Many people, including myself, were pretty disappointed when iPhone 4S was announced, saying that it’s such an incremental change compared to the iPhone 4. Again, Apple used some of their secret magic to stun all the pundits, announcing that they sold 4M iPhones 4Ss over the first weekend.

To get a sense of how large this number is, take a look at the bar chart above that shows unit sales of iPhones (all models combined). They basically sold as many iPhones in a single weekend as the entire first quarter of 2009! FYI, one quarter is 3 months, 90 days. This is just incredible, especially given that so many pundits, again including myself, expressed disappointment right after the new release.

The bar chart above shows other interesting trends a well.

4th quarter (red bar) has the strongest sales
This is mainly because of the holiday season. There’s a reason that all companies involved in the consumer electronics market works like crazy to get their products out before the holiday season. If they miss that deadline, it’s not just a couple months they lose, but a huge chunk of the annual sales. Q4 sales in 2009 seems weaker than other years, possibly due to the recession.

Unit sales rising 2x every year
There’s no data for Q4 of 2011, but you can tell that the other quarters have risen 2x compared to 2010. This is surprising especially because 2011 is the year when Android started to release well designed phones that could compete well with the iPhone. Samsung Galaxy S, HTC EVO were all released in 2011, but Apple was able to continue growing 2x per year with the iPhone 4. Who knows how large the Q4 2011 sales would be with the new iPhone 4S selling 4M in the first weekend? The holiday shopping season hasn’t even started yet!

Potential for more growth: mobile market


An optimistic guess for 2011 iPhone sales would be 100M. Compare that to the plot above showing total sales of “smart” devices. Smartphones sales in 2011 is projected to be 450M, and expected to grow to 1.1B in 2015! There’s a lot of room for growth, but given the competition from Android handsets, it would be interesting to see how iPhone sales grow in the future.

Potential for more growth: Asia-Pacific market

The pie chart above clearly shows that the Asia-Pacific market is going to be the main source of growth for Apple in the future. Note that it’s not sales data just for the iPhone, but the entire sales of Apple. 25% of net sales might look like a small number, but given that there’s only 5 Apple stores in China (compared to 245 in US), this is very impressive. This means that Apple hasn’t even started to focus on the huge Chinese market yet. Once they start to put their energy into the Asian market, that 25% pie is going to grow much more.

After totally getting it wrong with the iPhone 4S, I dare not predict how iPhones are going to sell in the future. One thing that Apple teaches us is that “selling” is totally different from improving the technology. People say they buy iPhones because of better user experience, but I’m not really sure if that explains the whole story of the iPhone buying frenzy. iPhones do have a bit smoother interface than Androids, but Android has their benefits too, such as the Swype function that lets you slide your finger across multiple letters on the keyboard instead of typing one by one.

I think the main recipe for iPhone’s success is making the buyer feel good. This is why Apple made Apple stores when everyone else thought that was a terrible idea. They wanted to optimize the entire process of buying Apple products. They can make the buyers feel good about themselves for buying Apple products! It’s really hard to make people feel good after charging them $200-300, but Apple somehow makes that happen.

I think people doing business, especially engineers willing to do business should learn from Apple and stop whining about technology not affecting the product. This includes myself. Business is all about selling more products to customers. It’s not about whether the product has a breakthrough technology. If the technology can help attract more customers, it is important to the company, but if that’s not the case, there’s no reason to be dictated by developing that new technology. In the end, all that matters is attracting more customers, whether through building fancier stores or giving fancy keynote speeches.

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