January 27, 2012

App Store sales result in average revenue gains of 19% for iPad, 22% for iPhone

By Josh Ong

Published: 09:45 PM EST (06:45 PM PST)
App publishers on Apple’s App Store typically see a significant first-day revenue jump of 52 percent for iPad apps and 41 percent for iPhone apps and and 19 percent and 22 percent overall, respectively, when they put their software on sale, according to a new analysis.

Netherlands-based Distimo published the results of a study tracking app sales and spotlights for top 100 apps across the App Store for iPad and iPhone and the Android Market during the fourth quarter of 2011. According to its findings, apps on the Android Market benefited the most from being featured, while App Store apps on average saw a higher jump in revenue on the first day of a sale.

During the first three days after being featured by their respective stores, iPad apps jumped 27 ranks in the top 100, iPhone apps rose 15 spots and Android titles leapt up 42. Over the course of seven days, Android Market offerings had an average gain of +65, compared to +15 for iPhone apps and +28 for those for the iPad.

The study acknowledged that rank jumps correspond to vastly different uptakes in downloads depending on where an app started on the top 100 list, so it included a graph depicting relative rank changes in terms of percentage with a seven-day average. For instance, an app that jumped from 10 to 5 saw a 50 percent increase in rank, while one that went from 50 to 25 counted as a 100% increase.

Distimo found that about one-third of iPad apps jumped 200 percent in ranks while being featured and approximately 50 percent of Android apps gained 100 percent when spotlighted. The report noted that positive effects continued even after the featured period ended, as iPad, iPhone and Android apps were on average up 145 percent, 75 percent and 828 percent, respectively, five days after.

As for app sales, Android Market software experienced gains of just 7 percent on the first day of a sale, compared to 52 percent for the iPad and 41 percent for the iPhone. During the length of the sale, however, Android apps passed up their iOS counterparts in terms of revenue increase. Revenue for Android Market apps went up 29 percent during a sale, while revenues for iPhone and iPad apps went up 22 and 19 percent.

According to the report, some applications actually lost revenue by going on sale. For example, 44 percent of iPhone applications saw a decline in revenue during a sale. The study found that steeper discounts often resulted in higher revenue gains.

“In general, we noticed that the tipping point happened when the price was cut in half or the application was offered in tier 1 ($ 0.99) or tier 2 ($ 1.99),” the report read.

Apple announced this week that it had reached a new milestone of $ 4 billion paid out to App Store developers. The company had previously reported a $ 3 billion figure last October during the iPhone 4S launch. The App Store has grown to 550,000 iOS applications, including over 170,000 specifically for the iPad.

A separate study last month found that among top apps with both iOS and Android versions, iOS apps generate 300 percent more revenue than their Android counterparts.


iPhone 4S accounts for 89 percent of iPhone sales

Despite multiple media outlets painting it as a “disappointing” update immediately after its debut, the iPhone 4S is Apple’s most popular iPhone by far. A consumer survey by Consumer Intelligence Research Partners (via AllThingsD) suggests that the new iPhone 4S accounted for 89 percent of all iPhones sold in Apple’s most recent quarter. The US$ 99 iPhone 4 and free iPhone 3GS were both barely blips on the radar, with 7 percent and 4 percent of overall sales, respectively.

iPhone 4S unit sales follow a predictable pattern, with the lowest-priced model being most popular:

  • 16 GB: 45 percent of sales
  • 32 GB: 34 percent of sales
  • 64 GB: 21 percent of sales

Some other metrics found in CIRP’s research give some further insight into demand for the iPhone 4S:

  • 19 percent of iPhone 4 owners upgraded
  • 42 percent of iPhone 4S buyers broke their existing contract for an early upgrade
  • 19 percent of iPhone 4S buyers sold their old device

I’ve inputted CIRP’s results into a spreadsheet and compared them against the iPhone unit sales and revenues in Apple’s own earnings. The numbers I got for total revenues when going by CIRP’s survey results are only about 6 percent higher than Apple’s actual reported revenues, so CIRP’s numbers look to be quite close to what actually took place.

