Is Apple running out of new customers? That's an inescapable question as analysts estimate lower numbers for Apple's top-selling iPhone and iPad next year. Early indications also suggested Chinese consumers were largely shrugging their shoulders at the iPhone 5 launch, bad news for what was seen as a promising emerging market.
News reports that an analyst for UBS Investment Research lowered predictions of first-quarter iPhone sales to 48 million, down from 52 million and overall profit expectations two points to 40 percent caused Apple's stock price to drop, falling to 508.97, down 3.91 percent at closing Friday. UBS also saw the iPad mini cannibalizing sales of the more expensive iPad models.
iPhone Predictions Lower
ABI Research wireless industry analyst Mike Morgan told us he had already predicted lower volume for the iPhone, 39 million for the fourth quarter, 38 million for the first quarter of next year, 36 million for the second quarter and 33 million for the third quarter. His annual estimate for this year is 127 million, which will grow to 160 million iPhones next year.
"There is still growth but what we are seeing is the slowing of Apple's growth," Morgan told us.
"It needs to slow down and you can expect in 2013 to start to see that. Apple is starting to bump up against the edge of its addressable market. That's what happens when growth is no longer driven by opening new markets. It is now based on stealing market share from competitors, or on iPhone customers who upgrade. Whenever you move from growth to retention of growth it always slows down."
According to October numbers from ABI, South Korea's Samsung Electronics, now the world's leading handset maker, shipped twice as many smartphones as Apple in the third quarter, an increase of 20.7 percent year over year. Apple saw a bigger increase, 57.6 percent, but its total was 26.9 million compared with Samsung's 102.6 million.
Last month, Strategy Analytics said Samsung's flagship device, the Galaxy S III, outsold the iPhone 4S in the previous three months, although many customers were waiting for the iPhone 5, which will probably take the top spot in the next analysis.
But Morgan of ABI sees the market share of people who have been waiting to get their hands on an iPhone deteriorating.
"What's left is to spread to emerging markets where high-priced items are a very tough sell," he said. "I don't think they have that equation yet. The $150 Android phone isn't as good as the $600 iPhone [unsubsidized price], but it's good enough."
Not Different Enough?
The iPhone now accounts for about half of revenues for Cupertino, Calif.-based Apple, which once primarily sold computers. But Morgan notes that the refresh of a device in the past, the iPhone 4 over the 3GS for instance, generally became 90 percent of all iPhone shipments. "I'm starting to believe the iPhone 5 will not accomplish that."
One reason, he said, is that the 5 is compatible with long-term evolution data speeds, while not every area and not all carriers can accommodate that standard. Another is that the iPhone 5, though larger and faster, is not substantially different from its predecessor. Samsung tends to revolutionize its devices more between models.