I noted that Tomi Ahonen has not yet made a review of iPhone 6 (or 6 Plus). Considering how keen Tomi has always been to tell what a disappointment the iPhone is going to be, I assume he will do iPhone review before weekend launch. But just to be up to the speed I decided to make a post about Tomi’s past capability on forecasting the Apple/iPhone sales. It’s good to have this handy for someone who repeatedly insists he is mosta ccurate forecaster in mobile (for last 10 years). Here goes:

Original iPhone

Tomi has always been very clear that “original iPhone” was not a real smartphone (whereas iPhone 3G was) and that original iPhone severely lacked in features. This starts from his original first impression:

It seems from the short clip on CNBC a moment ago, that this Apple phone does not have a keypad? I am not sure if I saw correctly. If the iPhone does not have a keypad, it may be successful in America, but it will definitely fail in the rest of the world. You cannot send text messages effectively – fast, and secretly – if you have to point at a screen to type. But please, I have not yet seen actual specs on the phone, so this is mere speculation. I do hope that Apple knows the ONLY addictive service on mobile is SMS text messaging. Music is not addictive. If the iPhone is poor at texting, it will fail.” [1]

After that Tomi wrote several pieces on the iPhone. It is very mixed bag; sometimes iPhone is a hit device, sometimes only silly Americans would buy it. But in summer 2007 (just before iPhone launched) Tomi wrote his “forecast” on the upcoming sales of iPhone. His view was that there will be 10 million shipped iPhones until end of 2008. (Yes, he has later remembered to say that the 10 million number came from Steve Jobs and that his forecast was more about could Steve Jobs accurately forecast the first year sales.)
Tomi’s iPhone shipments forecast in brief:

  • In North America Apple would ship 2.6 Million iPhones, all on AT&T. “A tall order” and Apple will have to invest a lot, and so will AT&T.
  • Tomi forecasts 6.3 million iPhones shipped in Europe.
  • Asian market needs to ship 1.2 million iPhones.
  • For Europe Apple needs more advanced 3G European smartphone. It will be at least 100 dollars more expensive than the 2G iPhone – plus heavier and more bulky.
  • For Asian market the new iPhone 3G model is absolutely necessary, with 5 megapixel camera, DVD-quality videorecording, removable memory chip, in-built flash, removable battery, etc. (Also GPS and built-in digital TV tuner gets to be mentioned.)
  • Tomi expects that iPhone return rates will be so bad they hurt Apple, in particular European return rates will be at least twice as bad as in U.S.
  • His bet is there will be a keypad iPhone, but not until late in 2008 when this has been proven to Apple to be the biggest problem. [2]

Before we go into real sales, let’s see up to end of year 2008 (iPhone 3G) and check is Apple followed Tomi’s guidance

  • European sales started in November 2007 but iPhone 3G wasn’t released until July 2008.
  • There never was Asian market iPhone with the requirements Tomi set as needed ones.
  • No keypad.
  • No MicroSD card.
  • No LED flash.
  • No user replaceable battery.
  • No… Well, you get the picture.

Notable is that Tomi did not actually believe in Steve Jobs number either. He abandoned the case where Apple would ship those 10 million phones during calendar year 2008 (January-December) and instead made his forecast for entire time span from summer 2007 to end of calendar year 2008.
By the end of December 2008 – the scope of Tomi’s 10 million shipped iPhones forecast – Apple had shipped 17.2 million iPhones – 72% more than Tomi forecasted.
…all this without doing the changes Tomi listed as mandatory, save for 3G.

Year 2009

Late 2008 Tomi had excellent review on iPhone 3G. I would happily count it as his sales forecast for Apple as it can be summed up in one quote:

I am afraid that Apple has now forever abandoned the top end of the market to Nokia, Samsung and SonyEricsson. Apple moved downstream. And that battle is far more tough than the top-end market.

[3]

Hilarious. That’s just about as much off as one can be. The market where Apple stole market share from others was EXACTLY the top end of the market. Tomi did not give year 2009 forecast, so we cannot tell if he is most accurate forecaster for that year. We need to go for next year for that.

