Apple claims they have "record" sales for iPhones. technically true, but the 51 million sales is relative to the 47.8 million sales in 4Q2012; a mere 7% increase. What, am I crazy... they went up 7%! No, I'm not crazy, IDC says the smart phone market grew 24.2% in 4Q2013. Things are even worse if you look at the whole year. Apple sold 153.4 million phones in all of 2013, growing 12.9% over 2012. Again, sounds good... no, not even close. The world wide smart phone market grew, 38.4% in 2013. Apple's market share fell from 18.7% to 15.3%. Apple's iOS is now the #3 operating system in 24 countries, with much of Europe expected to follow soon. (Italy, Poland, Finland and the Czech Republic are already there.)
As scary as the figures above are, things are worse than that. Apple profits on "record" sales were flat and they are projecting decreasing profit margins. Apple's supposed big growth area, China, has fallen flat, with only 350,000 to 400,000 sales in its 4 day launch. The future is clear, a shrinking user base, shrinking profits on shrinking margins.
This is a very serious problem for Apple. Over half their revenue comes from the iPhone. Worse, it is Apple's most profitable product. (Profit margins of 48% vs overall 37%.)
iPadsApple claims they have "record" sales for iPads of 26 million vs 22.9 million in 2012 (a 13.5% increase). Again technically true, but that had far more to do with the timing of iPad releases. The iPad mini did not release until November of 2012 and the "new" iPad never really took off. Remember that in this quarter, Apple launched 2 new flagship tablets: the Air and the mini w/ Retina.
And again, Apple's claim of a "record" masks the true situation. According to IDC (estimates at this point) there were 221 million tablets sold in 2013, a 53.5% increase, making Apple's 13.5% increase look pathetic. Wrap your head around this. In 2010, Apple had practically 100% of the tablet market. In 2013, it has 33.6%. (Apple sold 74.2 million tablets in 2013.)
MacsApple sold 4.8 million Macs vs. 4.1 million a year earlier. This is of course good relative to Wintel PCs. However, given that Apple had several major new refreshes affecting the quarter, it is far from exciting.
One great piece of news: Carl Icahn is likely to get stuck holding a great deal of overvalued Apple stock. His stock purchases and pressure on Apple to do stock buy backs is one of the few reasons Apple stock hasn't tanked already. (A major reason for recent AAPL increases in share price is the buy backs Apple is doing. A buy back increases share price, but does not increase the value of the company.)
Apple Earnings: The iPhone Suddenly Looks Mortal
The end is nigh for Apple - The beginning of the end | TechEye
Apple shares fall after muted iPhone sales | Reuters
Incredible Multi-Year iPhone Run Ends - Forbes
Apple's iPhone-driven growth run may be over
Sources for numbers in this post:
(Note: firm tablet and PC numbers are not out yet. But the estimates are likely to be close.)
IDC Worldwide Mobile Phone Tracker, January 27, 2014
Mac Rumors Apple Profit Breakdown
The State of the Tablet Market