Apple reaches global install base of more than 1B active devices

AppleInsider · January 26, 2016 11:28PM

Apple announced a major milestone as part of its quarterly earnings report on Tuesday, noting that more than 1 billion devices pinged its servers over the three-month period ending in December.

The statistic was shared in supplemental material (PDF link) provided to investors alongside Apple's official quarterly earnings results, which were filed with the U.S. Securities and Exchange Commission today. Apple included iPhone, iPad, Mac, iPod touch, Apple TV and Apple Watch in its device count.

For the first fiscal quarter of 2016, Apple notched an all-time record $75.9 billion in revenue driven by 74.8 million iPhone sales. Profits hit $18.4 billion during the quarter, but the results left some investors concerned that iPhone demand is flagging.

In an attempt to allay fears, the company issued calculations pointing to currency headwinds. According to Apple, $100 of non-U.S. dollar revenue in the fourth quarter of 2014 is worth only $85 today. In effect, the company is saying revenues would have been $5 billion higher if it weren't for volatile foreign trade trends.

As for this quarter, Apple sold 5.3 million Macs, down 4 percent from 5.5. million a year ago. iPad sales were also down year over year at 16.1 million units, a decline of 25 percent. Apple does not break out Apple Watch and Apple TV sales, instead lumping those numbers together with iPod, Beats hardware and accessories in a category labeled "Other Products." CEO Tim Cook in today's earnings conference call said both Apple Watch and Apple TV saw record sales this past quarter.

roake · January 27, 2016 12:57AM

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

Mr_Grey · January 27, 2016 1:29AM

So by "billion" they probably just mean 1,000 million though. Still a ways to go before they hit a "real" billion.

Mr_Grey · January 27, 2016 1:32AM

roake said:

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

jfc1138 · January 27, 2016 3:02AM

Because not actually making money but simply pushing "numbers" is the key?

Good one: plus it would be hard to compete with Samsung in the non-profit smartphone segment where they have got such a lead.

ksec · January 27, 2016 3:18AM

1 Billion active devices, the next milestone would be 1 Billion Active iPhone.

michael scrip · January 27, 2016 3:27AM

Mr_Grey said:

roake said:

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

The Apple iPhone only represents 15 out of 100 smartphones sold today.

How is that a commodity device?

tenly · January 27, 2016 5:21AM

Mr_Grey said:

roake said:

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

Right. Because that's what Burberry, Louis Vuitton, Rolls Royce and Hermés have done...right? LOL
Lowering prices is definitely not the answer.

Rayz2016 · January 27, 2016 6:25AM

Mr_Grey said:

roake said:

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

And that's why you're not running Apple…

Basic economic theory will tell Apple how much they can shift at any given price point, and they will price it to maximise profits, not sales.

Apple could price the phone at $1 and that would certainly get people buying it. At one dollar, let's assume that everyone on the planet can now buy an iPhone. That would give Apple revenues of $8billion (quite a bit less than they've just announced), and a huge, worthless market share.

mattinoz · January 27, 2016 6:34AM

So assuming 50% are iPhones that means every iPhone for the last 3 years are active. Which is unlikely so this could mean 4+ years of devices are more than likely still in use.

That is fairly impressive.

avidthinker · January 27, 2016 6:38AM

Those expansions in Maiden, NC and Reno, NV are gonna come in real handy...

torsteino · January 27, 2016 7:12AM

Mr_Grey said:

So by "billion" they probably just mean 1,000 million though. Still a ways to go before they hit a "real" billion.

In english a billion IS 1000 million... https://en.m.wikipedia.org/wiki/Billion

bestkeptsecret · January 27, 2016 7:13AM

So this would be 1 billion active devices that pinged the servers over a 3 month period. Obviously the number of devices sold is much higher.

As a personal anecdote, I have an iPhone, an iPhone 3G, an iPhone 3GS, an iPhone 4, an iPhone 4S and a gen.1 iPad that have not been turned on over the 3 month period. While there aren't too many guys like me who buy and keep every iPhone model, I think it is a safe assumption that there are devices like mine still hanging around in drawers around the world.

latifbp · January 27, 2016 10:01AM

Rayz2016 said:

Mr_Grey said:

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

And that's why you're not running Apple…

Basic economic theory will tell Apple how much they can shift at any given price point, and they will price it to maximise profits, not sales.

