Rising iPhone browser share points to sales of 5 million 3G units
The iPhone's share of the worldwide browser market has increased nearly twofold following the release of the iPhone 3G last month, leading researchers at PacificCrest to suggest that September quarter sales of the device may be tracking 1.5 million units ahead of expectations.
In a report to clients Tuesday, analyst Andy Hargreaves cited data from Net Applications that shows the iPhone's share of the global browser market to have accelerated to 0.31 percent from 0.16 percent since the July 11th launch of the iPhone 3G.
Should the trend continue through the remainder of the quarter (ending September 30th), it would suggest upside of approximately 1.5 million units to his previous estimate of 3.5 million iPhone sales.
"iPhone?s share of Internet browsing is now four times that of Windows Mobile and nearly 40 percent of Linux?s share," Hargreaves wrote. "Over the long term, we expect iPhone?s advantages to drive strong hardware revenue growth, while providing new opportunities to monetize the user base through value-added services."
More specifically, the analyst said the iPhone's share of the browser market has grown nearly 100 percent in the four countries that had access to the original iPhone. Meanwhile, the 17 countries that did not have the original iPhone have seen browser share increases range from 50 percent to 1,100 percent.
"iPhone 3G has generated its most impressive increase in browsing in Japan, where its share has grown to 0.12 percent from 0.01 percent over the past six weeks," he wrote.
In support of his latest estimates, Hargreaves noted a strong correlation between growth in iPhone browser share and unit sales over the past year. For instance, Apple sold 2.3 million iPhones in the previous December quarter and saw its browser share increase by 0.05 percent.
With the iPhone's share having risen another 0.15 percent in just six weeks following the release of the 3G model, current estimates of 3.5 million unit sales therefore seem overly conservative, or about 1.5 million units shy.
"Notably, Apple will be launching iPhone in 20 new countries on Aug. 22 and will be distributing through Best Buy starting on Sept. 7, which could drive further upside to our [September] quarter estimate," the analyst added.
Hargreaves, who maintains an Outperform rating and $235 price target on shares of Apple, estimates that each incremental 1 million iPhone units will generate and additional $0.28 in free cash flow per share.
In a report to clients Tuesday, analyst Andy Hargreaves cited data from Net Applications that shows the iPhone's share of the global browser market to have accelerated to 0.31 percent from 0.16 percent since the July 11th launch of the iPhone 3G.
Should the trend continue through the remainder of the quarter (ending September 30th), it would suggest upside of approximately 1.5 million units to his previous estimate of 3.5 million iPhone sales.
"iPhone?s share of Internet browsing is now four times that of Windows Mobile and nearly 40 percent of Linux?s share," Hargreaves wrote. "Over the long term, we expect iPhone?s advantages to drive strong hardware revenue growth, while providing new opportunities to monetize the user base through value-added services."
More specifically, the analyst said the iPhone's share of the browser market has grown nearly 100 percent in the four countries that had access to the original iPhone. Meanwhile, the 17 countries that did not have the original iPhone have seen browser share increases range from 50 percent to 1,100 percent.
"iPhone 3G has generated its most impressive increase in browsing in Japan, where its share has grown to 0.12 percent from 0.01 percent over the past six weeks," he wrote.
In support of his latest estimates, Hargreaves noted a strong correlation between growth in iPhone browser share and unit sales over the past year. For instance, Apple sold 2.3 million iPhones in the previous December quarter and saw its browser share increase by 0.05 percent.
With the iPhone's share having risen another 0.15 percent in just six weeks following the release of the 3G model, current estimates of 3.5 million unit sales therefore seem overly conservative, or about 1.5 million units shy.
"Notably, Apple will be launching iPhone in 20 new countries on Aug. 22 and will be distributing through Best Buy starting on Sept. 7, which could drive further upside to our [September] quarter estimate," the analyst added.