Keeping that margin of error in mind, unit sales of the iPhone break down approximately as follows:

  • iPhone 3GS: 1.48 million
  • iPhone 4: 2.59 million
  • iPhone 4S 16 GB: 14.8 million
  • iPhone 4S 32 GB: 11.2 million
  • iPhone 4S 64 GB: 6.9 million

This distribution of unit sales hews very closely to my own analysis of Apple’s iPhone sales. Of note, the iPhone 3GS is still the third-most popular smartphone overall, and with just under 1.5 million units sold it outsold all competing Android handsets (considered individually, obviously not in total).

The iPhone 4S is also eating the iPod touch’s breakfast and stealing its lunch money; with approximately 10 million iPod touch units sold last quarter, the 16 and 32 GB iPhone 4S models each outsold the iPod touch all by themselves.

Siri, define “blockbuster.”

TUAW – The Unofficial Apple Weblog

iPhone 4S accounts for 9 out of 10 US iPhone sales, 42% of customers break contract to buy one

By Mikey Campbell

Published: 04:10 PM EST (01:10 PM PST)
Despite the customary price drop of Apple’s last generation iPhone 4 and the free-on-contract iPhone 3GS, the company’s newest handset dominated sales and has seen strong numbers not only from early adopters, but “conventional” smartphone users as well.

Citing a recent survey by Consumer Intelligence Research Partners, All Things D reports that since the debut of the iPhone 4S in October 2011, some 89 percent of all U.S. iPhone sales can be attributed to the newest Apple smartphone.

The CIRP survey shows that iPhone buyers weren’t put off by the $ 399 price of the top-of-the-line 4S, which boasts up to 64 GB of storage, and reports that an impressive 21 percent opted for the highest capacity model while the 32 GB and 16 GB versions garnered 34 percent and 45 percent of sales, respectively.

A deeper look into the figures reveals that recent iPhone buyers are bucking the trend of waiting the two years for their current contracts to expire before buying the popular device, and suggest that a majority of 4S adopters bypass cheaper legacy models for the newer Siri-enabled device.

“An amazing 19 percent of all iPhone buyers upgraded from the iPhone 4, a phone barely a year old at the time of the launch,” said CIRP co-founder Mike Levin. “Forty-two percent of iPhone buyers broke existing carrier contracts to get the new iPhone 4S. And 19 percent of these iPhone 4S buyers sold their old iPhone in the secondary market. Early upgrades, broken contracts, and selling used phones — all allow buyers to purchase the new iPhone 4S, when conventional wisdom suggests that these users would follow the two-year contract cycle, or at least purchase the cheaper models.”

The news comes on the heels of Apple’s Q1 2012 earning’s call on Tuesday, which outlined the company’s best performance ever and the second best quarterly corporate performance in U.S. history.

The iPhone 4S has seen amazing success after a longer than usual product refresh cycle built up customer demand to unprecedented heights. Sales were so strong that CEO Tim Cook said during the after-earnings conference call that Apple failed to too small.

The iPhone 4S rollout was the fastest in company history and the product line continues to set records for both Apple and mobile carriers such as AT&T’s 2011 holiday quarter where the iPhone represented 80.8 percent of all smartphones activated. Verizon recorded 4.2 million iPhone activations which represented more over half of the number one U.S. carrier’s smartphone sales.


Massive holiday quarter pushes iPhone sales past Android in US

By Katie Marsal

Published: 12:42 PM EST (09:42 AM PST)
Apple’s share of smartphones sold in the U.S. doubled in the fourth quarter of 2011, pushing iPhone sales just past the myriad of devices that run Google’s Android platform.

With just three different iPhone models available for sale, Apple reached a 44.9 percent share of U.S. smartphone sales last quarter, according to research firm Kantar Worldpanel ComTech. That was good enough to just barely edge Google’s Android platform, which is available on all major carriers and from a wide number of handset manufacturers.

Apple’s 44.9 percent share was twice that of a year prior, according to Reuters. And Apple’s gains were Android’s losses, as the platform slipped from 50 percent of sales to 44.8 percent.

