Apple’s Record iPhone Sales (2013 Version) (Update)

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Update: According to the Verge, there are some questions about that nine million iPhones sold number. Regardless, it’s a tremendous performance, and I think everything I wrote below still applies.

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Every year since the introduction of the iPhone, Apple has sold a new version of the incredibly popular device and announced record launch day (or launch weekend) sales. At least, that’s the way it seems—maybe one year’s sales or another didn’t exceed the previous year’s, but certainly Apple has achieved initial sales levels that no other technology company has approached.

Also pretty much like clockwork, the mainstream and technology media reports breathlessly on these record sales as if they’re something new, with accompanying photos, video, and stories about the requisite lines of anxious customers waiting to buy the new iPhone at Apple stores around the world. This exceptional media coverage is likely a combination of Apple’s world-class public relations department, which stokes the flames for months leading up to each release, and the media’s general tendency towards sensationalism.

It’s a phenomenon, really, and Apple deserves credit for creating a business model that sustains these powerful sales surges year in and year out, and for harnessing the power of the media in helping them make the model successful. This business model is both responsible for and greatly benefits from Apple enjoying a very loyal base of fans that grows every year and numbers in the millions of not tens of millions. At its core, I believe, this base is made up of people who have been Apple fans since Apple was the underdog in the Windows vs. Mac OS days, and this base of fans will buy whatever Apple puts out in an effort to help Apple be successful.

The model itself is simple: Apple releases one (now two) iPhones annually on a “tick-tock” schedule—borrowing Intel’s processor nomenclature—where they have a major release, like the iPhone 5, then a “minor” refresh, like the iPhone 5S. Because phones are typically purchased on two-year contracts, this means that a person who buys, say, an iPhone 4 is ready to upgrade to an iPhone 5 (unless they bite the bullet and upgrade early), and a person who buys an iPhone 4S is ready to buy an iPhone 5S.

In other words, Apple has created a built-in base of extremely motivated fans (or maybe two alternating fan bases, if you think of it from the same “tick-tock” perspective) who are chomping at the bit to upgrade each year. Many or most of these people have been waiting two years to snatch the latest and greatest piece of Apple magic, and they’re willing to wait in line to get it. Certainly, they’re not going to wait any longer than they have to, meaning that Apple can also announce record pre-orders every year—which itself feeds the hype, because if you don’t pre-order or stand in line, then you increase your chance of waiting through the inevitable inventory shortages.

The thing is, this is all carefully orchestrated by Apple, and it’s sheer genius. Other companies, such as Samsung, push out numerous different products, none of which by themselves are capable of selling nine million units in a weekend, and they announce those products many weeks or months before they’re actually available for sale, and without firm release dates. By the time they’re actually released, they’re old news.

Apple, on the other hand, says nothing throughout the year about their new products. Instead, they let the media do their talking for them. Maybe they leak a few juicy details, maybe not. I think the jury’s still out on whether the myriad tiny (and huge) leaks about upcoming products are on purpose. Regardless, the rumors around the next mysterious Apple product can’t help but feed the hype.

Most important, Apple officially announces the new products on relatively regular schedules, at highly-anticipated and -visible events, and then releases the products while they’re still hot in everyone’s minds. Apple has one of the best supply chains in the industry, if not the best, and so they’re able to ensure that they have millions of units available at launch. After all, they don’t announce or launch until they have the inventory on hand—this isn’t accidental.

And so, of course Apple has sold more iPhones at launch this year than they did last year. The pent-up demand is greater, because the installed base that’s ready for upgrading is larger. And it gets bigger every year, by definition and by design, because more people are buying smartphones. Apple’s share of the overall market isn’t as large as it used to be, but it doesn’t have to be for Apple to experience year-over-year growth because the smartphone market itself continues to grow.

Some of the demand is from people defecting from other platforms, I’m sure. But I would bet my socks that the vast majority of those nine million people who bought one of the new iPhones over the weekend had been waiting for two years to buy it.

My point here isn’t to knock Apple or even to minimize the significance of selling more units of a product (or, this year, two products) in a weekend than anyone else ever has. It’s rather simply to point out that these sales don’t mean that the iPhone is the best ever smartphone that’s ever been created (and market success doesn’t ever necessarily equate product superiority). Instead, it means that Apple is the absolute master at product marketing, and has created a sort of self-sustaining sales machine that should be the envy of the technology industry.

I wish that the media were a bit more tempered in their coverage, and perhaps some venues are and I just haven’t come across any less over-hyped coverage. Let’s give Apple credit for what they do best and recognize that these sales aren’t “magical” or unprecedented or meaningful in a vacuum, but rather the result of careful planning and flawless execution on Apple’s part.

And, let’s remember that next year when the iPhone 6 breaks this year’s sales records.

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