Apple has started introducing trade-in offers that are particularly favorable to students. ZDNet reports:

Students who trade-in their old smartphones while upgrading to an iPhone will get 7,777 rupees (US$144). Non-students will be paid 7,000 rupees (US$130).

That’s in addition to an incentive for customers who use an American Express credit card to buy a new iPhone on a payment plan. Those customers will get 10 percent of their purchase back. Apple doesn’t have its own retail stores in India, but sells through a network of local, authorized retailers, many of whom only sell Apple products.

It’s a bit unusual for Apple to wheel and deal. But the iPhone maker has been tweaking its pricing strategy and incentive offerings in markets where smartphone ownership has only recently begun to take hold. Earlier this year, Apple introduced low and no-interest payment plans for iPhone buyers in India; similar to what it is offering in China. India is a country bearing huge potential — it is an example of what CEO Tim Cook means when he notes the potential of billions of people who have yet to own a smartphone. And as Om noted recently, there are 900 million mobile connections, and so far there are just 2.5 million iPhones in use.

As the iPhone matures especially in established markets, Apple is turning to fast-growing regions whose people are just now joining the smartphone revolution. It knows it can’t sell $600 smartphones to everyone. And so little by little we’re seeing Apple customize its approach to different markets, including selling older model iPhones through carriers, allowing brand-conscious young people to pay for the cachet of the iPhone brand in installments, or reaching customers through deals with local institutions.

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It’s almost gospel in the mobile tech media and among mobile enthusiasts that Apple reports the actual number of iPads, iPhones (and Macs and iPods) it sells directly to consumers during each quarter in its earnings reports. Those numbers are often used disparagingly against other mobile companies when third-party market research firms like IDC report shipment estimates. Still, it’s difficult to get a totally accurate picture of the market; we’ve struggled with it here along with everyone else.

The most common interpretation is that Apple is being open about its shipment totals while its competitors are too shy or scared to share their actual sales numbers. The latter is partly true: Samsung and Amazon, for example, two of the most prominent Android device vendors, famously refuse to share either shipment or sales totals in their quarterly results. There are no legal requirements that companies do so. But that secrecy can be used to imply that Samsung or Microsoft or ZTE or whomever are “channel stuffing,” which is retail lingo for shipping a bunch of products to a distributor even if a business can’t or won’t sell them, just to make it look like there’s demand for its product.

But in this case, it’s not quite that simple.

Apple’s “sold” numbers are really its shipment numbers, according to several prominent financial analysts who obsessively follow every word and number that emerges from Cupertino. Horace Dediu, who writes the Asymco blog, told me that “Apple’s reports show shipments not sales.” He added, “All vendors as far as I know report shipment data since that is what they can record.” He has written about the nuances of what being “sold” actually means as well.

When is a sale a sale?

An Apple store in China.

An Apple spokesman pointed me to the company’s earnings statements. Here’s what it says about how it recognizes revenue from the sale of a product:

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit.

Apple is certainly different from companies like Samsung: it has a pretty enviable outlet through which to hawk its own products. There are a little over 400 Apple Stores worldwide and they, along with Apple’s own website, do a lot of the heavy lifting when it comes to getting Apple products in the hands of customers. And products sold through Apple’s retail channels are indeed products sold directly to customers.

But Apple doesn’t only sell direct: it has retail partners too. We’re talking about big companies like Best Buy, Walmart, Target, to name just a few, and mobile carriers worldwide. Note that in Apple’s most recent earnings release, it reported $5.2 billion in net sales through its retail channel, but about $38 billion in net sales through all of its geographic regions, which represent the location of customers when they purchased products.

When Apple says it sold 37.5 million iPhones and 19.5 million iPads, as it did in its second fiscal quarter press release, this is often interpreted as Apple declaring that 37.5 million iPhones and 19.5 million iPads have been purchased and are currently in purses, pockets, backpacks and briefcases somewhere. But Apple, as several financial analysts pointed out, reports something called “channel inventory too,” which it announces during those same earnings calls.

“Their reported numbers are ‘sell in,’” Toni Sacconaghi, research analyst who follows Apple for Bernstein & Co., said. That number includes product sales to retail partners. “They typically state during their earnings call how much channel inventory changed in the quarter, allowing one to compute to sell out units for both iPhone and iPad.”

The “channel” is its collection of retail partners, which have grown steadily over the years to include retail powerhouses like Walmart and Best Buy. Apple knows how many iPhones and iPads it sent to AT&T or to Best Buy — during the most recent earnings call, CFO Peter Oppenheimer noted the company had “11.6 million iPhones in channel inventory, a sequential increase of about 1 million iPhones” during the quarter. Apple also said it had about “four to six weeks of channel inventory.” That means it takes about four to six weeks for its inventory going to retailers to sell out.