Kantar covers nine key markets across the globe, and Apple’s iPhone grew at a faster rate than Android in all nine countries. Microsoft’s Windows Phone platform failed to crack 2 percent of sales in all nine markets, even with the launch of the Nokia Lumia.

The latest mobile market share data comes just as Apple posted a record quarter in which it far exceeded analyst expectations for the iPhone. The company blew away its previous best and sold 37 million iPhones, a number that easily topped the estimated 32 million smartphones rival Samsung sold in the same period.

Apple’s feat of edging out Android came with just three models available for sale: the new iPhone 4S, the 2010 iPhone 4, and 2009′s iPhone 3GS. In addition, Apple’s iPhone lineup is not available on T-Mobile, the fourth-largest carrier in the U.S., and the iPhone 3GS, which is free with a two-year contract, is only available on AT&T.

In contrast, Android smartphones are available on all four major U.S. carriers from a number of manufacturers in a variety of sizes and styles, with different features like high-speed 4G LTE connectivity, large 4-plus-inch screens and physical keyboards.

Commenting on the race between the iPhone and Android, Apple Chief Executive Tim Cook said on Tuesday that while it’s a close battle, other competitors like Microsoft cannot be counted out either. He also noted that while the iPhone and Android are neck-and-neck, Apple has a considerable lead in other markets with its iOS mobile operating system, which is found on both the iPad and the iPod touch.

“iOS, you look at phones, tablets, the iPod touch, we’ve sold over 350 million iOS devices,” Cook said. “Over 62 million of those were done in the last quarter alone.”


Apple Confirms Kindle Fire And Other ‘Limited Function Tablets’ Have No Impact On iPad Sales

Apple Confirms Kindle Fire And Other ‘Limited Function Tablets’ Have No Impact On iPad Sales

Despite being labeled the first real competitor to the iPad, it seems Amazon’s 7-inch Kindle Fire tablet still has a long way to go before it can lure tablet users away from Apple’s device. Although it seemed to be incredibly popular when it launched last year, largely thanks to that attractive $ 199 price tag, Apple CEO Tim Cook says the Kindle Fire, and other “limited function tablets,” had no impact on iPad sales whatsoever.

When probed by one analyst during the company’s quarterly earnings call about the impact budget tablets have had on the iPad, Cook highlighted that Apple sold a record 15.4 million iPads during the last quarter, and declared that the company does not consider “limited function tablets and e-readers to be in the same category as the iPad.”

We strongly believe in optimizing applications from day one to take advantage of the larger canvas. There are only a few hundred apps designed for the competition, versus more than 170,000 apps designed specifically for iPad. People who want an iPad won’t settle for a limited function tablet.

And of course, the Kindle Fire isn’t the first device that has attempted to steal some of the iPad’s market share. Since its release in 2009, Apple’s tablet has influenced a whole host of slates powered by Android, BlackBerry, and the webOS operating system.

But the HP TouchPad, which was discontinued by HP last summer and sold off for as little as $ 99 in a fire sale, proves that no one really wants just any old tablet — they want an iPad. And Apple isn’t about to let its popularity slip away. Cook announced that the company plans to “continue to innovate like crazy” in the tablet market to ensure its device remains the world’s best-selling tablet.

[via MacRumors]

Cult of Mac

iCloud nets 85M subscribers as sign-ups outpace device sales

By Mikey Campbell

Published: 06:15 AM EST (03:15 AM PST)
During Tuesday’s earning conference call, Apple Chief Executive Officer Tim Cook referred to iCloud as an integral part of the company’s future after the cloud storage and syncing service saw an almost overwhelming adoption rate of over 85 million users.

Following a rocky beginning, Apple’s iCloud has seen incredible growth, and the number of new subscribers added during the three months ending in December outnumbered the combined sales of Macs, iPhones, iPads and iPods.

“iCloud is off to a great start with more than 85 million customers signed up as of today,” said Apple Chief Financial Officer Peter Oppenheimer. “With iCloud, customers can store their music and photos and documents and keep their personal information and content in sync across all their devices, automatically and seamlessly.”

