Updated quote with WSJ correction:
https://twitter.com/daiwaka/status/560882525854121984
While few would expect the record-breaking surge in iPhone sales generated by the larger-screened models to continue into subsequent quarters, Tim Cook argued in a WSJ interview that the potential is there.
In an interview, Apple Chief Executive Tim Cook, not surprisingly, argued that the demand is more than temporary. He said fewer than 15% of older iPhone owners upgraded to the iPhone 6 and 6 Plus and that the majority of switchers to iPhone came from smartphones running Google Inc.’s Android operating system.
“We certainly believe there are legs to it,” said Mr. Cook of the iPhone sales surge.
Cook noted during the Q1 earnings call that the current iPhone lineup had experienced “the highest Android switcher rate in any of the last three launches.” With CIRP data suggesting that the US rate of switching from Android to iOS has remained broadly constant, that suggests the bulk of switchers have been outside the US–China in particular …
Not even Cook would suggest that a company of Apple’s size could enjoy a 30% jump in year-on-year revenue two quarters running, but the company has issued guidance suggesting growth of between 14% and 20% this quarter.
Cook’s optimism stems from the fact that most iPhone owners have not yet upgraded. Add late upgraders to a continual stream of switchers, and you have, he believes, a recipe for continued strong growth. The Apple CEO also insisted that there remained upside potential for the iPad, despite a 22% drop in revenue.
Analysts are not so sure. While a Thomson Reuters poll of analysts found that the consensus view was for 22% revenue growth over the full financial year ending this September, they expect the bubble effect of the switch to larger displays to end by then, with growth dropping back to just 4% the following year.
Cook would argue that slowing growth in iPhone sales will be compensated for by other revenue streams, including the Apple Watch–launching in April–and both domestic growth and international expansion for Apple Pay. The App Store, too, is growing at a rate that would see it become a significant contributor to Apple’s total earnings. One thing for sure: it’s going to be an interesting ride …
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Before it was Android, but I guess it is now Apple’s iPhone that is an illiterate product; it only has numbers to show for¡
Duh, it was an earnings call. Numbers is all that matters there.
And it’s okay. I don’t want to be stuck on something for ever, hopelly I’d buy one in the future. I like to try new things.
“Cook’s optimism stems from the fact that most iPhone owners have not yet upgraded.”
As a 5S owner who will no doubt be getting a 6S or whatever its called, he has good reason to be optimistic.
I have friends still using iPhone 5s that will be upgrading to the 6 soon.
Make that 2 of us… praying the 6S will get the optical image stabilizer!
Not sure it needs a stabilizer. It’s a pretty wide angle lens. Much less need for a gyro on lenses wider than 50mm and I’m guessing the iPhone lens is 28mm.
I think the dilemma for many iPhone 5s users will be whether they want to upgrade to a 6 or 6s or just buy an Apple Watch, instead. Other than the lager screen sizes, the barometer and faster processor and motion co-processors, the biggest feature, Apple Pay, can be achieved with an Apple Watch and that wouldn’t cause you to have to extend your phone’s service contract for a guaranteed minimum time period.
That’s a good point. I can only speak for myself: I’d rather have a new iPhone with Apple Pay and the various other updates that will no doubt be in it. I’ll no doubt get the watch at some point but I’m not going to be first in line (or so I think now).
Apple creates fabulous products. I am completely “Apple-ized” now. I have my iPhone, MacBook Pro, iPad mini, Mac desktop and I just bought my iPad air2. I’ve tried the other brands, but they always come up lacking. Apple definitely knows what they are doing when it comes to tech development.
No Apple TV? if you don’t have one yet, i think you should get it.
And Time Capsule too for auto saves… ;p
Yeah, if you are investing in iTunes media for all of those beloved Apple products, then an Apple TV is a natural addition. I bought my first Apple TV 7 years ago and have since added six more to my home. Every TV has one attached to it (one TV only has an Apple TV connected to it and it gets constantly watched even though it is only a 19 inch TV), and I carry one in my computer bag. And, now that most major hotel chains are upgrading to flat screen TVs I take one per reserved room with me when I travel too (I take the ones attached to my TVs). It is simply one of the most elegant ways to experience all of the media my family wants to watch in one device. (And, yes, I set up my MacBook Pro as an iTunes media server overnight so my kids can watch movie after movie until they fall asleep.)
As a previous Android user, after the switch to Apple I can’t go back. In fact, I have tried a couple of times (Sony and Samsung phones). Both times I was reminded what a pain in the rear Android is and how much it has to be baby-sat to keep it running at it’s peak. Plus, once you are in the apple eco-system and have paid for apps, you aren’t going back to android to re-buy them. 3 years on android and I never paid for a single app!
I’d rather pay for apps I know won’t brick my phone or send every keystroke to another country. Android may lead the market in free apps, but they also lead it in mobile malware.
