Though it hasn’t been the main thrust of our business at Argus Insights, every quarter we round up our mobile data to see who is winning the battle for hearts, minds and wallets. Since we use public data mined by listening to consumers themselves, we’re able to judge the quarter almost immediately after it closes. These metrics have been successful in beating Wall Street estimates for both iPhone and Samsung smartphone demand almost every quarter for the last two years.
Apple seems to have made a habit of shocking Wall Street at the gaps between guidance and reality of late. After a slow holiday season, Apple suggested that Q2 was going to be very low and went on to sell more iPhones than any other quarter. I knew weeks before the street did. I knew because at Argus Insights we listen to consumers. When you listen to enough consumers, you can see where the market is going. Thanks to efforts by US carriers to move handsets with very aggressive promotions and continued success in China (yup, we listen to consumers around the world), Apple crushed it in Q2. We’re still listening to consumers and as soon as the quarter closed we knew what to expect from Apple.
We saw robust demand in the US, Europe and China for Apple iPhones, with sell-through in Q3 on par or above that of Q1, the holiday season. Apple continues to do well against Samsung in China but we are seeing some softness in the US market where Samsung demand went up while Apple’s dropped, but lower than expected. Consumer interest in the iPhone 5S has slowed in both the US and China. It is most disturbing in China where we see interest in the iPhone 4S exceed that of the 5S and 5C. Interest fell in the 5C at a lower rate in the US. So while Argus believes Apple will outperform Q3 2013, seeing the rapid drop in interest for the flagship iPhone 5S so far ahead of their next product launch signals a rough Q4 for iPhone sales.
I’ll go into detail of our methods and findings in a free webinar we are hosting on Monday 21 July at 1PM PST ahead of Apple’s earnings release the next day. You can sign up for one of the limited seats at https://argusinsights.com/webinars/apple_q3_earnings_webinar.html. Our proprietary methods of active consumer listening have enabled Argus Insights to beat Wall Street estimates of iPhone sales for almost every quarter for the past two years. Listen in on Monday to learn what we hear whispering around the corner for Apple and others in the Smartphone market.
I don’t know about you but my inbox has been awash with ads from Apple and others with first class tickets for a guilt trip if I don’t get my mom (or my wife) an iPaxly Fire tablet or Next S5 Dash 8 smartphone for Mother’s Day next weekend. The gadget blogs have all been discussing what is the best phablet to get for the mom that desperately needs more megapixels in their live and delivers more cores than Octomom! But this is for Mom. Do we want to trust the guidance for a gift to the person that brought us into this world to the manufacturers who seek to siphon off more of mom’s monthly income in the name of ARPU so that you’ll have to support her later in life? No! Do we listen intently to the same geeks that told us the iPhone was a toy and that vinyl was dead? No! We listen to the one that soothed our sore throats with love and honey, that kissed our skinned knees, that ensured us there are plenty of fish in the sea if we were patient. Mom, or in the case of Argus Insights, other moms.
We culled through the millions of mentions by tablet and smartphone owners to see for those that discussed mom, and determine which brands delivered an experience worthy of our maternal gratitude.
Within tablets there is little surprise that Apple comes out on top. What is surprising is that more iPad owners aren’t chatting about the awesome gift they got mom. Amazon hits the sweet spot for the balance between price and delight while, juggernaut Samsung lags just behind Apple. Across the board, those reviews that mention Mom were higher rated than the rest of the population, bolstering the notion that Mother Knows Best.
Smartphones tell a different story though with the same beginning with Apple still leading the pack, just barely but with the lowest mom mentions of all the brands. Moms tell us that they like Nokia Lumia handsets just as much as iPhones (Mom always did like a bargain). Oddly Samsung is beat out by Nokia, HTC, even BlackBerry, whose recent push on Enterprise Mobility might need to shift to Enterprise Moms instead!
While this has all been a bit tongue in cheek (because Mom taught me not to stick out my tongue), the results are based on actual consumers discussions of what tablets and smartphones they love. The same data we used to beat Wall Street on Apple last week is being used to help you think about what to get Mom this year. So do Mom a favor, get something that will make life easier rather than forcing more gigabytes down her proverbial throat the way she forced you to consumer castor oil as a child.
Although Samsung’s most recent quarter has investors concerned as to their growth prospects in smartphones, the recent launch of the Galaxy S5 portends a brighter future for Samsung and their suppliers, including Qualcomm and Synaptics. The S5 is the best launch Samsung has seen in over a year. Unlike the launch of the S4, which boosted demand for the S3 and iPhone 5, the S5 launch seems to have honestly grabbed consumer attention. Our traditional delight and buzz metrics show the S5 doing well across multiple US and Canadian Retailers, with an oddly rocky start at Best Buy. The new HTC One M8 is perceived as a better handset but the adoption has not been as high as Samsung for HTC’s new flagship. Both are impacting demand for Apple’s iPhone 5S as these new flagships prove to be competitive alternatives. Later this week we’ll look at why this is as we dive deep in to what consumers are loving (and hating) about these new handsets.
Last quarter, Apple guided the Street that Q1 would be softer than investors expected. Our analysis of consumer demand around the world indicates the rumors of Apple’s demise may be vastly exaggerated. We track consumer demand around the world and saw Q1 CY 2014 have a significant boost for Apple at retailers around the world. Whether this translates to increased revenue for Apple remains to be see when they announce earnings on 23 Apr. During Q1 many retailers had significant promotions on iPhones, notably Verizon’s efforts to defend against aggression by T-Mobile and AT&T let to significant demand for iPhones, Samsung’s Galaxy Note 3 and S4, and surprisingly Motorola made DROID smartphones. This could be Verizon seeking to cleanout excess inventory of smartphones whose hype did not translate into record sales as anticipated.
Consumer discussions of the Price/Value trade-off for iPhones also increased during Q1, supporting the notion that lower prices for these still relatively newly launched handsets is part of what drove increased demand. Best Buy’s promotions on the iPhone 5C over the holidays led to not only increased market adoption of the 5C but also a clearing of unwanted inventory by the large retailer in the face of much lower than expected sales for this entry level iPhone. Demand in China supports the assessment of increased Sell Through as well, with overall iPhone consumer buzz at an all time high. Keeping in line with the lopsided performance at launch, the iPhone 5S received five times the buzz of the iPhone 5C. What was most surprising though was the huge increase in iPhone 4S buzz, more than doubling the demand for the iPhone 5C. Whether this created increased revenues for Apple remains to be seen.
Around the world, we see increased demand for iPhones, prompting our assessment of increased sell through for Apple during Q1 2014. Whether this translates to increased revenue for Apple in the next quarter remains to be seen but so far competitive moves by Samsung and HTC have not impacted consumer demand globally for what Apple has to offer.