Research Notes

Apple needs new mobile products

– four quarters without growth is not good news for a manufacturer that during the same period significantly expanded their distribution

A lot has been said and written about Apple’s entrance on the mobile market, but very few have analysed Apple’s results to any great extent and examined the relationship between Apple’s expansion of their distribution power and their actual sales results.

As many in the industry know, Strand Consult has been critical about the iPhone since the launch of the original iPhone. We have been closely monitoring this market and unlike many others in this business, carefully analysed Apple’s actual results and financial figures in relationship to the total mobile market. We have furthermore analysed how the iPhone has influenced many mobile operators’ business cases.

Strand Consult received a great deal of media attention in the summer of 2009, when we published and freely distributed over 10,000 copies of our report to the whole mobile industry. Especially the many Apple fanatics were very upset about our conclusions – despite being unable to point at any factual mistakes in our report. We called their reaction the “iPhone Syndrome”

once again turned our attention to the iPhone’s sales results, we now see that during the period from Q3 2009 to Q2 2010, Apple’s iPhone sales growth has been as flat as a pancake – despite Apple significantly expanding their iPhone distribution during this same period. IPhone sales during these four quarters were:

Q3 2009 – 7,4 million phones
Q4 2009 – 8,7 million phones
Q1 2010 – 8,7 million phones
Q2 2010 – 8,4 million phones

An examination of Apple’s distribution during this period shows that Apple launched in a number of new countries – including China, while simultaneously moving from giving individual operators exclusive rights to a market, to having multiple operator agreements on the same market.

In other words, despite having an increasing number of operators and stores in an increasing number of countries offering the iPhone to end users during this period, Apple’s iPhone sales have not grown.

In the last full quarter – Q3 2010 – Apple again saw growth in their iPhone sales. However this is most probably due to old iPhone customers purchasing the new iPhone 4G, which we described in a research note from

Strand Consult believes it will be difficult for Apple to further expand their distribution to any great extent and if they either do not launch new products, or alternatively significantly reduce iPhone prices, Apple will face a significant risk of their iPhone sales stagnating on a market where the general smartphone sales are exploding – resulting in Apple losing market shares.

Harsh words perhaps, but on the other hand the latest iPhone currently available on the market as the year 2010 comes to an end, is in many areas very similar to the original iPhone launched in January 2007. In reality, Apple has launched new technology packaged in the same old design with a minor facelift.

We believe it is most certainly worth taking a closer look when a company like Apple significantly expands their distribution power and then cannot report any increase in sales. The history books are filled with examples of mobile manufacturers that believed that they could launch new technology in old design and later had to admit that they were wrong.

Let us once and for all make it perfectly clear that we have absolutely nothing against the iPhone or Apple. But we do have something against journalists who completely disregard the sales and financial figures that are easily available about this market and uncritically write exultant stories about the iPhone and Apple. We described this peculiar phenomenon in this research note:

If you would like to learn more about Strand Consult’s workshop concept and how we can contribute with knowledge and information about the Smartphone Market and how it is developing, please do not hesitate to contact us by clicking here: 
More information:

The moment of truth, a portrait of the iPhone

Successful Strategies for the Mobile Broadband Market Show me the money – The future Business models for mobile Broadband Services. How to get success with Value added services on the Mobile Broadband marketHow media companies can get success on the mobile broadband market: How MVNO´s can get success in the Mobile Broadband market

Contact us to get a copy of the report

Request the report