Wednesday, May 14, 2014, 06:54 am PT (09:54 am ET)
Continued popularity of Apple's legacy iPhone 4S added estimated 10M iPhone users last quarterThough the iPhone 4S is now more than two and a half years old, it continues to be a strong seller for Apple, with one new estimate suggesting it accounted for 25 percent of iPhones sold by the company last quarter, drawing in nearly 10 million new users to the ecosystem.
Analyst Charlie Wolf of Needham & Company issued a note to investors on Wednesday, a copy of which was provided to AppleInsider, in which he broke down the pricing on Apple's iPhone models to estimate how strong of a performer the iPhone 4S was in the March quarter. Such steps are necessary because Apple does not break down sales on a model-by-model basis.
Apple revealed that the average selling price of the iPhone was $596 last quarter, divided between the $650 starting price for the iPhone 5s, $550 entry price for the iPhone 5c, and $450 tag for the iPhone 4S.
Wolf estimates that the iPhone 5s accounted for 71 percent of March quarter sales, while the iPhone 5c took just 4 percent. That means the iPhone 4S would have taken the remaining 25 percent of sales for the three-month span.
While Apple didn't break down sales of individual models, the company did reveal that the iPhone 4S was a strong performer in the quarter, and served an important role in bringing new users into the ecosystem. Specifically, Apple revealed that 85 percent of iPhone 4S buyers were new to the iPhone platform.
As a result, Wolf believes that the iPhone 4S alone brought in about 10 million new iPhone customers last quarter. Given Apple's extraordinary ability to retain customers, the analyst said these figures challenge the notion that the company must introduce a more affordable iPhone to reach emerging markets such as China, India and Brazil.
"On innumerable occasions in the past, Tim Cook, Apple's CEO, has repeated the mantra that Apple would not stray from its strategy of building the aspirational brand in the smartphone market," Wolf wrote. "If Apple can have its cake and eat it too, Apple and the iPhone could enjoy a prosperous future."
Strong sales of the iPhone 4S helped Apple to exceed expectations in the March quarter, growing sales by 17 percent to 43.7 million total units.
The iPhone 4S has proven so popular that Apple has opted to keep the model around, even as it has launched in some markets a new, lower-priced 8-gigabyte model of the larger-screened and more powerful iPhone 5c.
The iPhone 4S first launched in October of 2011, and its defining feature was the debut of Siri, Apple's voice-driven personal assistant. It featured the same design and 3.5-inch display as its predecessor, the iPhone 4, but boasted faster internal components and an improved camera.
Apple keeps previous-generation iPhone models as part of its lineup after it debuts new models in order to hit lower price points and appeal to different segments of the market. While the iPhone 4S sells for $450 U.S. unsubsidized, some carriers offer the handset for free with a new two-year service contract.
On Topic: Needham
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