Apple's 20M iPhones Throws the Gauntlet to Nokia and Samsung
7/21/2011 by: Tomi Ahonen
The first of the five biggest smartphone makers announced their results for the second quarter 2011 with Apple announcing 20.3 Million iPhones. Wow. That is a monster quarter by Apple not because it grew by 9% quarter-on-quarter (three months ago the iPhone grew by 15% quarter-on-quarter) - the reason this is superb performance, is that Apple managed the growth in both unit sales and market share - is that there was no new iPhone 5 released for late June.
So, I am tentatively projecting iPhones's market share to be 19%, up one percentage point from 18% in 1Q. Apple is now closing in on selling 1 out of every 5 smartphones on the planet. Awesome for the smartphone brand which is by far the most expensive phone among the major brands (i.e. excluding the luxury phones like Vertu and Tag Heuer etc). Apple obviously grew revenues and grew profits massively this past quarter. It also reported excellent sales in its iPads and Macs. Only iPod sales declined (being partly cannibalized by the iPhone and iPad).
Apple Up, Nokia Tumbles
How does this set the stage for global hegemony in smartphone handset makers? It's an awesome first salvo in the battle among the big 3. We hear from every market that Nokia sales in smartphones are down. Nokia will report on Thursday. Nokia sold 24.3 Million in the first quarter but its quite likely Nokia's fall in sales will drop it below the iPhone in smartphones (they will remain the world's biggest mobile phone handset maker when we add 'dumbphones').
But yes, if Nokia reports sales that dip under the 20M level, so any smartphone sales level in the 'teens' (19M, 18M, 17M etc) then yes, iPhone will have jumped past Nokia and relegated Nokia from the top dog status in smartphone makers for the first time in smartphone history (as Nokia invented the space and has been biggest smartphone maker from the beginning up to now).
If so, it was this article who first called it on June 15, that Apple has passed Nokia in smartphone makers.
But that is before we have Samsung's numbers - they report on July 29. The gossip around Samsung talks of a monster quarter there. In 1Q 2011, Samsung sold 12.6 Million smartphones and under normal times, it would be nearly impossible for one brand to jump from under 13 Million to around 20 Million in one quarter, but these are not normal times and Samsung ships smartphones on three different operating systems: Android, Bada, Windows Phone 7.
After the Nokia smartphone customer give-away of the Stephen Elop 'windfall' when the Symbian Nokia phone sales collapsed from February, now is the time for rival smartphone makers to gobble up all those disgruntled Nokia Symbian customers. Obviously Apple has taken 1.7 Million of those. But the analysts around Samsung are estimating something around 19 Million smartphone sales for the South Korean maker. Samsung mobile phones unit CEO just yesterday released a bullish statement about the full year 2011 Samsung smartphone sales, saying that Samsung will exceed its 60 Million smartphone sales target (up from 25 Million sales in 2010 making Samsung the fastest-growing smartphone manufacturer this year). It means a Samsung 2Q could be tantalizingly close to the Apple 20.3 Million number. My gut says Sammy will not quite make it this quarter but Nomura earlier in June already called it for Samsung to have become biggest smartphone maker this quarter, so it will be very close and if they have a surprising surge, they could have done it. We'll know on July 29.
Apple's 1.7 Million Extra Sales...
Where did the 1.7M unit sales growth come from? Apple obviously has benefitted from the Nokia give-away, but also remember RIM reported a decline in smartphone sales for Q2. And RIM's loss in BlackBerry sales was specific to major losses in the North American market (while growing international sales). So the iPhone has taken some of Blackberry's American Pie, while another part of iPhone growth came by spoiling Nokia's European Vacation. Was there also perhaps for Apple a China Syndrome, we will probably know soon as we get the various analysts reporting in and the data filtered and analyzed.
Meanwhile please remember, on the platforms for smartphones, Google's Android is by far the biggest now, and they sold about 49 Million smartphones in Q2 so yes, Android selling about 2.5x more smartphones now globally than the iPhone. So while Apple is likely now the world's biggest actual mobile phone smartphone handset maker, the operating system with most smartphones sold will continue to be, with an ever-increasing lead - Google's Android.
So, let's wait until we get the Nokia numbers before we formally celebrate Apple toppling Nokia from biggest smartphone crown. That is very likely to have happened now and we'll know in two days. And then we have to wait another week to find out if Apple has also taken the crown (or if it was grabbed by Samsung). But Congratulations to Cupertino! This is a MONSTER quarter once again. Full 10 out of 10 points for excellence in smartphone sales. With almost a year-old design, Apple still grows unit sales, increases revenues, increases profits, and increases market share. Excellent Apple. Truly great.
And two superb silver linings on the record-breaking quarter for Apple. We are expecting the next iPhone (maybe iPhone 4S or may be iPhone 5) and expected to be sold in late August or September. When that new iPhone comes to the market, it will be again Apple loyalists camping outside stores and long lines waiting for it. That hysteria will boost iPhone sales to a new record.
And we are also hearing ever stronger gossip of the lower-priced Nano iPhone (as I called on this blog for now more than a year) and whenever that is launched, hopefully by September, but at least please Apple release it in time for Christmas sales - that would be a huge further jump in iPhone sales. So expect a banner year for Apple in smartphones, clearly the master of the smartphone class in this Year 2 of the Smartphone Bloodbath.
Apple, AAPL, iPhone, iPad, iPod, Samsung, Nokia, Vertu, Tag Heuer, Mac, iMac, Nokia, Android, iOS, Symbian, NOK, RIM, Research In Motion, BlackBerry, Google, GOOG
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