Author: Horace Dediu

Nokia: Throwing in the towel

“We have long maintained that the company’s ponderous corporate culture would eventually find its footing, but with competitors attacking fiercely at both the low and high end, deterioration in its core European market, and a lengthening timeline for Symbian^3, which may not live up to expectations anyhow, shares will plunge well below recession lows,” he warns.

via Nokia: Charter’s Snyder, Long-Time Bull, Throws In The Towel – Tech Trader Daily – Barrons.com.

But at least Nokia management can take comfort in having a higher P/E ratio than Apple.

iPhone 4 ASP is $600

As a footnote to the unlocked iPhone 4 story, it’s worth noting that the average Apple store pricing for UK and France is around $824 (assuming equal blending between the two countries and between the two models).  Excluding corresponding VAT leads to an approximate ASP of $695.

Operators probably get a slightly better price so my estimate for the iPhone 4 ASP of $600 seems reasonable with potential upside based on product and regional mix.

Unlocked iPhone 4 priced at €600

Factory unlocked iPhone 4 Sold by Apple in UK, Canada & France!! | All on the iPhone, iPod touch & iPad.

Unlocked iPhones are being made available at UK, Canadian and French Apple stores for the equivalent of $740, £500 and €600.

This will go some way toward making the iPhone available to a larger population, especially in developing countries.

iPhone on top down under

The most impressive number for us is the change in units shipped. For example, leader Nokia held 66.6% of the marketshare in Q1 of ’09, and 45.2% in Q2 for a 7% change in units shipped. Meanwhile, Apple held 10.2% in Q1 ’09 and 40.3% in Q1, ’10 for a 532.1% change in units shipped.

Can the iPhone reach 10% of the world's 3G subscribers?

In a previous article I asked what it would take for the iPhone to reach 20% of the world’s smartphone market? (answer: 50% growth).

Now I take a look at the whole market measuring three underlying quantities:

  1. the number of total wireless subscribers world-wide
  2. the number of 3G subscribers
  3. the number of smartphones sold every year 2007 to 2013

The forecast for 2013 is:

  1. total subs: 6.2 billion
  2. total 3G subs: 2.4 billion (38% of all WW users)
  3. 660 million smartphones sold in 2013

I also computed the installed base of iPhones based on units sold per year according to the following schedule: 100% of iPhones in use during first year, 75% in use after second year, 50% in use in the third year, 25% in the fourth and 0% in the fifth and after.

If the iPhone can sustain 50% growth then the following are possible in 2013:

  1. 4% of world’s users using an iPhone (248 million iphone users)
  2. 10% of 3G users are using the iPhone
  3. 21% of smartphones purchased are iPhones

Can iPhone reach 20% of global smartphone market?

On a yearly basis, iPhone has been growing at 270% in 2008,83% in 2009 and 130% so far this year.  The growth has been faster than the growth of the smartphone market during the same time.  As a result, the market share of the iPhone has increased from 2% in 2007 to 13% in 2009.

The question now is: What is the required growth rate for iPhone to maintain growth in share as the overall market grows?

Taking market estimates from Morgan Stanley, I tried to fit an iPhone growth rate which would result in a 20% share for Apple by 2013. This rate turns out to be a conservative 50%/yr.  Any growth beyond 50% would result in well over 20% share for the iPhone.

The iPhone at three

The end of June will mark the third anniversary of the market release of the iPhone. When it arrived in June 2007, anticipation for the product was significant with high consumer awareness and expectations–though the 10 million/yr. target for 2008 was met with skepticism by many.

The iPhone launched on June 29th 2007, with only a few days remaining in the quarter. 270k units were sold in that quarter and that was considered a solid start. When the company reported earnings a few weeks later (July 18th 2007) the company’s stock price jumped to $140 a share.

As a sign of optimism in the company’s prospects, the P/E ratio showed that the company was expected to reach 35% growth (35 P/E).

Was this optimism warranted? Continue reading “The iPhone at three”

Prepare for unrestricted iPhone distribution

I’m picking up all kinds of signals that Apple is about to let loose with a storm of operator distribution deals.

It all started with Tim Cook’s comment in the last conference call:

Over the past year we have moved a number of markets from exclusive to non-exclusive. In each case as we have done that we have seen our unit growth accelerate and our market share improve

Now we are hearing of unrestricted iPhone distribution in France and today the rumor of T-Mobile picking it up in the US (which I always thought was more logical than Verizon).  There are other hints from the Nordic countries

Three to Carry iPhone 4 in UK | News | The Mac Observer observes that there will be five (!) UK carriers selling it.

In addition to the super-steep ramp of 88 countries launching in 3 months.

It looks like Tim pulled all the stops.

The next 100 million iOS devices

As iOS crosses 100 million units sold 3 years after the platform launched, it’s time to look forward to the next 100 million. My expectation is that well over 100 million iOS devices will sell during 2011, but even during the next 12 months (2H ’10 and 1H ’11) the total may well reach 100 million, making 200 million installed by June 2011 very likely.

Here is where the numbers will come from:

iPhone: Assuming only 50% growth (half of the average growth seen so far) gives 50 million units in the next 12 months.

iPad: 15 million base assumption

iPod: This is the most difficult to predict, but 46 million iPods will sell with a growth rate of -8% to -9%. If we consider the iPod touch part of the mix to be 40%, we get 19 million.

The total with these assumptions would be 84 million. A slightly higher growth rate for the iPhone would easily push the total to 100 million.

200 million devices in four years is quite a feat. Compare it to the growth of television which reached 50 million Americans in the first decade after commercial launch. Or consider the Netscape browser which only reached 50 million in its first four years or AOL which just crossed 20 million or in Japan where i-Mode reached 40 million users in the same time frame.

At 200 million, the iOS platform will be 18% the size of the world-wide television audience.

AdMob chief confirms they're getting kicked off the iPhone

Apropos Google’s excellent Android adventure.

AdMob founder and CEO Omar Hamoui today responded on the company’s blog, acknowledging that the terms as written would prohibit developers from using AdMob and Google advertising products on the iPhone.

via AdMob Chief Responds to Apple’s New Developer Terms for Analytics Data Collection – Mac Rumors.