Making it count

But Apple has already marked those 11.6 million iPhones as “sold,” since the company has transfered the product to its retail partners, in this case the “customer” as outlined in the revenue recognition criteria above. Therefore, to understand the bigger picture of how Apple is doing versus its competition, it’s best to count those 37.5 million iPhones as “shipped:” Apple doesn’t technically know if all 11.6 million iPhones sold to retail partners have actually been sold to end users, and for the purposes of recording a sale, it doesn’t care.

Obviously Apple doesn’t want iPhones or iPads piling up on store shelves, and there is certainly no reason to believe that is actually happening. It’s a good indication to Apple whether those products sold based on how often the retailer partner reorders products. So while demand for Apple products remains pretty high, automatically assuming that Apple sold all 37.5 million iPhones to actual people during that three-month period is wrong.

It seems like a small thing, but it is important to keep in mind when evaluating the mobile market, especially as it matures and multiple sales channels are employed. In order to present the clearest possible picture of how demand for Apple’s products stands in relation to its competitors, we will be referring to Apple’s announced numbers as “shipped” from now on.

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If you get motion sickness easily, I’d be cautious watching the video: It’s taken with all three phones at night with some parts on a moving roller coaster called The Hurricane.

After watching the video, I can’t see anyone disputing the Lumia 928 as a clear winner. It handles the low-light extremely well and uses optical image stabilization to smooth out the bumps and turns while riding the coaster. And it’s smart of Nokia to focus — no pun intended — on the features and expertise it brings to smartphones. Hopefully, this footage is from an actual Lumia 928: I’d hate to see a repeat of Nokia’s camera demo faux pas from last year.

But there’s a reason why iPhone models take up the first three spots in the top five most-used cameras on Flickr: They take all-around great shots and they’re super simple to use. Will the Lumia 928 win out over its peers in low-light situations? Most assuredly, although the HTC One is quite good in the same scenario. What else will the Lumia 928 offer to sway buyers, however? That’s the missing piece of this picture.

This post was updated at 3:12pm to reflect the Galaxy S 3 was used for comparison.

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Although the branded net customer additions numbered only 3,000, it was the first time that figure was positive since the first quarter of 2009. Customers on the network only tell half of the story though: Measuring monetization of customers through ARPU, or average revenue per user, is just as important.

ARPU fell by 6.3 percent year-over-year to $54.07 for postpaid subscribers as the company says 36 percent of the customer base has switched to either a Value or Simple Choice plan. Once again, however, prepaid customers came to T-Mobile’s rescue: ARPU for this group rose 11.3 percent to $28.25.

T-Mobile sold approximately 500,000 iPhones in just under a month; Sprint, Verizon and AT&T monthly numbers were found by dividing Q1 iPhone sales by three.

In March, T-Mobile introduced the Simple Choice offerings when it decoupled service plans from the price of hardware. As the company gains new customers — or has existing ones switch to newer phones — it will have an even greater number of people on the Simple Choice plans, which range from $50 to $70 per month.

The company highlighted its $1.1 billion capital expenditures for the quarter, investing large sums in network modernization. T-Mobile began to move some services to different frequencies last year on its network in order to pave the way for LTE services. This also allows T-Mobile to carry a standard GSM iPhone, which will likely bring new customers. By the end of 2013, T-Mobile expects to cover up to 200 million people with its new LTE network.

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There are millions of people worldwide who are poised to buy their first smartphone over the next few years, CEO Tim Cook is fond of pointing out in discussions of the iPhone’s growth potential. But those people need a carrier too. And as Bloomberg notes, the number of carriers amenable to Apple’s terms for selling the iPhone is a shrinking number: there are 240 carriers that sell the iPhone today; only a handful more than when the iPhone 4S was introduced in fall 2011.

Bloomberg says there are 2.8 billion customers Apple is missing out on because of its current carrier policies.

The most often cited holdouts are China Mobile and NTT DoCoMo, two of the biggest carriers in Asia. China Mobile has technical issues, but both have also said in the past that the subsidies they’d need to provide to make the iPhone affordable for enough customers is too much.

And those concerns are in addition to the requirement that carriers buy a certain number of iPhones up front, which puts them under intense pressure to be able to subsidize and sell $600 to $800 phones. We’ve seen some carriers already having trouble with this, such as prepaid provider Leap Wireless and Telefonica Czech.

So rather than wondering if Apple can make a lower-priced iPhone that still has the consumer appeal of a high-quality device worthy of Apple’s brand name, a more pressing question is whether Apple can build an iPhone with the same cachet and price it at a way that international operators won’t find too risky.