Hargreaves, who maintains an Outperform rating and $235 price target on shares of Apple, estimates that each incremental 1 million iPhone units will generate and additional $0.28 in free cash flow per share.
Comments
But, I wonder if it isn't also possible that the faster speeds with 3G, and the greatly enhanced browsing experience with all of the new programs now available with the 2.0 software isn't also contributing with people getting online even more than before.
edit: Doh, melgross beat me
While I have no doubt that Apple is selling gobs of these devices (there are none in stock anywhere near me, that's for sure), I'd question using browser share increase as a sales metric. The release of iPhone 2.0, even without any 3G iPhone released, would account for a significant increase, I would think. There are a lot of third party applications that ping all sorts of sites or mash up various data sources and would count as another WebKit hit.
edit: Doh, melgross beat me
Ha! Beat you.
Dang! You amended your post before I could get my reply in.
"iPhone 3G has generated its most impressive increase in browsing in Japan, where its share has grown to 0.12 percent from 0.01 percent over the past six weeks," he wrote.
I wonder if the 3G connectivity issues and Safari browser crashes are playing havoc with some in the land of the rising sun as they are here?
Apple is lucky to have WindowsMobile and nasty UI's from Motorola to thank. People are stunned and blown away at how great the interface is on the iPhone and the clarity of the options and dialogs.
[side note] 1 of the 5 has already placed an order for a Mac. 2 of the others are shopping and waiting for the next generation to order a mac. None of which even considered a Mac before their iPhone purchase. Direct experience of the Halo effect. Geezus... Apple has positioned itself well.
I wonder if the 3G connectivity issues and Safari browser crashes are playing havoc with some in the land of the rising sun as they are here?
Also, now that third-party apps are out, iPhone users' browsing experience is no longer limited to Safari. I, for instance, use NetNewsWire much more frequently to read blogs and news sites. Then, there is APNews, Bloomberg, the NY Times reader, and so on, all of which steal browsing time from Safari. I wonder how these apps' browser agents appear in server logs.
If true, then it's easy to foresee iPhone becoming the #3 browsing platform, period, after Windows PCs and Macs.
No doubt the above increase implies more iPhones out in people's hands, but it would be more interesting to look at the total number of iPhone or Safari hits rather than the percentage share to get a more focused view of what's going on in the iPhone realm.
Also, now that third-party apps are out, iPhone users' browsing experience is no longer limited to Safari. I, for instance, use NetNewsWire much more frequently to read blogs and news sites. Then, there is APNews, Bloomberg, the NY Times reader, and so on, all of which steal browsing time from Safari. I wonder how these apps' browser agents appear in server logs.
This is done two ways. One is the number of browser hits, as a percentage. The other is done by platform hits, as done as a percentage.
It's why we see Apple computer platform web hits, as a percentage, higher than Safari hits etc.
The same thing will be true here.
I wonder how these apps' browser agents appear in server logs.
WebKit is the best mobile browser engine out there and it's included in the SDK so I would wager that all the 3rd-party apps that use a browser engine would be using WebKit. They don't have to, but the size of the app, time to load the app, and difficultly to create the app all make it very unlikely.
The User Agent for the iPhone v2.0.1 is:
Mozilla/5.0 (iPhone; U; CPU iPhone OS_2_0_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5B108 Safari/525.20
What is the UA data for v2.0.1?
PS: I hope FF does find life on the iPhone. 3rd-party apps couldn't use it but hopefully some plugins (like FoxMarks and Flash) could be built in to the app for potentially better, and at the very alternate browsing experience.
If true, then it's easy to foresee iPhone becoming the #3 browsing platform, period, after Windows PCs and Macs.
I am certain that the iPhone will best Linux on this front since a cellphone can easily outsell a personal computer.
But there is competition brewing among smartphones and even not so smartphones. Nokia is now teaming up with FF to bring a proper browsing experience to their phones. I'm guessing this means they will be dropping WebKit from S60 in favour of a brand new mobile platform that is untested, adheres to less standards and is slower than WebKit's engine. I can't blame them for associated WebKit with Apple who is their biggest rival for the profitable smartphone market, but it does seem like sour grapes and keep them behind the iPhone's browser experience for at least the next couple years.
