asymco
Latest
Asymco graphs Apple's distinctive growth curve and longevity
Look at the major PC vendors in the 1970s, then look at the same industry today. You'll find only one name common to both periods: Apple. The company's competitors from the early days of the PC industry have all either gone out of business, been absorbed into other companies, or shifted focus to other industries. Even once-mighty IBM got out of the business of selling PCs to consumers in the mid-2000s. Not only is Apple by far the most long-lived company in the PC industry -- almost 36 straight years selling computers to everyday people, compared to 24 for IBM and 20 for Compaq -- Apple is also the most profitable PC vendor by a wide margin. Apple has bucked the overall industry trend in terms of both its longevity and profitability; its competitors from the early years have long since flamed out, while its current competitors are, with few exceptions, struggling to stay relevant. Horace Dediu of Asymco has graphed both Apple's longevity and the number of units it's shipped year over year compared to its competitors, and as usual his graphs provide a very instructive view of Apple's performance (which I'd encourage you to check out for yourself). According to Dediu's graphs, Apple is the only current PC/device vendor shipping more than 100 million units per year; no one else is even close to shipping that much out, and thanks to Apple's tight supply controls, units shipped generally translates very closely to units sold. When the graph gets adjusted for longevity, that's where the real craziness of Apple's performance becomes clear. Other historical PC vendors like IBM and Compaq enjoyed initial exponential sales growth that eventually tapered off, then ceased altogether. If Apple behaved like the rest of the PC industry, the same thing might have happened to it; Apple's performance looks eerily parallel to that of IBM for most of its life, but the performance takes way off again in the mid-2000s for some reason. Rather than showing signs of tapering off, it keeps increasing exponentially. Philip Elmer-Dewitt of Fortune analyzed Dediu's findings and says "it puts the lie to Wall Street's consensus view about Apple's future growth." Based on historical performance of other PC vendors, Wall Street analysts keep expecting Apple's performance to taper off and reach a more steady state -- still positive growth in sales and profits, but more of a linear growth than the huge gains of the past few years. Looking at the big picture, though, that view isn't supported at all. Apple's performance looks nothing like that of its competitors when you look at its entire history; if Apple had behaved as it "should" according to what's happened to its competitors, then it should have gone out of business in the mid-90s as we all feared it would. Instead, Apple keeps redirecting its focus rather than staying the course, and its performance over the past five years clearly reflects that. If Apple had never introduced the iPhone and iPad, the company's growth almost certainly would have slowed down years ago; man cannot live on Macs and iPods alone. Yet though Apple is by far the longest-lived of the PC vendors, it owes that longevity to a willingness to adapt. Both in terms of the products it sells and its overall focus, the Apple of 2012 is a very different company than the Apple of 1976, and the fact that the company has developed itself into a swiftly moving target means it's unlikely Apple will suffer the fate of its historical competitors anytime soon.
Discarded iPhones in the US
Horace Dediu of Asymco is good with numbers and his latest work uses this skill to look at discarded iPhones in the US. Dediu takes monthly comScore data and quarterly activation data provided by the wireless carriers to calculate the install base of the iPhone in the US. His number crunching and resulting graph shows the number of new activations and the calculated number of iPhones being put out of service each quarter. According to Dediu, the discard rate, which is the number of phones being discarded over the number of new phones, is 50% in the US. Most of these discards are coming from AT&T as Verizon has not carried the iPhone long enough for customers to begin replacing their handsets with a new model. Dediu claims most of AT&T's reported activations were from customers replacing iPhones and that the carrier only added one million new iPhones thus far this year. He also points out that AT&T's discard rate has skyrocketed to 81% since Verizon introduced the iPhone 4 earlier this year, a figure that suggests AT&T is adding fewer new iPhone customers now that people have a choice in wireless carriers. It's an interesting look at the iPhone that goes beyond unit sales. You can read the full report at Asymco's website.
Asymco graphs Apple's performance under Steve Jobs
Asymco always has great graphical analysis of Apple's performance, and the site's latest is no exception. Dirk Schmidt has analyzed Apple's market cap during the Steve Jobs era, and the graphs show just how dramatic Apple's turnaround was during Jobs's time as CEO. At the beginning of Jobs's tenure, Apple's market cap was lower than every one of its competitors. But after an average 42 percent increase in market cap from 1997 to 2011, Apple became the most valuable publicly-traded company in the world. Asymco's second graph, which shows Apple's of combined market cap among its competitors, shows how dramatic an effect Apple has had on the tech sector. Almost everyone is getting squeezed by Apple's ascendancy, but it seems Microsoft has been hit hardest of all; the company that Windows built has gone from over 50 percent of the market cap share down to measurably less than Apple's share. If you're a graph junkie, definitely head over to Asymco and check out their analysis for yourself.
App Store downloads overtake iTunes music downloads
Right after Apple's announcement that App Store downloads had passed 15 billion, Asymco ran some numbers and concluded that App Store downloads have surpassed iTunes music downloads. Asymco based its conclusion on Apple's announcement only one month earlier that iTunes song downloads had passed 15 billion. Since App Store downloads have grown at a far faster rate than music downloads over the life of both stores, Asymco's most likely correct that app downloads have passed song downloads. According to Asymco's data, app downloads amount to at least 31 million per month, while around 12 million songs are downloaded each month. That's an explosive rate of growth for the App Store, especially since it took nearly seven years for music downloads to pass 15 billion while app downloads passed the same milestone in three years. To get a visual idea of how quickly the App Store's taken off compared to music downloads, head to Asymco and check out the data graphs. But while you're there, try not to snicker at the tiny orange line representing iBooks downloads...
