens of $0 down plans offered by the carriers.
80% of iPhones sold worldwide are without contracts. This fear mongering is total BULLSHIT.
Price conscious consumers don't buy iPhones. They buy Android junk.
Outside of the camera I can't think of one thing that would tempt me to upgrade to the iPhone 7. My 6S works great, is plenty fast and I don't have issues with battery life. I don't think I'm the only one that thinks my phone is good enough.
T-Mobile has had a ton of deals giving away Galaxy S7's for free. Get on a contract get a free S7... Get up to 4 free S7's when switching over. Smacks of a desperate Sammy. Let them give their shit away. Who cares about market share. That's all just about appearances. Profit share is the key data point.
According to your logic Apple must be desperate then, which given the story about them putting the squeeze on suppliers, they may well be:
AT&T on Friday launched a new "Buy One Get One Free" promotion for the Galaxy S6, Galaxy Note 5 and select other Samsung smartphones, and MacRumors has learned the deal also applies to the iPhone 6s and iPhone 6s Plus.
Beginning today until December 31, 2015, AT&T customers who activate
or upgrade to an iPhone 6s or iPhone 6s Plus on AT&T Next are
eligible to receive a second 16GB iPhone 6s for free, or a $650 bill
credit towards the purchase of another iPhone 6s or iPhone 6s Plus
model.
Does this mean that you haven't kept up with the news and have absolutely no idea of what your are talking about? Today, Apple is just a bit more successful than Samsung at profiting from phones. And while Samsung Mobile is exploding in profit growth (Making Samsung Electronics almost as profitable as Apple on the last quarter) Apple is going down on the double digits.
Oh stop with your absolute BULLSHIT.
Samsung's mobile division isn't making close to Apple's earnings.
In the holiday quarter Apple will make almost $25 billion in operating profit.
Last quarter Apple's profits were 165% higher than Samsung. That isn't a bit more successful. THAT'S WAY MORE SUCCESSFUL. AND THAT'S WHY APPLE IS WORTH 2X MORE THAN SAMSUNG RIGHT NOW.
Maybe you should read slower.
Samsung Mobile is growing at a fast pace, and they made 3.8 B$ on operating profit. The responsible? S7. How much did Apple made from iPhones? And what is the tendency here? The tendency is for Apple to drop YoY in the double digits. What is Samsung's Mobile tendency? Growth.
In fact, dropping in net profit and dropping sales of all of their products is Apple's tendency for quarters to come. Fact. Can you dispute that?
Samsung Eletronics, like I correctly said, is growing quickly and will soon surpass Apple even on the net profits department, while also offering better products. They are 2 B$ away (max) to surpass Apple's net profit, while growing fast and Apple declining.
I apologize for thinking that having a better screen on every metric, better camera on every metric, better connectivity on every metric, useful features like fast charging and waterproofing, 64 GB of base storage makes the S7 and Note 7 a far better phone than the iPhone, at least for 9 out of 10 costumers. Yeah, Samsung doesn't need 60% net profit per device sold to be successful. For some strange reason, Apple thinks they do.
Yeah, we could talk about privacy and such, but that has nothing to do with offering 16 GB offerings or computers with TN panels or 5400 rpm hard drives. Besides, 9 out of 10 smartphone users use google services and/or Facebook anyway.
Comments
On the Q4 2015 earnings call Cook pegged 6/6 Plus upgrades in the low 30s
On the Q1 2016 earnings call it was up to 40%
Tim didn't mention what this figure was on the Q2 2016 earnings call and I don't have a transcript for the Q3 call. But I think it's highly likely that close to 50% of the install base that doesn't own a 6 haven't upgraded to a 6S. Why might that be? As I speculated it could be that smartphones are good enough now that upgrade cycles are getting longer. Perhaps the demand for much bigger phones wasn't as big as everyone thought, at least outside of China (or people wanted larger screens, not larger phones overall). Or maybe some weren't crazy about the design of the 6 so stayed with their 5/5S. But this notion that upgrade cycles aren't getting longer is laughable. They are in pretty much every hardware product Apple sells. And that's because the screens are good enough and the processors are fast enough. The only thing that could trigger a big upgrade cycle is a massive camera improvement or a radical new design.
