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Summary:

After selling 90 million iPhones from 2007 through 2010, an important milestone has almost certainly passed, the sale of the 100 millionth iPhone. Expect a self-congratulatory press release next month, but now is the time for the company to think about the next 100 million iPhones.

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After selling 90 million iPhones from 2007 through 2010, an important base-ten milestone has almost certainly passed, the sale of the 100 millionth iPhone. Expect a self-congratulatory press release next month, but now is the time to think about the next 100 million iPhones.

According to NPD (via Fortune), the iPhone 4, iPhone 3GS, and the iPhone 3G held the first, second, and 10th positions among mobile phones in the U.S. in 2010. Most of the rest were Android devices. According to Gartner, Android as a platform took second place worldwide among smartphones in 2010, and will almost certainly pass Symbian for first in 2011. Apple and iOS will have to settle for third in 2011, passing RIM’s BlackBerry OS. While the trend toward Android market share dominance will not be reversed, the real concern is whether Apple intends to continue to compete aggressively on hardware anyway. The signals are mixed.

After yearly releases of new iPhones, it’s now rumored that a hardware-free WWDC means no iPhone 5 until fall at the earliest. One argument for such a delay is an LTE iPhone 5, but every month, if not week, there are new Android smartphones to choose from, compared to just the iPhone 4 and the previous year’s iPhone 3GS from Apple. Can anyone imagine there being just one model of iPod? How about one iPod in one color? Nearly a year after the release of the iPhone 4, Apple is still promising (but has yet to deliver) a white iPhone 4.

Another issue related to dearth of iPhone choice, namely carrier exclusivity, still exits, continuing to negatively impact iPhone’s sales. In the U.S., the iPhone is available on Verizon and AT&T, representing approximately two-thirds of mobile subscriptions. That’s the equivalent of not selling the iPhone in all of the southeastern U.S. It’s even worse in a country like China, a major focus of Apple’s future growth. The iPhone is currently available only through China Unicom, which accounts for about 20 percent of wireless subscribers. The iPhone needs a larger presence worldwide now, and a larger-screened iPhone wouldn’t hurt, either.

Looking at the list of top-selling smartphones in the U.S., two of them also have 4-inch displays: the Droid X and the EVO 4G. According to NPD Group, consumer demand for smartphones with large displays grew to 24 percent of the market by the end of 2010, while growth in demand for smartphones with displays the size of the iPhone was flat. While rumors of the iPhone 5 having a larger screen have been inconsistent, the demand for such a device is clearly there .

Another market where there is demand is at the low-end of pricing, and the $100 Android phone (no contract required) is already here. However, the low-end market is at least recognized by Apple for its importance. From Forbes, at a meeting with analysts, COO Tim Cook asserted the company was “not ceding any market,” and that Apple didn’t want its products to be “just for the rich.” That sounds reassuring, but until Apple launches a prepaid iPhone for $200 or $300, it’s just talk.

Apple has had great success with the iPhone, but the current limited design choice, limited carrier options, and limited pricing could take away from that success.  More models, more carriers, more price points: That’s the way forward for the second 100 million (and more) iPhones.

  1. A $100 (unsubsidized) Android phone isn’t much cheaper than an iPhone when you consider the associated data plan still costs $60-$100 per month.

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    1. uh yeah it is your subsidization is about $10-$15 a month
      so a $200 iphone is really about $440-$560 a

      why the unsubsidized phone is just $100
      how is that not ‘much cheaper’

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    2. It is when you get it with Straight talk’s unlimited plan $45. Even Net10 unlimited is cheaper $50. There’s plenty of options that works out cheaper. Prepaid alone is cheaper. Already there’s plenty of unlocked iPhone running on MVNO’s – which is a pretty basic indication that the market is there already.

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  2. oh my, while the article is technically on-point be prepared to be flamed hard. I’m surprised Om would let you post something “non-Apple friendly”..

    honestly I think Apples main concern now is HP & MS. nobody is going to catch Android, race for #1 in the smartphone market is over. it’s 2nd – 4th thats going to be interesting.

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  3. This is the type of article you get from a business analyst who doesn’t understand anything about the market. This article is as idiotic as a comparison of BMW to Chevy cars. Sure, BMW could destroy it’s brand in order to compete with Chevy on volume. But that’s not even a fair idiotic comparison because you are comparing a sold product from Apple to something Google is giving away for free. Brilliant.

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    1. except that highend iPhones cost the same as highend Android phones

      except that iPads cost the same as Android tablets

      Apple can no longer use pricing as an excuse for failing marketshare.

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  4. Wow the author failed miserably. The announcement has already been made that they sold their 100 millionth iPhone, they said it during the unveiling of the iPad 2 lol

    FAIL

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  5. The iphone is about the user experience, not just design but how it’s going to work, for everyone. If the end result of all that innovation is a single product then thats fine with me. The others have diluted their product so much that its indifferent with each handset. Open yes but certainly not consistent.

    Apple’s quality control might be rooted in their ‘closed’ eco system but it certainly protects the integrity of their product. Remember, the ipod evolved but the iphone hit the ground running. Releasing an iphone ‘lite’ would be dumbing it down.

    Look at the figures but bear in mind that it’s a single unit against a catalogue of competition and yet it still stands it’s ground. Considering Apple’s success, they could own the industry by flooding it with a range of models. Clearly they intend to gain market share via QUALITY not quantity, are we really complaining about that?

    Look, we’re talking about making the iphone more accessible and that means more affordable, a lesser model is not the way to go. Apple needs to cut costs and reduce the price and the way Mr Jobs is strategically buying up companies that may not be far off.

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  6. Two more things about why apple is so successful at the moment. One is there are tons of people mainly kids walking around with ipod touches. They know how to use it. So if you were a kid who turned 18 or 19 and either through parents or own money could afford a smartphone and had been using an ipod touch for a couple of years what phone are you going to go get? You probably would get a iphone because you know how to use it and you have all your music setup that way. It is the craddle to grave mentality of marketing. As your customer base gets older have another product of yours to buy.

    Second is the first to market. It is real simple right now. I took an informal survey of people around me and asked them if they knew about the ipad. Basically everyone did. Then I asked them to name another tablet. Almost no one could name it by brand and model. That is huge.

    This site is mainly for people worrying about specs, connections and whatnot. The majority of people who will use a tablet pc will surf, email and play games and watch videos. They won’t even get into all the detail that many on this site worry about. Plus if you have a touch or iphone picking up an ipad and using it is simple. That is the key to technology is having something people can and will use. Sure it can be dumbed down for people around here, but that is not the majority.

    I got my wife an ipad in August. Here is why she loves it. Battery life. Move it around the house with ease. Simple user interface. It meets her needs for surfing and email. Plus it is not bulky like a laptop.

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