Year 2010

Now we start to get market shares from Tomi. He gives forecast for year 2010 and that calls:

  • Apple has to release more than one phone model per year else its market share growth will stagnate. (Tomi’s statement was that year 2010 will drive that lesson home to Apple HQ “loud and clear”.)
  • If Apple releases QWERTY keyboard iPhone, they could grow their market share.
  • In general Apple needs LED flash, preferable 8 megapixel camera, removable battery and SD-card slot.
  • Apple can “hold” their market share if next iPhone is a “must-have” phone but overall Tomi does not see chance for strong growth.
  • In addition to holding its market share Apple may reach 15-18 percent market share on fourth quarter of 2010. [4]

Tomi’s forecast was totally depending on iPhone 4 being a hit. As we know Apple did not launch QWERTY iPhone. There were LED flash and 5 megapixel camera in iPhone 4 but no memory card slot, no user replaceable battery. When iPhone 4 was announced, Tomi iRonically called iPhone 3GS “clearly the ‘best smartphone’ last year” [5] while he did not review it as such when it was launched. The iPhone 4 was reviewed by Tomi like this:

For a short while in June-July-August of 2010, the iPhone 4 will hold its own against rival Androids and other smartphones, but this is nowhere near the great leap forward to keep the iPhone 4 the most desirable phone for the next 12 months.” [5]

To validate Tomi’s forecast we have to check whether Tomi feels there is a chance for Apple to grow with this iPhone:

Meanwhile the iPhone market share will continue to be flat for the year, falling towards the end of the year, and Apple’s market share growth will indeed have stalled (as I predicted). Apple cannot get out of the market share trap until it spreads its design across more than one new model per year. Expect Apple to make announcements in that direction during the next 12 months.” [5]

Now with all that, what did Apple do? Their Full year market share for 2010 was 16%. Their Q4 market share was 16% too. No falling towards end of year, and Apple in fact reached Tomi’s forecast that could only be reached with a “must-have” iPhone…
…while launching only one model that was such a dissappointment of an iPhone and lagging behind the competition.

Year 2011

For year 2011 Tomi made forecast AFTER Nokia had announced the death of MeeGo and Symbian. So he knew there would be some Nokia market to grab for Apple. In Tomi’s view:

  • Apple needs this year ‘Nano’ cheap variant of the iPhone.
  • Screen size of next “better” iPhone needs to grow to 4 inches.
  • It is also time to release a slider-QWERTY based iPhone model.
  • If Apple does both QWERTY and nano model, they will grow up to 24%.
  • If Apple does not launch either of the nano and QWERTY variant, they’ll market share will drop one point, down to 15%. [6]

The reality then? Apple did not launch iPhone nano. No MicroSD card slot, no user replaceable battery. No QWERTY variant, Screen size of iPhone 4S was still at 3.5 inches. Apple failed on every guideline that Tomi gave…
…and ended the year with 24% market share. (Full year market share was 19%, up 3 points instead of being down by one.)

Yes, you should be seeing a pattern in here. Tomi tells what Apple HAS to do in order to reach his forecasts…
…and Apple reaches them while doing none of those.

Year 2012

After Apple met all of Tomi’s forecasts without taking any of Tomi’s advice, Tomi could be a bit more optimistic about Apple, right?
Well, he is. This is probably first time Tomi gives the possibility for Apple to grow market share by actually not taking any of his advices. Once again Tomi’s forecast in brief:

  • Apple needs to release by end of June two hot new phones: the iPhone 5 with high tech cool specs like a bigger screen, NFC and WiMax to start with; and the low-cost iPhone Nano.
  • Both models need to be visibly different from the current iPhone 4 and 4S. [7]
  • iPhone cannot grow its market share in meaningful ways anymore.
  • If Apple only release one new superphone priced iPhone this year, they may grow a percent or two, far more likely the iPhone will hit a market share ceiling due to being overpriced. [8]

And in the end, Apple manages to grow one point of percentage (20% for year 2012) while not splitting the product line, not adding QWERTY keyboard, not adding MicroSD, not adding user replaceable battery and not making the phone visibly different from iPhone 4S either (save that iPhone 5 had different dimensions due to different display aspect ratio).
Yes, this is yet another year where Apple grows market share while ignoring all of Tomi’s instructions.

