International markets crucial for iPhone growth

invisibleSHIELD case for iPad“International growth played an important part in Apple’s better than expected quarterly results. The company reported 131% year-over-year growth in iPhone unit sales for the quarter in addition to improvement in overall margins,” Trefis blogs for Forbes. “We estimate that the iPhone constitutes about 50% of our $294 price estimate for Apple’s stock.”

“High growth came from Asia Pacific where iPhone unit sales grew 474% year-over-year, Japan grew 183%, and Europe grew 133%,” Trefis reports. “Apple iPhone’s market share has increased from 0.3% in 2007 to 2% in 2009. We currently forecast that iPhone market share will reach 3.2% in 2010 and 11% by the end of Trefis forecast period [2016]. As highlighted in earlier article, iPhone market share could reach 4.5% in 2010 (implying 58 million iPhones sold in 2010) if the company were able to grow unit sales in line with 2009 quarterly iPhone unit growth rates.”

Trefis reports, “By increasing our original forecast (shown below) to 4.5% in 2010, while maintaining our outer year market share growth rates, you can see how the higher share in 2010 would lead to 13% share by the end of the Trefis forecast period… Even if both AT&T and Verizon distribute the iPhone in the US in 2010, more than half of the 58 million 2010 iPhone sales implied by our earlier 4.5% market share estimate would come from high growth international markets.”

Trefis reports, “The mix of international sales will shift further as demand for iPhones in the US market levels off. We estimate that about 85% of iPhones sold by the end of our forecast period will be sold outside the US. If Apple’s mobile phone market share were to increase to nearly 13% by the end of our forecast period [2016], that would imply sales of about 35 million iPhones in the US and nearly 200 million internationally.”

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. The critical thing missing in these analysis is that, unlike a desktop computer, where the average replacement cycle was over five years, cellphones are replaced on the average every two years. Therefore, even if Apple manages to saturate the US market with iPhones (say, some 200 million active accounts end up being created), this would mean that they would still likely sell 100 million per year as they refresh them and people take advantage of the low upgrade price to get themselves a new one. As the market becomes increasingly saturated, the old iPhones will just end up being recycled (physically) more often, or go to foreign second-hand markets, rather than being handed down (as they are today).

    There is plenty of room to grow for Apple, even in the US.

  2. This depends on Apple’s ability to choose the right partners and how well they can make them sell iPhones.

    I can say with certainty that the Latin American carriers are more interested in pushing Blackberries than iPhones, so I’m not surprised one bit that the article discloses the European and Asian markets growth but leaves the Latin American numbers out…

  3. As an example of international growth, take the case of South Korea. The iphone was released here only five months ago, but has already changed the mobile phone market dramatically, probably selling over 1 million units in the face of a rigid tradition of buy local tech. Korea Telecom appears to be keeping the current number secret in order not to humiliate Samsung and LG. Everywhere I look on the subway, on the street, on campus I see iphones.

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