Matt Richman

Apple sold 3.704 million iPhones in 2007, 13.675 million iPhones in 2008, 25.09 million in 2009, and 47.49 million in 2010.

Horace Dediu calculated that iPhone sales double with every new model. That’s incredible in and of itself, but it’s not the whole story.

Most people measure growth using Year over Year and Quarter over Quarter metrics. Let’s look at the numbers in a non-traditional way.

In 2009 Apple sold more iPhones than they did in 2007 and 2008 combined. In 2010 they sold more than they did in 2007, 2008, and 2009 combined. In order to keep the pattern going, Apple will need to sell more than 90.229 million iPhones this year, a number I think they’ll easily beat.

Has a product so large ever grown so fast?

A little more than a week ago former Patent Lawyer Nilay Patel published his analysis of of Apple’s lawsuit against Samsung. Three statistics Apple gave in its complaint stand out:

As of March 2011, more than 108 million iPhones had been sold worldwide.

By March 2011, Apple had sold over 60 million [iPod touch] units.

By March 2011, Apple sold over 19 million iPads.

By the end of February, Apple had sold a total of 187 million iOS devices. 57.75% were iPhones, 32.09% were iPod touches, and 10.16% were iPads.

The iPhone has been on the market for less than 4 years and yet it has brought in more than $58.056 billion in revenue. (That number only includes revenue from 2009 onward, after Apple switched accounting methods to more accurately reflect iPhone sales.) In 2010 the iPhone accounted for a staggering $30.087 billion in revenue. That’s more than twice the size of Jamaica’s entire GDP. Last quarter alone it brought in $12.298 billion, accounting for 49.856% of Apple’s $24.4667 billion of revenue.

Apple sold 13.765 million iPhones in 2008, 25.09 million iPhones in 2009, and 47.49 million iPhones in 2010. iPhone sales grew 82.27% year over year in 2009, and 89.28% 2010.

Needless to say, the iPhone is a huge part of Apple’s business.

The original iPhone went on sale on June 29th, 2007. Two models were available: a 4GB iPhone that sold for $499, and an 8GB iPhone that sold for $599. Less than three months after the original iPhone went on sale, Apple discontinued the 4GB model and dropped the price of the 8GB model by a third, to $400. Apple realized one of the biggest — if not the biggest — barriers to getting an iPhone was its price, despite the fact that it included both a smartphone and an iPod. Because consumers were used to highly subsidized phones, $400 sounded like a lot, no matter what phone it was or what features it had. So when Apple introduced the iPhone 3G in 2008, they also announced a new pricing model: instead of selling the phone to consumers at a hefty price, carriers would subsidize the phone and recoup their losses by charging a higher monthly fee.They’ve been using this model ever since. 

Because the iPhone’s price fluctuated so much in 2007 — it dropped from $599 to $399 — and in 2008 — it dropped from $399 to $199 — we can’t use those numbers to help calculate 2011 iPhone sales. We can only use data from 2009 onward since that was when Apple started keeping the iPhone’s price consistent throughout the year.

So far we only have Apple’s calendar Q1 2011 iPhone sales. If we look back at history and determine how many iPhones Apple sold in Q2, Q3, and Q4 in relation to its Q1 sales of that year, we can apply that percentage to 2011’s Q1 sales and we should be able to estimate how many iPhones Apple will sell this year.

In 2009 Apple sold 25.09 million iPhones: 3.79 million in Q1, 5.2 million in Q2, 7.4 million in Q3, and 8.7 million in Q4. Apple sold 37.20% more iPhones in Q2 than it did in Q1, 89.74% more iPhones in Q3 than it did in Q1, and 129.55% more iPhones in Q4 than it did in Q1.

2010 was a similar story: Apple sold 8.75 million iPhones in Q1, 8.4 million iPhones in Q2, 14.1 million in Q3, and 16.24 million in Q4. They sold 4% less iPhones in Q2 than they did in Q1, 61.14% more in Q3 than they did in Q1, and 85.6% more in Q4 than they did in Q1.

On average, Q2 iPhone sales have been 16.6% higher than Q1 sales, Q3 iPhone sales have been 75.44% higher than Q1 sales, and Q4 iPhone sales have been 107.575% higher than Q1 sales.

If we apply those numbers to the 18.65 million iPhones Apple sold in Q1 2011, we get 21.75 million iPhones, 32.72 million iPhones, and 38.71 million iPhones in Q2, Q3, and Q4, respectively. Adding those numbers together gives us a total of 111.83 million iPhones.

Apple sold 89.959 million iPhones from its launch in 2007 until the end of 2010. It’s extremely likely they’ll sell at least 100 million this year alone. Sit back and relax, Apple shareholders — it’s only uphill from here.

