Changes in iPhone 12 that brought amazing financial results-Read Apple financial results (1)

Apple Announces First Quarter 2021 Financial Results. In the midst of the corona wreck, the strong performance of the iPhone 12 series was a tailwind, and the results exceeded analyst expectations.

Why is it forecast to hit a record high?

The iPhone continues to be the mainstay of Apple's overall sales, with sales of $65.597 billion (¥6.884 trillion) in the first quarter of 2021. It was sold. There was very strong demand, up 17.2% year-on-year. It's unusual for the iPhone to record such an increase in quarterly results, but the reason was the timing of the sale.

The iPhone 12 began selling the 6.1-inch iPhone 12 and iPhone 12 Pro in October, one month later than usual, and the second iPhone 12 mini and iPhone 12 Pro Max appeared in November. In the past, there were years when the iPhone lineup was divided into two, 2017 when the iPhone 8 series and iPhone X were released, and 2018 when the iPhone XS and iPhone XR were released.

One of the things that made 2020 different from usual was that the first release wasn't held in September. Apple closes at the end of September, which is set to close the fourth quarter and fiscal year of each year. The new iPhone model, which usually goes on sale in late September, should have included initial sales in the fourth quarter of 2020 at the time of release.

However, the iPhone 12 was not released during the 2020 fiscal year, and it was released in October. As a result, the results for the first quarter of 2021 include all of the peak sales timings, from the initial speed of the iPhone 12 launch to sales during the holiday season. Therefore, unlike other categories, the iPhone had a schedule that maximized sales.

"Super Cycle"

Since the first model of the iPhone, a sales method that discounts $ 450 for 2 years, the so-called "two-year limit" is practiced in the United States, and replacement is done once every two years. created a cycle. However, even in the United States, the rise of T-Mobile, which claims to be SIM lock-free, the enhancement of the trade-in system for the main unit, and the Apple Store's "iPhone Upgrade Program" that allows you to switch devices every year. Patterns have changed, too.

When the two-year restriction was loosened, the performance of the iPhone itself progressed, and the trade-in price of the iPhone was less likely to be damaged, so the replacement cycle was getting longer to 2.5 or 3 years. It coincides with the time when the Chinese market was screaming for the “lack of attractiveness of the iPhone”, and the number of sales was facing a very large decline.

When Apple launched the iPhone 12, it prepared a very compact 5.4-inch iPhone 12 mini. As you can see from the fact that there was an intention to turn the users of the old 4.7-inch iPhone to the latest model iPhone, it is necessary to turn the users who have greatly expanded with the iPhone 6 to the latest iPhone once again. It can be seen that it was a strategic model for

Therefore, Apple prepared the following "changes" for the iPhone 12 series.

In this way, the iPhone 12 series produced "freshness" and "newness" for the first time in a long time, stimulating replacement demand. Combined with the delay in the release timing, it can be said that such an iPhone strategy was realized as intended, or it was such a production. It can be said that one of the highlights of Apple's financial results this time is that it was able to create a "super cycle", which is a mountain of sales, while the two-year replacement cycle has become unclear.

iPhone installed base hits 1 billion

Apple to release 'installed base' figure, which measures how many devices are running, to drive growth in services sector Became. The installed base of iPhone in the first quarter of 2021 finally exceeded 1 billion units.

I will touch on the numbers in the service sector in detail, but the number of “subscription” users in the service sector has reached 620 million, achieving the goal of exceeding 600 million by the end of 2020 ahead of schedule.

It seems that demand for the iPhone continues to be strong, and the inventory level has shrunk compared to a year ago. This can also be said to be the result of users responding to the Super Cycle one by one.

On the other hand, Apple made a worrisome point on its earnings conference call. It's about sales incentives. When asked about discounts during the Q&A session, he said that it would always help sales because it would benefit customers, carriers, and Apple.

In the Japanese market, the government has aimed to maintain a competitive state by promoting switching, and large discounts on handset sales accompanying new subscriptions by mobile phone companies have become restricted. If Apple is dissatisfied with the Japanese iPhone sales environment, it may launch its own campaign measures through Apple Stores, authorized distributors, and online stores. (Continue)

Author: Taro Matsumura

Born in 1980, journalist and author. He completed his master's degree at the Keio University Graduate School of Media and Governance. Keio University SFC Research Institute senior staff (visit), Castalia Co., Ltd. Director and Research Manager, Business Breakthrough University Lecturer. Recent publications include "LinkedIn Start Book" (published by Nikkei BP), "Smartphone New Era" (published by NTT Publishing), and "Introduction to Social Learning" (published by Nikkei BP). The Twitter account is "@taromatsumura".