Apple had a great financial year in 2014, achieving an approximately 13% increase in volumes of individual device sales over 2013. The iPhone 6 and iPhone 6 Plus have proved to be the smartphones of choice for people seeking an upgrade, and this has been coupled with a global market that is increasingly enjoying Apple products. On the other hand, Samsung have been failing to sell enough of their high end smartphones, so it is predicted that Apple iPhone sales will continue to increase during the next financial year and even reach the heady heights of 200 million sales during that period.
Do I upgrade to Apple?
If you’re currently an iPhone user, you may be wondering about whether to upgrade to one of the new iPhone 6 models, and you’re not alone. It is estimated that the majority of current iPhone users who have gone for an upgrade have actually upgraded from the older models of iPhone such as the iPhone 4, rather than from the more recent iPhone 5s. Estimates vary, but experts say that around 80% of US iPhone 6 and iPhone 6 Plus purchases in September 2014 were upgrades from older iPhone models, whereas this figure in 2013 was 65%. Looking at August to October 2014, over 85% of iPhone 6 and 6 Plus purchases were upgrades from an existing older iPhone model, with only 5% being users won over from Samsung.
The upshot is that Apple users were tending to stay loyal to the brand, and customers using Android and other platform devices were not being converted to Apple in sufficient quantities. However, with the new larger iPhone 6 and iPhone 6 Plus, this situation is changing, as surveys have shown that where an Android user does move to Apple, they tend to opt for the larger flagship devices.
New markets and retail presence
If Apple is really going to achieve 200 million unit sales in 2015, it needs to bring in more users who are new to iPhones, and that means venturing into the wider international arena. The iPhone 6 models look like becoming the fastest iPhone roll out in company history, with the iPhone 6 and iPhone 6 Plus made available to 115 regions by end 2015.
Apple plan to have an increasing retail distribution presence in several larger, new and emerging markets including India where the retail footprint will triple from their presence in 2013, China where the number of retail outlets will increase to 40 from the current 15 within 2 years, and Brazil where the first Apple store has just opened. Having the retail presence and showrooms where people can try out the Apple devices and compare them to their current mobile phones will be key to sales volume increases.
More carriers – large and small
Along with retail presence, Apple is increasing the number of carriers – the iPhone 6 was supported at launch by more carriers than previously ever seen, including the largest carrier in the world, China Mobile. NTT Docomo, a Japanese carrier is also a major player, having supported iPhones for 2 years. Apple is also working with smaller carriers across the globe, and these will have an incremental impact on sales growth.
The Chinese market loves Apple products, preferring them to Samsung at the high end, and the involvement with China Mobile will drive increased sales above and beyond 2014’s totals. This love affair with Apple should also pay dividends when users of other platforms come up for contract renewal, attracting upgrades to Apple devices.
Growing market share
From January to September 2014, Apple iPhones only represented 13% of market share, with Samsung doubling that figure to 26% The iPhone 6 launch changed all that – Samsung are losing sales of high end phones while Apple are increasingly selling more iPhone 6 than they did the iPhone 5 range.
In 2015, it is predicted that smartphone sales will still grow, but more slowly, finally achieving around 1.4Bn. The iPhone 6 and iPhone 6 Plus are capable of driving Apple to grow sales more quickly than the market growth rate, as it takes share from Samsung and takes advantage of the Chinese and Indian emerging markets. The fact that the iPhone 6 and 6 Plus appear to be the smartphones of choice for people looking for upgrades from both earlier iPhone models and Android phones can only be good news for Apple, making the estimate of 200 million iPhone sales in the 2015 financial year a realistic prospect.