With that said, most of my apps on my iPhone and iPad are free apps.
And yet, less then 1 percent of Androids actually get malware but hey, let’s use that malware excuse.
I agree. I had a couple of different Android phones prior to AT&T coming into my area so I could become an iPhone user. The biggest frustration that I experienced, and this is the biggest reason I would never go back, is that I was never able to upgrade the Android OS on my phones. I would have to purchase a new phone just to use the latest version of the OS. Upgrades are dependent on Google, your carrier, and your handset manufacturer getting together and tailoring the new version of Android to work not only with your handset but the carrier’s system as well. Too many let downs. I love that the only limitation in upgrading iOS is if your hardware is too old to support the new upgrades. That means you can go 5 years or more before being left out of the party forces you to need to upgrade your handset.
” year ago, Apple Inc. announced disappointing iPhone sales that seemed to confirm long-simmering concerns that the company’s best days were behind it.”
What disappointing sales is he referring to?
I find it hard to believe only 15 percent upgraded their iPhones to 6’s.
I was a every year upgrader since the iPhone 4. I held off this year and let the wife get the 6+. So I’m part of the 85% that didn’t upgrade.
That doesn’t mean only 15% of iPhone users upgraded. It means that of all the iPhone 6 sales, 15% of them were previous Android users. That 15% could still represent a gigantic portion of older iPhone users upgrading to newer iPhones.
If I read it right, he is saying over 70 percent of 6 purchases were from Android users? Yea, don’t think so.
Android users got completely fed up with getting OS upgrades months and months after Google released them. Some carrier salesperson had told them something like “Yeah, this Android smartphone is just as good as any iPhone and even has better specs at a cheaper price.” $Ka-ching$! A lot of consumers get stuck with Android smartphones because of some stupid salesperson trying to make a commission. The best way to get rid of Android smartphone inventory is to lie to the naive consumer. You can fool the consumer once but it’s going to be a lot harder to fool them a second time. They get burned by Android once and they’ll be looking for Apple and iPhones the next time around.
Apple is going to continue to grab Android smartphone users as they get sick of the entire fragmented Android ecosystem. Once a consumer gets his Android smartphone out the store, it’s goodbye and no one knows you anymore. If you have any problems, you’re on your own. Apple is definitely going to have it easier going forward from this point on especially with Apple Pay on the rise. It’s about time Android’s discount-driven astronomical growth finally comes to an end.
Most Android users don’t care about updates….
You’re right, that happen to me at t-mobile (Mid 2013) when I got my iPhone 5, they try to convince me that the android is better and with a lower price. I was like no, because I had the htc evo v 4g(Aka Htc evo 3D) from virgin mobile, and I did not like the experience at all, and I rooted and unlock the boot loader to change rom just to have that experience I was looking for, but I had no luck. That’s why I got the iPhone 5 because overall, the quality is wonderful and experience is great.
So that one guy who bought a Windows phone has or hasn’t switched, yet? :-p
I completely called this like 8-9 months ago, I posted on here and other blogs that my feeling is that Android’s biggest advantage over iOS, and Samsung’s ONLY advantage over Apple is screen size. That once iPhones got big, it was all over. Not all over as in Android is done, no no, that’s impossible. But all over in terms of “Apple is doomed” nonsense and “Samsung rules the world”. I knew things would change drastically and look now! The reason is simple…. most people, not the people on tech blogs, but most average consumers, don’t give a shit about the OS as much as we think they do. They want a big screen, with a great camera, and is easy and fun to use. Period. The iPhone fills that better than any Android phone. It’s a consistent brand with consistent support. With Android, you don’t know what you’ll get next. Be together not the same is a great ad campaign, I genuinely like it. But while it sounds great in a commercial, it comes with major downsides. It is for these reasons people are switching to iPhones with big screens now in droves.
I don’t think the drop in iPad revenues will hold for long. Once more iPhone users upgrade from iPhone 4 models and the iPhone 5, they are going to end up with the same dilemma many of us have already run into. We have come to love the total functionality of our iPhone 6 models and find ourselves in much the same position the original iPad owners (2010) ran into when transitioning back and forth between their computers and their iPads. I cannot count the times I would be using my MacBook Pro, after having spent a long period of time away using only my iPad, and would be beating my screen with my fingertips and cursing Safari for not responding, only to realize, “Oh yeah, dummy, this isn’t your iPad. The same thing is happening now when I transition back and forth between my iPhone 6 Plus and my iPad mini. the button configuration is wrong and it doesn’t unlock just because I let my finger rest on the home key. I go to lock the screen when I’m done and all I achieve is changing the volume. Plus, I would love the camera on my iPad to have the same speed and functionality that my iPhone 6 has.
In short, when my tax return comes this year it’s going to be a hard choice of whether or not I buy an Apple Watch or a new iPad. My kids will vote for the new iPad because they will be waiting with baited breath to see who gets my hand-me-down.