The massive numbers are not solely customers who sign up after purchasing a new product, but also includes those who have transferred old MobileMe accounts to the new cloud service.

Unlike Apple’s previous attempts at centralized storage and online management systems seen in .Mac and subsequently MobileMe, iCloud is free and offers a much more comprehensive and seamless user experience. With .Mac and MobileMe, users had to sync data manually, pay for storage and deal with a sometimes clunky interface, which could explain why iCloud is enjoying such success.

“It was a fundamental shift recognizing that people had numerous devices and they wanted the bulk of their content in the cloud, and easily accessible from all the devices,” Cook said.

When the service launched in October 2011 alongside iOS 5, users were granted access to seamless syncing of emails, calendars, contacts as well as cloud storage for all their Apple devices. At the time, one analyst said that iCloud was the most important Apple service since iTunes, and guessed that it would one day lead to gadgets “we haven’t thought of yet.”

It remains to be seen what devices Apple has planned in their product pipeline, but Cook is clear as to how important iCloud is to the company’s future.

“It’s just not a product. It’s a strategy for the next decade,” Cook said.


Apple earns record $13B on sales of 37M iPhones, 15M iPads and 5.2M Macs

By Katie Marsal

Published: 04:42 PM EST (01:42 PM PST)
Apple announced Tuesday the best quarter in its corporate history where earnings rose more than 117% to $ 13.06 billion, or $ 13.87 per diluted share, on record quarterly revenue of $ 46.33 billion.

The results compare to revenue of $ 26.74 billion and net quarterly profit of $ 6 billion, or $ 6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

“We are very happy to have generated over $ 17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $ 32.5 billion and we expect diluted earnings per share of about $ 8.50.”

Apple sold an all-time high 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter, in addition to a record 15.43 million iPads — a 111 percent unit increase.

The Cupertino-based company also sold 5.2 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter, and another record benchmark. Meanwhile, iPod sales came in at 15.4 million units, a 21 percent unit decline.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

Apple will provide live streaming of its Q1 2012 financial results conference call beginning at 2:00 p.m. PST. AppleInsider will provide full coverage.


64GB iPhone 4S takes 21% of sales, 36% of iPhone buyers come from another platform

By Neil Hughes

Published: 10:11 AM EST (07:11 AM PST)
A new survey of recent iPhone customers found that 21 percent of iPhone 4S buyers chose Apple’s highest capacity 64-gigabyte model, while 36 percent of users migrated from another platform like Android, BlackBerry or Palm.

Consumer Intelligence Research Partners released a report on Monday, revealing new details about users who bought an iPhone following the launch of the new iPhone 4S last October. Among those surveyed, 21 percent of iPhone 4S buyers opted for the high-end 64GB model, Apple’s highest-ever capacity for a smartphone model.

The latest figures are slightly higher than a different poll conducted by investment firm Piper Jaffray last October on the first day of iPhone 4S availability. That poll of customers waiting in line found that 19 percent chose the 64GB model.

CIRP previously found that 18 percent of iPhone buyers at the iPhone 4S launch were switching from other platforms, like Android, BlackBerry or Palm. But that number only grew as 2011 drew to a close, with 36 percent of buyers coming from competing platforms.

The data comes from a survey of customers that purchased an iPhone in October, November and December of 2011. From an initial response of 6,316 subjects, CIRP surveyed 365 qualified people for its analysis.

The survey also found that AT&T, Verizon and Sprint have maintained their market shares consistently among iPhone owners. But the availability of the iPhone has also helped the three largest wireless providers in the U.S. take customers from other carriers that do not over the iPhone, most notably T-Mobile.

CIRP also discovered that online sales of the iPhone decreased as Apple filled preorders and met market demand. While online sales represented 43 percent of Apple’s total handset sales during the iPhone 4S launch, that dropped to 33 percent as 2011 drew to a close.

The same research group revealed in a separate study last week that resales of iPhones are good for both Apple and carriers. It found that 49 percent of new iPhone owners sold a previous model from Apple on the secondary market.