Looking ahead to the release of the next generation of the iPhone, Apple will need to respond to this in some way. The “innovation” Apple’s recent critics say they are missing from the company may come in the form of business deals that open up bigger markets in addition to new whiz-bang hardware features.

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ComScore found Apple’s share of the smartphone market, already tops in the U.S., grew from 36.3 percent to 39 percent between December and March. In second place was Samsung, which stayed about the same during the quarter, rising a smidge from 21 percent to 21.7 percent. Meanwhile, the rest of the top five smartphone makers didn’t fare as well:

There were 136.7 million people who owned smartphones in the U.S. — 58 percent of all mobile subscribers — and Apple and Samsung’s dominance of that market continues mostly unchallenged. Together they now own 91 percent of smartphone users as HTC, Google-owned Motorola, and LG lost share, ComScore’s survey says.

On the smartphone software front, Apple’s iOS remained No. 2 behind Android, but made modest gains. iOS picked up about 2.7 perent share to reach 39 percent of all smartphones, while Android dipped a bit from 53.4 percent to 52 percent.

In other words, the U.S. smartphone story didn’t change too much in the first quarter of 2013: Android is still used by more than half of all smartphones and the iPhone is still by far the most popular smartphone in the U.S. The momentum, which was nominally in Apple’s favor last quarter, may shift a bit when we look at this survey three months from now though. Several flagship Android phones will start selling in larger quantities during that time, including the Samsung Galaxy S and the HTC One.

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From the earnings release:

“We have a number of strategies in progress to increase loyalty and attract more customers, including our announcement today that we will begin offering Apple products later this year. By further strengthening our device portfolio, we’ll give consumers another great reason to switch to U.S. Cellular, and enable our existing customers to choose from an even wider variety of iconic smartphones, and enjoy the outstanding U.S. Cellular customer experiences they deserve.”

This is not a case of Apple finally bestowing the iPhone on the carrier. It’s the opposite: Apple has made a smartphone that U.S. Cellular wanted to sell. You may remember the CEO of the carrier’s parent company, TDS, saying in late 2011 that he’d offer the iPhone when Apple made a more “cutting edge” phone — in other words, he was waiting for LTE.

LTE is a big priority for the carrier: U.S. Cellular said Friday it will bring LTE to 87 percent of its existing customers this year. But smartphones in general are where it can improve. Currently, less than half — about 43 percent — of its subscribers have a smartphone. That means there’s plenty of built-in demand for customers looking to upgrade to one for the first time.

U.S. Cellular customers may certainly go for the iPhone 5, which is Apple’s LTE phone, but the cheaper iPhone 4 and iPhone 4S have been proving especially attractive to late smartphone adopters.

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This was bound to happen eventually: Apple is facing stiffer competition than it ever has in smartphones, especially overseas with lower-priced devices that run Android. The competition is getting better at the high end as well, and is also releasing new smartphones seemingly every few months. And at the same time, Apple’s been selling the iPhone in more established markets for almost six years.

This doesn’t mean the iPhone is doomed or dead. We’ve just entered a new era of the iPhone — one where the company relies more than ever on older, cheaper devices to continue to expand the ranks of iPhone customers. On Tuesday, CEO Tim Cook gave the example of how this is working in the Greater China region, where the nearly three-year-old iPhone 4 is popular:

China has an unusually large number of potential first-time smartphone buyers and that’s not lost on us. We’ve seen a significant interest in iPhone 4 there and have recently made it even more affordable to make it even more attractive to those first-time buyers. We’re hopeful that helps iPhone sales in the future.

And, he added later, that’s not limited to China: “We’re continuing to do that in other markets. We believe the [iPhone 4] for the price point we’re offering is an incredible value for people that allows people to get into the ecosystem with a really, really phenomenal product.”

Cook didn’t reveal exactly how many iPhone 4 devices Apple sold in the China region (or anywhere for that matter), but recent data from Consumer Intelligence Research Partners shows that preference for cheaper iPhones is a broad theme among recent purchasers in the U.S. too. According to its survey data, the iPhone 4 and iPhone 4S accounted for 47 percent of all the iPhones sold between January and March. The latest model iPhone 5, while still the top seller, represented the lowest ratio of late-model iPhone to older model iPhones Apple has seen. By comparison, the iPhone 4S was still accounting for 73 percent of iPhone sales two quarters after its debut.

If interest in the brand-new iPhone is declining that quickly, barely two quarters into its life, then Apple has two choices if it wants to keep the iPhone growing. It can roll out new devices more often or try to drive volumes with cheaper models.