Apple announced it had sold more than 160 million iOS devices on January 18th, during their Q1 2011 earnings call. Let’s assume they sold another 15 million devices from that time until March 11th, when Apple gave us some interesting numbers:

Over 200 million people have an Apple ID.

They’ve paid developers over $2 billion through the App Store.

There are more than 350,000 apps in the App Store.

All of those statistics are incredible. And using them, the 175 million iOS devices, and a little bit of math, we can draw some very interesting conclusions:

• Customers have spent a total of $2,857,142,857.10 on apps.
• Developers take in $5714.29 of revenue per app.
• iOS device owners spend $16.33 on apps for each of their devices.

The first statistic is mind-blowing. The App Store launched in the summer of 2008 alongside the debut of the iPhone 3G. It’s been running for less than three years and yet apps are now a multibillion dollar industry. 

Although the second statistic isn’t as astounding as the first, it’s still incredible, especially considering the fact that it includes free apps, not just paid ones. Revenue per app would be way higher if we only included paid apps.

But let’s forget about those two statistics for a moment. Instead let’s focus on the last one — iOS device owners spend $16.33 on apps for each of their devices — right now. $16 isn’t really a lot of money. But to future iPhone owners who have already invested in the iOS platform, it seems like it, which is what really matters.

Six months ago Horace Dediu calculated that 37.7% of all iOS devices sold are iPod touches. For arguments sake, let’s assume that number is still true today. 

If you take that number and multiply it by 175 million iOS devices, Apple has sold 65.975 million iPod touches. Let’s assume 70% of them  — 46.1825 million — are bought for kids up to 13 years old. By the time those kids are older and are ready to get their first phones, two extremely important things will have happened:

1. The price of data plans — currently the limiting factor of smartphone adoption — will have dropped dramatically.
2. Those same kids will have spent even more money on iOS apps than they already have.

And both of those factors will encourage iPhone adoption.

If a kid has already invested what feels to him like a fortune on iOS apps and he’s picking out his first smartphone, of course he’s going to get an iPhone. No one — especially a teenager — wants to carry a smartphone and an iPod touch if they don’t have to. The iPhone is a convergence device — that’s part of what makes it so incredible.

The iPod touch is one of the smartest things Apple has done in the last couple of years. Steve Jobs called it an “iPhone without the contract.” He’s certainly right, but it’s more than that. It’s most peoples’ first experience with iOS. It’s a precursor to the iPhone.

And it’s only a matter of time before they get the real thing.

Apple invited the press to an informal media event on October 23rd, 2001. Steve Jobs got up on stage and announced the first iPod. It had 5GBs of storage, retailed for $399, and went on sale November 10th.Everyone — even the most devout Apple fans — had their complaints. NPD analyst Stephen Baker said the iPod would “have trouble digging out a niche in the market.” Popular technology blog Slashdot called it “lame.” And Sony — the company that popularized the portable music player — didn’t think the iPod was a threat. No one predicted or understood the effect the iPod would have on the market. Yet five and a half years later, on April 9th, 2007, Apple announced it had sold over 100 million iPods.

Apple invited the press to an informal media event on January 9th, 2007. Steve Jobs got up on stage and announced the first iPhone. It had 4GBs of storage, retailed for $499, and went on sale June 29th. Everyone — even the most devout Apple fans — had their complaints. ABI Research said the “iPhone is not a smartphone.” A Palm spokeswoman argued the iPhone will fail because “it lacks a physical QWERTY keyboard.” And Microsoft CEO Steve Ballmer infamously laughed it off, saying, “I like our strategy. I like it a lot.” No one predicted or understood the effect the iPhone would have on the market. Yet three and a half years later, on March 2nd, 2011, Apple announced it had sold over 100 million iPhones.

Apple invited the press to an informal media event on January 27th, 2010. Steve Jobs got up on stage and announced the first iPad. It had 16GBs of storage, retailed for $499, and went on sale April 3rd. Everyone — even the most devout Apple fans — had their complaints. PCWorld called it “just a big iPod Touch.” E-Ink CEO Russ Wilcox said his company’s products would outsell the iPad because “you need two hands to hold it.” And Microsoft chairman Bill Gates unflatteringly said it’s “okay.” No one predicted or understood the effect the iPad would have on the market. Yet nine months later Apple announced it had sold nearly 15 million iPads — making it the second most successful launch in the history of consumer electronics.

It took more than five and a half years to sell 100 million iPods. It took more than three and a half years to sell 100 million iPhones. How long will it take to sell 100 million iPads?