Microsoft’s Windows business hurt by slow PC sales

By Mikey Campbell

Published: 05:15 PM EST (02:15 PM PST)
Despite meeting expectations for its fiscal second quarter, Microsoft saw a decline in its bread and butter Windows business, causing net revenue fall slightly for the three months ending on Dec. 31.

The Redmond, Wash., software giant announced on Thursday that quarterly gains in its gaming, Office and server businesses offset a drop in Windows sales, though overall profit dipped slightly from the year ago period, reports Reuters.

The company posted a net profit of $ 6.62 billion or 78 cents per share for its fiscal second quarter, compared to the previous year’s $ 6.63 billion or 77 cents per share.

Microsoft’s per share performance beat the Street’s expectations of 76 per share and saw a rise due to less shares outstanding than 2010.

The department that oversees the company’s Windows OS saw a six percent drop in revenue from a year ago with $ 4.74 billion, while the business division posted a gain of three percent with $ 6.28 billion.

“We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services,” said Chief Executive Officer Steve Ballmer. “Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs, and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012.”

Windows PC sales were reported to have taken a hit from Apple’s popular iPad tablet, forcing competitors to play catch-up with products like upcoming ultrabooks and tablets. However, Intel and Microsoft are said to be butting heads on component and software costs which could price Windows 8 tablet computers out of reach for most consumers.

According to estimates, combined Mac and iPad sales will make Apple the world’s largest global PC vendor in 2012.


Mac sales growing faster for Apple in China than US

By Neil Hughes

Published: 04:17 PM EST (01:17 PM PST)
Apple’s growth story in China now extends beyond the iPhone and iPad, with Mac sales there also continuing to outpace the U.S. in terms of year over year growth, according to a new report.

Analyst Ben A. Reitzes with Barclays Capital said in a note to investors on Wednesday that he’s not concerned by recent domestic sales data that some have interpreted as slower-than-expected Mac sales growth in the U.S. The NPD Group released figures on Tuesday that showed U.S. Mac sales up 12 percent year over year, a number that still easily outpaced the rest of the industry.

But Reitzes still believes Apple’s total global sales will be up 22 percent year over year, thanks largely to rapid expansion in China. He said his checks with industry sources indicated that Mac sales grew faster in China last quarter than they did in the U.S.

“We believe Mac sales remain relatively strong even as the economy weakens, benefitting from new stores in China and strong sales of the MacBook Air,” he said. “Even though the economy and HDD shortages are concerns that could limit upside, we remain comfortable with our estimate for 22% (year over year) Mac unit growth for (the fourth quarter of calendar 2011) given overseas momentum — especially in China where growth is much higher.”

Apple previously highlighted tremendous growth in its Mac platform in the Asia-Pacific region last April, when officials noted that Mac sales were up 76 percent in the region, compared to 25 percent in North America. But those figures represented an entire region, while Reitzes believes Apple’s greatest growth will come from one nation: China.

In fact, he said he believes Mac growth for the quarter will prove to have been “really driven by China” when Apple publicly announces its earnings next week. The company’s earnings release and subsequent conference call are scheduled to take place after markets close next Tuesday.

A poll released last November found that Apple was the most desirable PC brand in all of China. A survey of 1,553 Chinese consumers revealed that 21 percent of respondents were considering a Mac for their next PC purchase.

Beyond China, Mac sales for the holiday quarter will also be bolstered, Reitzes said, by the fact that there was an extra week of sales in just-concluded 14-week December quarter. He believes those extra seven days could help Apple by “several hundred basis points.”

The benchmark for Apple was set in the company’s September quarter of last year, when it sold a record 4.89 million Macs in the three-month span. If the company manages to top that sum, it could achieve its first-ever quarter 5-million quarter for the Mac platform.

Apple’s continued worldwide growth in Mac sales has seen it continually outpace the rest of the PC market. Just last week, Gartner revealed that Apple was the No. 3 PC maker in the U.S., riding high on industry-leading 20.9 percent growth during the last quarter.