Year 2013

Over five years after the launch of original iPhone Tomi can finally say he has been right all this time: iPhone finally loses market share! After having 20% market share in the previous year Tomi can see market share drop coming and with his full confidence Tomi gives us the percentage (and I quote):

Apple’s iOS in smartphones will be identical to the Apple iPhone share in the above. I don’t have more to add, it will be in the 15% to 30% range

[9]

Let’s get this straight:
If Apple loses 25% of its market share, iPhone market share goes down to 15% and Tomi is most accurate forecaster.
If Apple gains 50% MORE market share, iPhone market share jumps up to 30% and Tomi is most accurate forecaster.

What explains this carpet-bombed forecast? This is how it goes:

  • If Apple continues with only one iPhone model, they will end up to a range of 15% – 20%.
  • If Apple releases a parallel (significantly cheaper with near half price) model, then by Q4 they could have combined iPhone sales in the 25% to 30% range. [9]

During all these years Apple has usually been able to hit between Tomi’s markers but for all the wrong reasons. This year makes no exception:
Apple DID split its product line. Sure, the iPhone 5C was not “half price iPhone nano” Tomi asks for. (How could it be? It’s iPhone 5 in plastic wrappings.) but while not being half price, iPhone 5C was no dog; it was world’s fifth best selling phone as late as in July 2014! [10]
So Apple did launch two hit phones. Tomi keeps insisting this is the product line split he has forecasted to happen since year 2007 or so. Apple should end the year at 25% market share at least. Or at least keep it in 20%. Right?

Apple ends year at 18% market share. Their full year market share is 16%. And this happens with the product line split Tomi says is what he has been telling all this time will happen. (I say it is not the product line split Tomi has been asking for.)

Year 2014

Okay, we don’t have year 2014 results yet. But we do have Tomi’s forecast for this year and Tomi is about to do his iPhone 6 review. When he does, please remember all we have seen so far and Tomi’s own text from when he was making year 2014 forecast:

On the handset side some on the West Coast still think its a two-way race between Apple and Samsung. Readers of this blog know that is utter hogwash. Apple only has a niche – a large and highly profitable niche yes, but Samsung is the real thing, selling two smartphones for every one iPhone (plus Samsung sells a third lower-cost dumbphone in the same period).

its role will be in the 10%-15% market share mid term, maybe more like 6%-8% in the long term,

Its likely that Apple breaks the iPhone release cycle from 12 months into 6 months, releasing a new flagship in the Spring and new cheaper models in the Autumn, likely starting this year and they will probably spread the price difference between flagship model (current 5C) and discount models (5S).

Nailed it.

<EDIT>
We have Tomi’s iPhone 6 review and the results of it available and it’s hilarious.
</EDIT>

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2007/01/enter_the_iphon.html

[2] http://communities-dominate.blogs.com/brands/2007/06/crunching-numbe.html

[3] http://communities_dominate.blogs.com/brands/2008/06/apple-iphone-3g.html

[4] http://communities-dominate.blogs.com/brands/2010/01/a-bloodbath-for-2010-the-smartphone-market-preview.html

[5] http://communities-dominate.blogs.com/brands/2010/06/the-most-eagerly-awaited-smartphone-the-iphone-4-apple-increasingly-preaching-to-the-choir.html

[6] http://communities-dominate.blogs.com/brands/2011/03/preview-bloodbath-2-electric-boogaloo-the-smartphone-wars-in-year-2011-will-be-bloodier-still.html

[7] http://communities-dominate.blogs.com/brands/2011/10/analysis-of-smartphone-wars-part-3-this-week-the-iphone-4s.html

[8] http://communities-dominate.blogs.com/brands/2012/03/previewing-year-2012-in-smartphone-bloodbath-year-3-is-the-digital-jamboree.html

[9] http://communities-dominate.blogs.com/brands/2013/03/preview-of-the-smartphone-wars-bloodbath-year-4-smartphones-galore-this-year-will-be-pretty-stable-w.html

[10] http://9to5mac.com/2014/07/15/iphone-5s-remains-worlds-best-selling-phone-iphone-5c-takes-number-5-slot/

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