Apple could price the phone at $1 and that would certainly get people buying it. At one dollar, let's assume that everyone on the planet can now buy an iPhone. That would give Apple revenues of $8billion (quite a bit less than they've just announced), and a huge, worthless market share.

Keep in mind each of those customers could buy iTunes Match at $25/year as well.

tenly · January 27, 2016 2:09PM

You make a lot of good points - but - and this is a big but - be careful what you wish for. You just might get it - and look at the last choice (excluding Jobs) that the Apple Board thought was the "right guy" to run the company. If they fire Cook - I'm not at all confident that the board will not give the reigns to some shmuck that will destroy everything that is different and good about Apple. Steve Jobs hand-picked Cook and we could do a LOT worse. I'm happy to give Cook more time. Sure there are some things he could be doing better - but he does seem to be heading in the right direction - just a bit slower than we would like.

tenly · January 27, 2016 3:33PM

sog35 said:

tenly said:

You make a lot of good points - but - and this is a big but - be careful what you wish for. You just might get it - and look at the last choice (excluding Jobs) that the Apple Board thought was the "right guy" to run the company. If they fire Cook - I'm not at all confident that the board will not give the reigns to some shmuck that will destroy everything that is different and good about Apple. Steve Jobs hand-picked Cook and we could do a LOT worse. I'm happy to give Cook more time. Sure there are some things he could be doing better - but he does seem to be heading in the right direction - just a bit slower than we would like.

The next guy needs to be a proven innovator.
A guy who has proven he has vision and knows how to control the narrative of the company.

My first choice would be Elon Musk. Apple/Tesla should merge to make a larger company, lets call it iLife.
Cook could stay on as the CEO of Apple. But his role will be more of a glorified COO.
Musk would be the CEO of iLife and be the visionary of the company as a whole.

I like that idea. Submit it as a shareholder proposal and I'll vote my 800 shares "for" it!

jbdragon · January 27, 2016 3:39PM

Mr_Grey said:

roake said:

A product line cannot grow forever. This is why Apple is attempting to branch into other markets. The trillion-dollar question is whether these endeavors will work out as planned; it's hard to knock it out of the park every single time.

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

You man how most everyone making Android phones are breaking even or losing money? Ya, that's a smart move. So drop your price down to nothing sell millions of phones and in the end, made no money. What exactly does that get you?

apple iigs · January 27, 2016 4:22PM

Rayz2016 said:

Mr_Grey said:

They could always reduce their huge profit margin to the same level as the other players, that would increase sales by a factor of ten probably. If the iPhone is becoming a commodity device, maybe it should be priced accordingly instead of as if it were some kind of precious gem.

And that's why you're not running Apple…

Basic economic theory will tell Apple how much they can shift at any given price point, and they will price it to maximise profits, not sales.

Apple could price the phone at $1 and that would certainly get people buying it. At one dollar, let's assume that everyone on the planet can now buy an iPhone. That would give Apple revenues of $8billion (quite a bit less than they've just announced), and a huge, worthless market share.

Actually this is not a bad idea. Imagine Apple saying "the iPhone will go on sale for x amount of dollars or buy one iPhone get one free for one month only". This would be interesting to see. Remembering back to 2009 and 2010 there were huge android promotions pushing buy 1 android device get a second free. This was at time when iPhone was selling many more iPhones then android. The user base was much larger for iPhone at the time. That buy one get one free promotion really helped android go over the top with its user install base... with goole making incredible claims of something like close to a one million android activations a day. I don't know if that was accurate number but clearly google realized that it needed to push its user base quickly to expand.

But really I am not sure any of this matters anyway now. Apple is company I would think is comfortable with its self and its position in the consumer technology business.

As a side note I really wish Apple would pay attention to the less popular products like its mac mini and iPod touch. The Mini and Touch probably don't make much money for Apple but these products are essential for people who generally cannot afford the apple experience a different way. The mini should be updated more regularly then is what seems now to be a two year update cycle. In my opinion Apple can afford to come close on breaking even on some of their products. Its not difficult to see that this would make sense. Just because you can only afford the lesser of the Apple products does not mean not mean that we should be left out and neglected with regular timely updates.