Annual revenue per iOS user estimated at $150
We all know that Apple's iOS devices are popular. Surveys and analyst predictions place Apple at or near the top in the smartphone, tablet and media player market. That's great for headlines, but what does it mean for Apple's bottom line? Horace Dediu of Asymco did some fancy figuring and calculated that the annual revenue for each iOS owner is US$150. This is based on 180 million current iOS users with 200 million iOS devices. Given the astronomical growth of the iOS platform, this installed user base could quickly climb to 500 million users, a lofty figure that would provide Apple with $74 billion per year in recurring revenue. Mac sales are also climbing and could easily reach 100 million active users who generate $24 billion a year in revenue. Combine the Mac users with the iOS users and Apple could pull in a cool $95 billion per year in revenues from OS X and iOS devices alone. These numbers are a conservative estimate as Dediu does not factor in sales from iTunes, iPods, accessories and software. It also assumes a very generous 3.5 year life span for iOS devices and 5.5 years for Mac hardware.
Report: iTunes costs $1.3 billon per year to run
An interesting report from Asymco estimates that it costs Apple US$1.3 billion per year to run the iTunes store. That sum was reached by examining known numbers, like the total number of songs, movies, TV shows and apps that have been downloaded, plus the number of iTunes accounts and how much Apple has paid out to developers. Those figures were cross-referenced with the average price of songs and apps to get a monthly "content margin." Asymco estimates Apple's monthly content margin cost for iTunes at $113 million, which is more than $1.3 billion per year. Based on past statements by Apple executives, Asymco assumes that the iTunes store is a break even business, and any profits it realizes go right back into its maintenance and expansion. Specifically, Asymco's researchers believe that most of the profit goes into serving content (traffic and payment processing), while some goes to "curation and support," and anything left over goes towards increasing storage capacity and other services.
Apple could survive on current cash alone until 2018
During the 2Q 2011 Apple Results Call last Wednesday, we listened with rapt attention as the number for "Cash and Cash Equivalents" figure was announced. The number, as you may recall, was US$65.8 billion. One question that many of us always ask is "What could Apple do with that money?" Asymco analyst Horace Dediu always provides fascinating insights, and in a post yesterday he not only did a breakdown of the sources of that cash, but did some comparisons just to show how huge the cash stash is. The pile of simoleons is made of "only" $15 billion in cash, about $14 billion in short-term marketable securities, and the rest -- about $37 billion -- in long-term marketable securities. Dediu's comparisons are staggering: If Apple's revenue stream was cut off today, the company could sustain operations (research and development, sales, general and administrative expenses) for seven years Apple's folding money is worth half of Google's enterprise value Those funds place Apple's CFO office into the top 100 of fund managers in the world, bigger than any hedge fund manager The cash growth in the last quarter was higher than the market capitalization of many companies. What's really amazing is that the rate of growth of Apple's hoarded lettuce appears to be increasing. What do you think Apple should do with all of that cash? Leave us your ideas in the comments. [via The Apple Investor]
Analysis: 100 million iPhone 5s could be sold
It's no secret that Apple's iPhone is a runaway hit. But if past history can determine future success, you ain't seen nothin' yet. The word comes down from Asymco analyst Horace Didieu. In a whimsically-named report titled "Predicting iPhone Sales for Dummies," Didieu looked at sales data from all iPhone models to date and noted that they followed a specific trend as old model production transitioned into building the new model. Based on the trends, Didieu made some rough forecasts -- the iPhone 4 will sell anywhere from 60 to 65 million units before the next iPhone debuts, and it has at least one more quarter of production life left (although some websites are pushing the iPhone 5 launch back to 2012). Over at 9to5Mac, blogger Christian Zibreg did his own take on the data and realized that an iPhone 5 could sell about 100 million units before the 6th generation device appears. Since worldwide demand for smartphones of all flavors is expected to be in the range of 500 million over the next two years, it's not unlikely that Apple will sell a good number of those devices. With the strong retail presence that Apple has built up since 2007, as well as the thriving developer community in the App Store, the next iPhone could be even more of a success than all of its predecessors put together.
iPhone profits swamp competitors
Now that the flurry of earnings from the last months of 2010 have been announced by all the major mobile phone manufacturers, Horace Dediu of Asymco has summarized these figures in several stunning graphs. The market analysis company has compared the market shares, sales shares and profit shares of the top eight mobile phone manufacturers in the world. While Nokia and Samsung lead in market share and in sales share, Apple thoroughly trounced them all when it comes to profit shares. This is not the first sign that Apple leads the pack when it comes to earnings and not volume of handsets sold. An earlier report suggests Apple's revenue from the iPhone and its accessories exceeds Nokia's revenue from its mobile devices and Ovi-branded services.
Analyst report: Why Verizon wants to sell the iPhone
Let's say straight out, this is just the opinion of one analyst, and the opinion is based on sales data assumptions that might or might not be accurate. Still, it's an interesting report, and it might help explain why Verizon, which originally rejected the iPhone, wants it back. Horace Dedlu over at Asymco says basically that Verizon is having a rough time with smartphones. He cites three issues that are making life difficult for the big V. The iPhone has stolen its growth It's facing the prospect of a single OS platform supplier Android is not competitive vs. iOS The report, citing sales estimates, says that while Verizon has been growing sales of smartphones, AT&T has been outpacing Verizon by significant numbers. While Verizon increased sales from 2.7 million units in Q1, the iPhone at AT&T went from 2.7 million to 5.7 units in the same time period.
