EC What Happened To The Iphone?

When Apple (AAPL) first came out with the iPhone in 2007, it was truly a revolutionary product. Even for those of us who hadn’t been impressed with Apple’s computers had to tip our caps to Steve Jobs (and team) for what they had pulled off. He knew it, of course, which is why earlier that year Apple Computer had dropped the latter word from its corporate name to become simply Apple Inc.

As with any new introduction, sales started minimally. In its first quarter on the market, Q3 2007, Apple sold all of 27 million units. The ramping up of adoption, however, took very little time and was all the more impressive given the economic backdrop of the process. In Q4 2008, during the worst global economic climate since the Great Depression, the company managed sales of 6.89 million. That was a 515% gain at a time when other major mainstream companies were begging the Fed for commercial paper funding as their baseline revenues plummeted.

Those massive growth rates didn’t last forever, nor was anyone expecting that they would. At some point a new and innovative product becomes a mature one. In Q1 2012, Apple shipped 37 million iPhones for a gain of “just” 128%. Late in 2014, the iPhone 6 was introduced, sprinkling a little more magic into shipments of 74 million by Q1 2015. That was a substantial increase befitting the long lines at Apple stores, growth of almost 46% from Q1 2014.

That was the last of it, however. Despite several new versions and models introduced over the intervening three years, Apple can find no more excitement. As of Q1 2018, the company reported just 77 million sold and shipped worldwide. That’s not even 4% more than the company managed three years prior. And it was down 1.2% from Q1 2017.

What happened?

Like anything else, there are a number of factors to consider, including tablets. Buyers are less impressed, and enthused, by new models which don’t offer as substantial improvements as earlier model switches had. Apple also has several key competitors who have caught up and in some ways surpassed the iPhone. Dominance is no longer a given.