If you said the iPad was a gimmick when you first heard about it, you are probably keeping it rather quiet now. Apple’s latest portable device has been another success, and possibly its most successful in terms of initial sales. Yes, it has benefitted from those that came before because of the company’s enhanced brand; but 29 million iPads in the first five quarters since launch (compared to 0.6 million iPods, and 6 million iPhones in corresponding periods) makes it by far Apple’s most successful portable in this respect. iPhone sales went up a notch with the first 3G model, while lower cost iPods arguably put sales of this type of device into a higher gear, but the iPad has hit the ground running.
Where does this leave Apple’s other devices? iPod shipments have declined year-on-year since 2008 as smartphones with MP3 playback capability ate into this market in general, but the record 20 million iPhones shipped in the last quarter indicates that the market for smartphones remains healthy. As we forecast in our recent smartphones report, we expect smartphone shipments to more than triple, from 302 million in 2010 to 1.0 billion in 2016. However, we predict that nearly a third of these to have an unsubsidised retail value of $150 or less, with many more in the standard smartphone price band ($151-$399).
While the current iPhone model continues to sell strongly, a new one is now due – according to most estimates, September. There has been some speculation that the next iPhone could be a ‘Nano’, suggesting a lower-cost, smaller version (as happened with the iPod). However, Juniper Research does not believe this will be the case.
For one, a new model alone has always seen sales pick-up – though they hardly need it at the moment. Furthermore, while hitting a lower price point with a device that sold at full retail price was necessary, iPhones are significantly subsidised by mobile network operators. Also Apple seems to have found an effective strategy by continuing to ship a lower memory version of the previous model (8GB iPhone 3GS) for those who want a lower-cost alternative.
Finally, Apple’s main competitors in the premium smartphone market have already launched devices with larger screens (4.3”, compared to iPhone 4’s 3.5”), dual-core processors and 3D, for example. While its latest results are impressive – to continue the theme of this blog’s title – this is no time for Apple to rest on its laurels. So expect the next iPhone to be a flagship device, not a mass market model.
Tags: Apple, iPad, iPhone, iPod, mobile, mobile device, mobile devices, mobile handsets, mobile phone, mobile phones, smartphone, smartphones
There were Orange posters all over the place a few weeks ago tempting people into a £60-a-month iPhone plus iPad package…I wonder how many people took the bait?
When you say “iPhones are significantly subsidised by mobile network operators”, any idea how much? A typical iPhone contract costs about £900 over two years as far as I can tell.
Apple do, indeed, need to keep pushing the blueprints but could there be room for a “nano” version as well? They wouldn’t want to risk diluting their premium image, though…
Thanks for your comments Eoghan.
In our recent report we looked at smartphone subsidies in some detail. In the US, for example, there is an initial flat cost for the iPhone – regardless of monthly plan cost. But this is $299 (~£180) for the 32GB model – compared to $799 (~£480) unlocked. While you may pay two or three thousands dollars over two years, many people prefer to spread the cost – as is evident from the number of postpaid subscribers.
An iPhone ‘Nano’ is an interesting product and may happen further on, but you’re right that Apple has an image as a premium smartphone vendor, and this doesn’t feel like the time for that change…