I think the iPhone 7 will provide a sales boost, but it likely won't skunk Samsung on features. Rumors indicate that Apple won't even match Samsung on features (e.g., AMOLED, curved screen, wireless charging?) until the 2017 iPhone, but that assumes they skip the "S" update and call it iPhone 8.
Perhaps Apple is just waiting for some key new tech to come out before they really spruce up the iPhone. But none of us know that, so the perception is that Apple is doing little to nothing. Hopefully they are putting all that money and all those employees to good use and making something that will really knock our socks off again.
People will try anything.
Apple isn't immune to the the law of physics, and isn't immune to global economical headwind. You cant expect for the top % of market to grow forever.
What Apple needs to do now is continue to fight and retain the top % of market, ( Which they did successfully ), and slowly eat into the mid range market.
The global market has been greatly helped ( like it or not ) by China economical growth, but i think we are running out of steam. What happen in 2008, and then QE has only been delaying the inevitable global recession.
It doesn't mean Apple is doomed, FAR FROM IT. It just means growing iPhone marketshare will be next to impossible in these situation.
Your reference to feature phones is pathetic. Go to any phone shop in any western country and you will have to look very hard to find a feature phone.
You do the math.
And while we are here, Samsung just announced the best phone of all time, by the well known and respected critic's opinions. Yes, the Note 7 might not be as fast as the 6s, but is fast enough while being better on any other metric, from design to screen to camera to useful features, like waterproofing (ip68).
But that's peanuts. Apple has iOS. The big issue here is just that the bean counters at Cuppertino are focussed on profit margin per device, today, at all costs. And it is killing Apple. I don't know what more users here need:
- All products are down. Profits are down. Market share is dangerously close to Windows Vs Mac. iOS not being first class citizen is dangerously close. Will Apple be successful and a viable company? Most likely.
Will they be relevant, trend settler and mainstream, huge? No, no, no. Unless they stop the pathetic, artificially gimped high end products (16 GB, 2 GB of RAM, TN panels, 5400rpm hard drives, no updates for years) and also target the rest of the 85% of the world's population.
Otherwise, iOS will be nothing more than a footnote, an afterthought, a niche, like OS X was.
If I was one of those amazingly talented engineers that made the NVMe storage solution on iPhones, or the A series chips, or some of the most successful designers... I would punch Tim Cook in the face and leave to a company where engineering chops and talent are actually valorized.
Imagine having the fastest storage, best chip... And artificially gimp the device with 16 GB of that storage or 1 or 2 GB of RAM so all of that potential goes to nothing? Yeah, good luck keeping that talent once profits drop to a point where "restructuring" starts to circle around.
This. And also the perception that people were paying $200 / $300 / $400 / $500 for an iPhone back when they were on contracts, but are now paying $650 / $750 / $850 / $950 (or a monthly equivalent) with these no-contract cellular plans. For price conscious consumers with multiple phones, the mere perception of higher out-of-pocket costs might be a roadblock to them upgrading.
Samsung Mobile is growing at a fast pace, and they made 3.8 B$ on operating profit. The responsible? S7. How much did Apple made from iPhones? And what is the tendency here? The tendency is for Apple to drop YoY in the double digits. What is Samsung's Mobile tendency? Growth.
In fact, dropping in net profit and dropping sales of all of their products is Apple's tendency for quarters to come. Fact. Can you dispute that?
Samsung Eletronics, like I correctly said, is growing quickly and will soon surpass Apple even on the net profits department, while also offering better products. They are 2 B$ away (max) to surpass Apple's net profit, while growing fast and Apple declining.
I apologize for thinking that having a better screen on every metric, better camera on every metric, better connectivity on every metric, useful features like fast charging and waterproofing, 64 GB of base storage makes the S7 and Note 7 a far better phone than the iPhone, at least for 9 out of 10 costumers. Yeah, Samsung doesn't need 60% net profit per device sold to be successful. For some strange reason, Apple thinks they do.
Yeah, we could talk about privacy and such, but that has nothing to do with offering 16 GB offerings or computers with TN panels or 5400 rpm hard drives. Besides, 9 out of 10 smartphone users use google services and/or Facebook anyway.