Mr_Grey · January 27, 2016 9:09PM

torsteino said:

Mr_Grey said:

So by "billion" they probably just mean 1,000 million though. Still a ways to go before they hit a "real" billion.

In english a billion IS 1000 million... https://en.m.wikipedia.org/wiki/Billion

No. I was just being droll really because it's been recently changed (England capitulated a few decades ago), and it's not ever going to change back).

An American "billion" was always 1,000 million. An English "billion" is/was the same an American "trillion."

England had this definition for many many years before the American one became standard and there was always confusion around the world when such numbers were announced, because they were different depending on which country they came from. Countries that were part of the old English Empire tended to use the original English definition.

Everyone argued about it for years but since England is an old failed Empire, and America is only on the cusp of being an old failed Empire, America "won."

Mr_Grey · January 27, 2016 9:15PM

apple iigs said:

Rayz2016 said:

And that's why you're not running Apple…

Basic economic theory will tell Apple how much they can shift at any given price point, and they will price it to maximise profits, not sales.

Apple could price the phone at $1 and that would certainly get people buying it. At one dollar, let's assume that everyone on the planet can now buy an iPhone. That would give Apple revenues of $8billion (quite a bit less than they've just announced), and a huge, worthless market share.

Actually this is not a bad idea. Imagine Apple saying "the iPhone will go on sale for x amount of dollars or buy one iPhone get one free for one month only". This would be interesting to see. Remembering back to 2009 and 2010 there were huge android promotions pushing buy 1 android device get a second free. This was at time when iPhone was selling many more iPhones then android. The user base was much larger for iPhone at the time. That buy one get one free promotion really helped android go over the top with its user install base... with goole making incredible claims of something like close to a one million android activations a day. I don't know if that was accurate number but clearly google realized that it needed to push its user base quickly to expand.

But really I am not sure any of this matters anyway now. Apple is company I would think is comfortable with its self and its position in the consumer technology business.

As a side note I really wish Apple would pay attention to the less popular products like its mac mini and iPod touch. The Mini and Touch probably don't make much money for Apple but these products are essential for people who generally cannot afford the apple experience a different way. The mini should be updated more regularly then is what seems now to be a two year update cycle. In my opinion Apple can afford to come close on breaking even on some of their products. Its not difficult to see that this would make sense. Just because you can only afford the lesser of the Apple products does not mean not mean that we should be left out and neglected with regular timely updates.

Thanks for being the only person who didn't crap on me for making the "perhaps they could reduce their margins" comment.

Funnily enough, right after I said it, 9to5Mac published a piece saying much the same thing.

To those taking me to task for the "commodity" word, I might have mis-spoke or used the wrong term. What I was talking about was market saturation and dwindling sales as a result of same. In other words, if they are having trouble selling iPhones, maybe the fact that some of the "cheapest" models withe the "lowest" prices are basically a thousand bucks has something to do with it.

Apple has the fattest margins in the business. I said two or three times the average, but some people even say four or eighth times the average. They make 40% on every product. Always. Most other computer manufacturers make 5% or so from what I understand.

One of the typical rules of business is that if people are having trouble affording your products or they aren't selling as well as you want, that reduction of said (super) fat margins is something to consider. It's not a crazy idea by any means.

mattinoz · January 27, 2016 9:47PM

Mr_Grey said:

torsteino said:

In english a billion IS 1000 million... https://en.m.wikipedia.org/wiki/Billion

No. I was just being droll really because it's been recently changed (England capitulated a few decades ago), and it's not ever going to change back).

An American "billion" was always 1,000 million. An English "billion" is/was the same an American "trillion."

England had this definition for many many years before the American one became standard and there was always confusion around the world when such numbers were announced, because they were different depending on which country they came from. Countries that were part of the old English Empire tended to use the original English definition.

Everyone argued about it for years but since England is an old failed Empire, and America is only on the cusp of being an old failed Empire, America "won."

You only said a billion was a million millions to annoy the French and the Amercian's sided with the French to annoy the English.

Apple reaches global install base of more than 1B active devices

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