Apple chart: Why iPhones, iPads are key to future results

A chart depicting the products that Apple sold for this quarter.

Apple Inc on Wednesday announced its results for Q1 2013 and the company posted a quarterly revenue of $54.5 billion and a quarterly net profit of $13.1 billion. While these numbers are a record by themselves for Apple, for Wall Street these numbers were just not good enough as Apple missed forecasts for the third time.
In q1 2013 Apple sold 47.8 million iPhones, up 29 percent from the year-ago period where it sold 37 million iPhones. This was however below the 50 million number that was forecast.
In the tablet category, Apple sold 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The company did not reveal numbers for iPad mini separately though so it’s not clear how well the iPad mini did.
As far as Macs were concerned the sales declined and Apple sold only 4.1 million Macs, compared to 5.2 million in the year-ago quarter. iPods too saw a decline with company selling only 12.7 million compared to 15.4 million in the year-ago quarter.
Clearly as the chart above shows, Apple’s biggest selling products are the iPhone and iPad. Here’s a quick look at some expectations from both.

iPhone: There’s no doubt that the iPhone has been the jewel in Apple’s kitty, and the one device that revolutionised the smartphone industry. But with the rise of Android and Samsung, the iPhone is often seen as too expensive and lacking some features. Rivals have created smartphones with bigger screens; the Galaxy S III has a 4.8-inch screen while Apple has only increased the size of the iPhone’s screen with the latest model. iPhone 5 has a four inch screen and some feel Apple needs to change this.
Then of course there is the high-price of the iPhone which makes it a very expensive smartphone to buy, especially in developing countries. In China, the world’s most populous nation with over 60 percent smartphone users, Apple is currently at number 6 in the market, according to research firm, IDC.

The iPhone 5 and the iPad mini seen in this combo. AFP

There were reports earlier this year that Apple could launch a cheaper iPhone with less expensive materials, such as a shell made of polycarbonate plastic. However Apple’s marketing chief Phil Schiller dismissed such rumours, stating that Apple wouldn’t resort to such tactics to grab a larger market share.
Interestingly the iPhone 5 is the top phone in the US market with a share of 48.1 percent according to Kantar Worldpanel, which measures smartphone sales data.
But this is a narrow lead and for most analysts the demand seems to be clear. If Apple wants to challenge Android, it needs to push out more versions of the iPhone, say perhaps with bigger screens and maybe a cheaper device. Tim Cook however feels that the current size of the iPhone works just fine.

iPads: The tablet market is one where Apple is still the global leader. Although Apple did not reveal the number of iPads and iPad mini devices sold for the quarter, this is one device where Android tablets haven’t overrun the market. According to research firm IDC, Apple has a 53.8 percent tablet market for the year 2012, and while this will slip to 49.7 percent in 2016, the Android army won’t catch up. In fact IDC expects Android’s tablet share which is 42.7 percent for 2012, to fall to 39.7 percent in 2016.
The truth is that the iPad still doesn’t have a serious rival. Google’s recently launched Nexus 10 tablet is still facing supply issues. Moreover Tim Cook, Apple’s chief executive, believes the iPad is already cannibalising sales for Macs, something he doesn’t see as a problem. He also said that the iPad is posing a serious challenge to Windows sales and expects the growth in tablets will lead to pressure on PCs.
However there have been reports that Apple cut supply orders from supplier Sharp for the screens of the 9.7-inch iPad as it attempts to deal with demand for the iPad mini.
Will iPad mini have a negative impact on the sales of the iPad in future? For now that doesn’t seem to be clear but there’s no doubt that 7-inch tablets could pose a serious challenge to the iPad and mini in the future.