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So Much for Falling iPhone Sales

Ever since the iPhone 5 was released to record sales in September 2012, media and financial pundits have declared it a failure. When they estimated that Apple could sell 10 million units the first weekend, and Apple sold a record five million, that was a miss. Whose miss? Well, the silly estimates from some analysts who seem to get figures from places we don’t mention in public. In fact, Apple executives claimed they simply ran out of stock.

Every so often, there would be more bad news, that Apple had cut back on orders for iPhone displays, or that demand had “softened.” Through all this period, iPhone sales continued to show year-over-year increases, yet it was still perceived as a failure. When Samsung sold ten million copies of the Galaxy S4 smartphone in the first four weeks, or at least shipped that many, that was declared  a huge success for the company and for any new product, forgetting Apple did better with the iPhone 5.

But this is typical for the double standard that applies to Apple.

Indeed, the iPhone pretty much saved Apple when it came to perceptions about the company’s performance for the June quarter. Compared to 26 million iPhones sold in the comparable quarter last year, Apple moved 31.2 million. That was sufficient to overcome the negative feelings of lower iPad and Mac sales. Apple’s stock price, which seemed to be either falling or  holding steady, rose rather sharply after the financials came out.

But how could those analysts have been so wrong? After all, they do claim to be watching the supply chain and sometimes retail sales, so there was either a serious miscommunication somewhere along the line. Or they are simply making things up. I wouldn’t presume to guess which, although I think the latter may be closer to the truth, perhaps just to talk the stock down.

However, it’s not as if the Apple naysayers are suddenly going to admit they were dead wrong all along, and that the claims that Apple was in trouble were never eally true. It was just smoke and mirrors, and if people lost lots of money when the stock price fell, well that’s too bad. People who bet against Apple evidently made out extremely well as a result.

This isn’t to say that Apple did great during the last quarter. While it is to be expected Mac sales would be flat or declining somewhat because of overall industry trends, what about the iPad? Apple attributes most of the slower sales to inventory drawdowns, though it’s not at all clear why this happened. The best you get is that Apple wants to keep the supply chain lean and mean, which is a good thing. But did they make it so lean that people couldn’t buy iPads as easily as before? Or did demand really fall?

To be fair, the last iPad refresh happened last October, and aging product lines don’t sell as well, although the iPhone’s ongoing success seemed to argue against that theory. I suppose that the iPad’s conquests in the business and educational market may result in a turnaround next quarter. Consumers will no doubt line up to buy them when the new models arrive, which one presumes will happen this fall.

The ongoing success of the Mac is a larger question. Although Apple reported strong demand for the refreshed MacBook Air, that happened late in the quarter. Other Macs are still awaiting expected upgrades to Intel’s Haswell processor, and there’s the Mac Pro. But it’s not as if the Mac Pro, which uses an Intel Xeon processor, will necessarily sell in the hundreds of thousands when it arrives, even if there’s a lot of pent-up demand. A large portion of former Mac Pro users can do quite nicely with a top-of-the-line iMac at a far lower cost.

As to the PC industry as a whole, sure it’s clear that the failure of Windows 8 has hurt sales. But PC upgrade cycles — both Mac and Windows — are much farther apart now. Consumers and businesses keep computers longer these days. You don’t have the huge performance boosts in new hardware year-over-year as you used to. Indeed, comparing this year’s model with last year’s, and an older chipset, often yields only a modest change that may only be apparent when you run some benchmarks.

Intel’s Haswell chip may make a huge difference, at least when it comes to note-books, where every second of battery life is critical. So it’s possible Apple sales will grow somewhat when the MacBook Pros get their updates, and that may happen within the next few weeks. The arrival of OS X Mavericks, which, in large part, appears to run on the same Macs as Mountain Lion, may also spark an upgrade cycle. But it also promises to make your current Mac run faster, with better battery life. We’ll see when the final version arrives.

Meantime, when it comes to the iPhone, did the comments from Tim Cook about the ongoing success of the lower cost models signal Apple’s plans to build a cheaper iPhone real soon now? Inquiring minds want to know.