How the iPhone 6/Plus ruined Apple

“While it’s certainly possible that the great days of iPhone sales growth are over, I wouldn’t make that prediction just yet,” Dr. Drang writes for leancrew. “In fact, I was surprised to learn that iPhone sales were merely flat. I was expecting a decline — not because the iPhone is losing popularity, but because the iPhone 6’s first quarter of sales was such a gigantic leap upward. ”

“The pent-up demand for a larger iPhone caused sales to increase nearly 50% year over year, to 74.47 million from 51.03 million the year before,” Drang writes. “This was the biggest percentage jump in year-over-year sales since the introduction of the 4S (which was goosed a bit because the 4S was delayed). I just didn’t think the 6S could keep up with that. And maybe it won’t.”

“But look at how things were going before the iPhone 6. Had the trend of 2012–2014 continued through 2015, iPhone sales last quarter would have been 65–70 million. Instead they were just under 75 million. It’s only in comparison to the huge holiday quarter of 2014 that last quarter looks dull,” Drang writes. “If sales don’t improve with the iPhone 7, I’ll be willing to believe we’ve reached ‘peak iPhone.’ Until then, the only problem I see is that the iPhone 6 was too successful.”

Read more in the full article here.

MacDailyNews Take: Yup.

Apple was at least two years late with properly-sized iPhones*. With iPhone 6/Plus in Q115, they had wild success due to massive pent-up demand. That they topped it in Q116 with the 6s/Plus is remarkable, almost unfathomable, and even more so considering the macroeconomic headwinds that are blasting the company in the face.

Anyone who fails to realize the magnificent scope of what Apple accomplished this past quarter simply cannot see the forest for the trees.MacDailyNews, January 27, 2016

*iPhones sized properly for the majority of the market, as per:
Apple in April 2013: ‘Customers want what we don’t have’

SEE ALSO:
No, Apple is not dying and neither is the iPhone – January 27, 2016
Piper Jaffray: iPhone to resume growth in 2016 despite poor macroeconomy – January 27, 2015
Apple reaps $18.4 billion quarterly profit, the largest ever recorded by a single public corporation – January 26, 2016
Apple beats on earnings; sets all-time records for revenue, net income, and EPS – January 26, 2016
MacDailyNews presents live notes from Apple’s Q116 Conference Call – January 26, 2016
Apple beats Street with all-time record quarterly earnings – January 26, 2016

28 Comments

  1. Not to belabor the point made by multiple posters yesterday, but a “properly sized” iPhone is like a properly sized piece of string: it depends on how you plan to use it. Lots of folks prefer large phones, hence the sales jump last year, but that does not make those who prefer small phones “improper.”

    1. No kidding! Well said.

      MDN, can you kindly stop with this incessant, “Apple was at least two years late with properly-sized iPhones” and similar comments.

      Because…

      1. Wot TX said.

      2. How do you know they weren’t biding their time to get it really right.

      3. Were they also late with music players, netbooks, phones?

      Get over it.

      1. Phone size should be like color choice. A “personal preference”.
        I might have large hands but prefer the 3.5″ iPhone because it is the smallest for my pocket. Other’s with small hands, my daughter, chose the 6 plus. Why, she just wanted the largest screen.

    2. The “properly sized” product is the one that the majority of your paying customers want, in this case iPhones larger than 4″. No doubt there is a market for 4″ phones and the people who prefer them aren’t “improper”, they just have smaller hands than normal.

      1. I’m not sure that “abnormal” is an improvement on “improper.” When I was in college, I had a suite-mate who played center on a major-conference basketball team. He could easily pick up the ball from above with one sweaty hand. I would not call his finger span average, but it was certainly normal. Mine is also normal, besides being average. He could have used a 5.5″ iPhone one handed; I struggle to use a 4.7″. That does not make either of us abnormal or improper. It makes us different, as in “Think Different.”

        1. Hit send too soon! Meant to add: I used to practice law with a man who was tall, about 6’4″, hardly abnormal for an American. When he was in the Peace Corps, he was assigned to a state in India with about 30-40 million people, and was the tallest person there. Assumptions about hand size based on male Americans do not apply to women or most other nations in the world. Indians might prefer a 6se or whatever because it is small enough for them to use, not because it is cheap. Avoiding “peak iPhone” will require some imagination.

