Q1 2014: Apple’s iPhone Mania Steadily Spreading Internationally

  • Apple announced its Jan-Mar quarter results for 2014 and while the results beat street expectations were inline with Counterpoint Research’s forecasts for the Q1 2014
  • Apple shipped a record 43.7 million iPhones during the quarter growing 17% annually and down 14% from the strong Dec quarter
  • Apple generated $26 billion of revenues by shipping these iPhones globally expanding distribution reach at key carriers globally. e.g. China Mobile. Revenues grew an impressive 14% YoY
  • Demand for Apple iPhone 5s remained healthy across subsidized markets during the quarter
  • Apple was successful in flushing out accumulated iPhone 5c inventory during the quarter running aggressive promotions in markets such as USA and Europe
  • However, there was a surprise uptick in demand for iPhone 4/4S across some emerging markets such as India, China and Latin America. Call it a “halo effect”
  • However this pulled down iPhone ASP to US$596  from US$613 in the same period last year
  • The iPhone shipments mix shifting towards higher growth international markets is a good sign for Apple as Apple has peaked out it share across its home market and few European developed markets with this portfolio
  • Counterpoint Market Pulse research estimates Apple continued to dominate the US$400+ premium phones segment during the quarter capturing a lion 60% share. We can call this is an “Apple Tier”

Q1 2014 - Premium Handset Segment - Apple Dominates

  • Apple sold 16.4 million iPads during the quarter down 16% annually which portrays tough competition in tablet space from Asian OEMs and fast-growing  phablet categories which will spark a need for Apple to launch a bigger screen iPhone SKU later this year
  • Another interesting thing about Q1 results were Apple generated three times more revenues through Accessories than iPod segment.  Smartphones & OTT streaming music services are eating mp3 players
  • Counterpoint also estimates, iTunes, services and software segment revenues will overtake Mac revenues later this year which signifies growing importance of scalable software and services trumping even premium hardware especially in this post-pc era