The hidden truth behind the iPhone 4s Sales

The last couple of days, everyone I know of and anything I read on the internet is about “how great the iPhone 4s sales are”. People are taking a number of “4 million iPhones sold” and make it look like this is a huge number compared to the sales of the iPhone 4, implying some sort of improvement on apple’s side, getting peopple even more interested in it’s phone. However, people forget that it is so easy to lie or to fool with statistics and that, in economics (and any science for that matter) you can only compare numbers “everything else being equal” and that’s just what I’m going to do here.

There are multiple factors we should take into account to really compare the launch sales of the iPhone 4 and those of the iPhone 4s :

  1. The growth of the smartphone market
    The smartphone market grew by between 50% and 70% from mid 2010 to mid 2011. For the two launches to be compared, this has to be taken into account (there are more people interested in smartphones in general, making it a lot easier to sell them). This number becomes even more impressive if you combine it with point 2 -> it didn’t take a year, but 16 months to get the new iPhone 4s, so the smartphone market grew between 66.5% and 93.1% in that time.
  2. The gap between the iPhone 4 and the iPhone 4s
    When the iPhone 4 came out, it was 1 year after the iPhone 3s. The iPhone 4s, however, came out 16 months after the iPhone 4. This means that 33% more people came to a natural end of their 2 year contract. These are people that naturally waited for the new iPhone to come out before signing a new contract.
  3. The countries in which the phone was available on launch
    The iPhone 4 was only available in Britain, France, Germany, Japan and the U.S. upon launch. This is a total population of 641M people. The iPhone 4s, however, was available in the same countries plus Canada and Australia, adding another 56M people (8.7% more)

Now that we have all of those factors that have nothing to do with the iPhone 4s itself, we can go ahead to really compare it’s sales with the iPhone 4.

  • Sales of the iPhone 4 on launch (first weekend) : 1.7M
  • Taking into account factor 1 (smartphone growth) the sales, if they were to be kept equally popular, should be : 1.7 * 1.665 (I am playing it safe here, going with the smallest estimate) = 2.83M
  • Taking into account factor 2, the additional people with a new contract to sign : 2.83M * 1.33 = 3.76M
  • Taking into account factor 3, the additional people available due to the fact the phone got launched in more countries : 3.76M * 1.087 = 4.09M

This means that, if you factor in all the external developments of the smartphone market development, the iPhone 4s sales were actually less then what they would be if the iPhone 4s was as big a success as it’s predecessor. By taking into account all of these factors, we can easily define that the iPhone 4s was definitely less of a success then the iPhone 4 on it’s launch and that is without waiting to see what the sales numbers are in the first months. If the pre-orders are this much, but people are not buying them directly in the stores anymore, the total sales might be even worse…

I really don’t get why nobody has taken the time to actually analyse these numbers and blindly take the fact that “the iPhone 4s was such a success, it sold more then doubled the iPhone 4 sales”… Yes, it’s mathematically true, but economically, the picture is a very different one…

Sources :

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