When Nokia does start using FF across the board I think they will beat out Linux personal computer browsing too. Perhaps even RiM when they get a proper browser.
Please let Apple get the 3G connectivity problems sorted out along with MobileMe and hopefully the case cracks will only be found on a small batch of iPhones. The more iPhones being sold the more Apple has to be on guard against media anger. Apple has to keep the iPhone looking attractive to the enterprise or the enterprise will decide to stick with the BlackBerry which don't seem to have any problems at all.
If all those unexpected iPhones are being sold then why the heck isn't it doing anything for Apple's share price. They can't say that was factored in.
We'll see tomorrow since this data was introduced later in the afternoon.
The User Agent for the iPhone v2.0.1 is:
Mozilla/5.0 (iPhone; U; CPU iPhone OS_2_0_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5B108 Safari/525.20
What is the UA data for v2.0.1?
Except for the Firmware build number changing in the UA everything else is the same. Acid 3 is 72 for both versions.
I'm an iPod touch user and only got it the week after the app store went up (I bought the V2.0 software), and I've been using the safari browser on my iPod, would I be contributing to that statistic? if so, then it may not be actually 5mill iPhones but iPhones and iPod touches.
Does the browser share also include iPod touches (with or without the iPhone 2.0 software)
I'm an iPod touch user and only got it the week after the app store went up (I bought the V2.0 software), and I've been using the safari browser on my iPod, would I be contributing to that statistic? if so, then it may not be actually 5mill iPhones but iPhones and iPod touches.
Good question; I believe it does.
Go to WhatsMyUserAgent.com to compare the browser's UA to the one above. Any difference?
I hadn't realised v2.0 wasn't included. I suppose the next model due out in September will include it as default.
If all those unexpected iPhones are being sold then why the heck isn't it doing anything for Apple's share price. They can't say that was factored in.
This only has a real effect when the markets are normal. They certainly haven't been normal with the low dollar, high oil, housing crisis, banking crisis, wall street crisis and all of the little other problems we've been having lately, such as the small war in Georgia, the resignation of Musharraf in Pakistan, the increasing size of the war in Afganistan and such.
Compared to that, Apple's phone sales aren't making much headway. Apple's stock rises on Apple news, then drops on the overall fears in the markets.
Mozilla/5.0 (iPod; U; CPU iPhone OS_2_0_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5B108 Safari/525.20
so THat site recognizes it as an iPod rather than an iPhone, but is the tools that the analyst is using also make that distinction or are they only looking at the safari browser which is the exact same?
I hadn't realised v2.0 wasn't included. I suppose the next model due out in September will include it as default.
THey won't because of accounting reasons, You'll still have to pay the $10 to get the iPhone OS on the iPod, I simply didn't want to pay Roger's monthly minimum $70 ripoff fee since I don't use my phone that much. But I do find the app store very beneficial to my livelyhood
I wonder if the 3G connectivity issues and Safari browser crashes are playing havoc with some in the land of the rising sun as they are here?
I've have had numerous Safari crashes, one needing me to restart the phone. The 3G here is fast as long as you're not somewhere with no reception. But there is no 2G network to fall back to/switch between so that might be why I've had no connectivity problems.
I went into the mountains last week though and had no reception at all. Other people were using their phones though, so I'd assume they're on a different network; Softbank is known to have the worst reception of the 3 big networks.
Now on 2.02 as of yesterday and it seems a bit speedier, plus NetShare works again (I have a UK iTunes account).
More specifically, the analyst said the iPhone's share of the browser market has grown nearly 100 percent in the four countries that had access to the original iPhone.
And here I was under the impression that the original iPhone was available in 6 countries: The USA, Ireland, the UK, France, Germany, and Austria.