  2. Just because the share price is down everyone is calling Apple a dying company. Aren’t most companies suffering decreased sales in this weak economy? Is every company with lower product sales considered to be going out of business?

    What’s this BS about iPhone 6 sales being too successful? Apple made plenty of revenue and profits from selling them, so that should be a good thing. All this nonsense stems from how Wall Street values companies, nothing more. No company can grow its revenue forever. There has to be a point where a company hits a revenue wall.

    1. Should I feel guilty about still loving my iPhone 6 Plus? iPhone 7 will be an uptick in iPhone sales by virtue of the huge numbers who bought the 6 & 6 Plus on top of others i would think. Apple will be kicking the doubters again in the nuts hard by years end again.

  3. I dot think iPhone has peaked, it’s always about the product. The 6 series was a massive company being timid. Afraid of change. The just scaled up the smaller phone as a photocopy of the smaller phone. Same bug chin, forehead and bezels on an even bigger phone. The 6 series does not look like its from the same company that created the recent MacBook or the MacBook Air. It was a company scared to change their bread and butter product.
    The design was uninspiring at best, and as far removed from “insanely great” as conceivable for Apple.
    Many folks such as myself just said pass and we’ll look forward to what the next one looks like.
    And we’ll be eager to buy it too.

  4. The problem with most iPhone “Analysts” is that they are in the investment industry, and their job is to file reports which move stocks up and down . . . Instead, let’s try a long term view: 1) iPhone users who bought the iPhone 6 & iPhone 6 Plus in 2014-2015, and have 2 year contracts, will likely upgrade to the iPhone 7 in 2016 — which will lead to an increase in iPhone sales. 2) As the cell phone industry ends 2 year contracts, and Apple and others offer programs to “get the newest iPhone”, this will increase the number of sales, as people will get a new phone every year 3) As Apple continues to create a feature set that Android can’t match, you will see more Android users move to the iPhone . . . Thus, any doom and gloom predictions by “Analysts” are silly at this point in time.

  5. How can you say, looking at an iPhone sales graph since 2007, that Apple was “2 years late” in releasing large screened phones? It looks to me that they were right on time. The iPhone 5 and 5s sold phenomenally well despite having only slightly larger screens than the 4/4S. Apple timed its entry into the phablet market perfectly.

  6. The 6S may be late, but I think another issue may develop in the near future and that is cost. With the 6S cost nearly $1000 for the loaded version, I think that most people who purchase the 6S will not purchase a new model for quite some time. There will have to be a log10+ improvement in the next two or three models for MOST people will jump to it. Of course there will be SOME who will jump for the smallest improvement.

    1. Unless they are part of Apple’s new installment program which enables anyone me to get a new topped out spec iPhone model every year for no apenny more than the max payment of $40 per month

    2. The first Verizon 5G networks just went live for testing in San Francisco and Boston. Will be available to consumers starting in 2017. 5G is 50x faster than LTE. And you need a new phone to get it.

      1. Someone’s going to have a lot of fun analyzing (for realz) and writing about the last few months of WallNut Street lunacy. Maybe the 6 success is a factor, a sane factor. But there’s a big pile of not-sane to sort through as well, regarding the fun and games with AAPL’s price pounding.

  7. This of course happens every S year. Did the author just now realize this? Because I can assure you, Apple didn’t. That’s precisely why they’ve taken efforts to bring more people into a yearly upgrade cycle.

  8. Coincidence Dr. Drang?
    I posted this here on jan 26th 9pm:

    “………They added 18billion in profits to their cash.. Its meaningless to you………….
    Just normalize for last years exceptional holiday anomaly due to the larger phones…. And then consider the years currancy headwinds . Then see how apple did in the big picture.

    2012 q1… 46b rev, 13b profit
2
    2013 q1 …54b rev, 13.1b profit
    2014 q1….57b rev, 13b profit 

    2015 q1…..74b rev, 18b profit

    2016 q1…..76b rev, 18.4b profit

    Here one can see that the 2015 anomaly (spike) is the problem in the perception .. Not actual growth and performance in the bigger picture !

    go ahead and compare apples performance with pe of 10…. To those companies with pe of 30 to 1000…..”

    Very similar ..isnt it. 🤔🤔

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