Final thoughts on Apple's Q2

I've written a long (36 slide) deck for Enders Analysis on Apple and the smartphone and tablet markets, which will be out for clients on Monday. There are lots of different moving parts, and lots of different things to consider. I wrote a good-sized blog post on the iPhone issues (i.e. is the market for $600 phones saturated?) here, which got 17k views. 

Fundamentally, though, Apple is two stories: iPhone and iPad. The iPhone is a premium product and smartphones have now passed 50% of all phone sales - it is possible that the market for premium phones is now approaching saturation (though I'm not convinced). Meanwhile the iPad clearly is nowhere near saturation, but at the same time the potential of that product and indeed the entire market is much more speculative: the tablet market could be anything from 300m to 900m units a year (and possibly even more). 

In other words: 

  • Potential limits to iPhone growth are clear and could be quite close
  • Future growth of the iPad could be huge, but is much more speculative 

Meanwhile there isn't going to be any new Apple hardware until the autumn (i.e. both the iPad and iPhone remain on an annual release cycle for now and the iPad moves to the Christmas buying period with the iPhone), and the sales cyclicality is intensifying so sales will dip down until then. That means that the next chance for a growth spike at Apple, and an answer to the 'is it growing?' question, won't be until the December quarter revenues come out in January 2014. That's going to be a long wait.