There was a lot of confusion yesterday when Verizon’s results were discussed, with more than one commentator confusing activations and sales. For the record, what Verizon announced was that 51 percent of its activations were iPhone, not 51 percent of its phone sales.
If you doubt the importance of this distinction, I have one word for you: T-Mobile. As of 11th April, the carrier had two million iPhone activations. Its iPhone sales as of the same date? Zero: T-Mobile didn’t start selling iPhones until the following day.
The difference between the two numbers is particularly dramatic with high-end handsets like the iPhone …
A low-end handset may well be discarded when its owner upgrades. They buy the replacement: one new sale for the manufacturer, one new activation for the carrier. But iPhones typically remain useful for several generations. There are plenty of people out there still happily using an iPhone 4.
When someone upgrades to their shiny new iPhone 5s, the chances are their iPhone 5 is sold on the used market or passed on to a family member or friend. Perhaps that person passes their old iPhone on to someone else. One new sale for Apple, two or more activations for the carrier(s). Those activations Verizon cites will for sure include a great many older iPhones not sold by the carrier.
This kind of confusion is not unusual. When it comes to smartphone numbers, we frequently see sales numbers of one handset compared to shipment numbers for another, as if they were the same thing.
The same applies to all those supply-chain rumors, telling us that the iPhone or iPad sales are rising or falling based on component production numbers at a single supplier. As Tim Cook has cautioned:
I’d stress that even if a particular data point were factual, it would be impossible to interpret for our overall business. Yields can vary. Supplier performance can vary. There’s an inordinately long list of things that would make any single data point not a great proxy for what’s going on.
Anything other than an official statement from Apple relies on proxies: other stats that provide clues on sales numbers rather than evidence for them. That’s why we’ve seen wildly-varying estimates of the relative sales of the iPhone 5s and 5c.
Look at mobile and web app connections, and you get three-to-one in favor of the 5s. Look at claimed production numbers, and you get 50:50. Ask consumers what they own and you get two-to-one.
Of course, when a company reveals as little information as Apple, we can’t escape from the guesstimates. It’s just important to understand what the numbers really are, and what they do and don’t really mean. That’s the context we aim to provide here at 9to5.
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