Since Apple is a bit of a perfectionist when it comes to details and doesn’t seem the type to pump out products that could lead to brand dilution, the most practical move seems to be the one Cook is pursuing now: relying on the status and cachet attached to the iPhone name and offer older model devices to people who can for the first time afford an Apple product.

This is not unlike the company’s iPod strategy: the original iPod in 2001 cost $399, and over the years the company expanded the lineup with more models and storage size choices and brought down the price all the way to the current $49 impulse-buy level price of the iPod nano. It famously provided a much-needed halo-effect for Apple, where first-time customers bought into the iTunes ecosystem, and then the Mac, and in later years the iPhone and possibly iPad. Apple wants the same thing from brand-new customers who pick up an iPhone 4 for free on contract or at a very low price: that those new buyers sign up for iTunes, download some apps, music and TV shows, and store their documents in iCloud — as Cook puts it in the quote above, “get into the ecosystem.”

The iPod eventually gave way to the iPhone as the growth driver for Apple. So with the iPhone maturing, the billion-dollar question is what comes next for Apple after the iPhone? That’s what’s not clear yet. Cook telegraphed new products coming “this fall” and “throughout 2014″ but of course didn’t explain whether those were mobile computing products or TVs or whatever.

In the meantime, while it may not be a completely parallel replacement for the iPhone, the iPad is just three years old and still growing; not to mention the iPad mini which is also just two quarters old. At this point, the countdown is on for when it replaces the iPhone as Apple’s most important product.

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It also found that the rest were iPhone 4 and iPhone 4S models, which sell for free with a contract or for $99 with a contract, respectively. That breakdown is slightly improved from December, when a CIRP survey shows that just half of all iPhones sold were the newest model iPhone 5.

CIRP January through March iPhone model purchases

This is a very different sales pattern than what we saw in the second quarter of the iPhone 4S’s availability. When that device was the latest model, it accounted for 73 percent of all iPhone sales in April 2012, a significantly larger share than the iPhone 5 had as of March, according to CIRP, whose data comes from a survey of 500 customers who’d recently bought an Apple device.

The iPhone 4S sold 33% of all iPhones in the survey period, while the iPhone 4 represented 14% of all iPhones. In contrast, in the similar period following the launch of the iPhone 4S, the lower-priced iPhone 4 represented 22% of sales, and the free iPhone 3GS represented 5% of sales.

As a share of iPhones sold, 33 percent is the highest share a legacy model iPhone has carried in at least the last two years, according to CIRP’s data. Apple wants to sell iPhones no matter what, but ideally it wants to sell more of the most expensive iPhones, not the severely discounted and free-on-contract devices; that way its average selling price stays high.

Something similar is taking place with iPads, CIRP found: Between January and March, the iPad 2 — which originally debuted in early 2011 — grabbed a larger share of iPad sales, up from 27 percent to 32 percent. The newest model, the iPad with Retina display, dropped from 43 percent of sales in the holiday quarter to 36 percent of sales during the January quarter. Meanwhile, the smaller and cheaper iPad mini grew slightly, from 30 percent to 32 percent of sales.

It’s not really a mystery that cheaper Apple devices, even when the devices are not the latest model, are attractive to buyers when viewed against the competition. What is a mystery (until tomorrow anyway) is how this affects Apple’s balance sheet.

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Here’s the funny thing: these are really slick mobile apps. From Yahoo. (I know, right?)

If you had shown me the new Weather app, for example, I would have said that either Apple or a small design-focused start-up developed it. The background pictures are from around the world via Flickr’s Project Weather Group and beautiful to look at. They’re also representative of the current weather in their respective cities. Every icon provides data at a glance and it’s easy to navigate quickly for more detailed information.

I haven’t taken the new Yahoo Mail client for a spin yet but it looks like a nice visual update, meant to take advantage of the larger screens of tablets. Here’s how Yahoo describes it, along with a short video demo:

“With amazing displays, vibrant colors and lifelike images, tablets have changed the way we experience books, photos, movies and more. Yet email, something we do every day, has remained pretty much the same. We’ve been boxed in.

Today, we’re excited to introduce the Yahoo! Mail Apps for iPad and Android tablets – a full-screen experience that gets rid of the noise. There are no folders, no buttons, no tabs – just you and your mail – and you can easily flip through it like a magazine. We’ve designed Yahoo! Mail to take full advantage of the tablet making reading your email faster, easier and just a little bit more fun.”

I’m generally happy with the native email clients on my iPad mini and Android tablets, so even though I’ll kick the tires of Yahoo’s new mail app, it would have to really wow me. Regardless, both of these new applications look surprisingly fresh from a company that has been generally found itself lost in the growing forest of mobility.

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