iPhone “By the Numbers”: Apple’s Sweeping Tide Across the Globe

The anticipated d-day (delivery day) for iPhone 2.0 is rapidly approaching. With it, the buzz machines are in overdrive and speculation about features and functions is bordering on frenzy. Some outlets are showing “leaked” pictures, others claiming the inside track on feature sets. Amidst this circus, which seems to be running without need for further factual fuel, Apple (AAPL) has been steadily working a different agenda: expanding their potential market through new global carrier partners. The depth and scope of this newfound reach, from India to Scandinavia to Hong Kong, by the numbers, and in graphics, is as impressive (if not more so) than the volume of hype.

This edition of Metue’s “By the Numbers” report takes a one stop look at the iPhone by carrier relationship. Like the game of risk, this one is all about Apple’s sweeping tide across the map of the world.   

For the quick overview of this data, there is a visual map.  It shows existing market penetration and carrier partners. (Clicking the link, or clicking the thumbnail image above, will feature the full size version.)  

For greater detail, tables presented below run through the data used for the map.  These include a chronological list of carrier partnerships announced along with the geography covered and total available subscribers per carrier.

(Note: A much larger version is also available on Scribd for reuse subject to copyright restrictions that are described at the end of the post).

Now a few other interesting data points:

•Apple had 26.7% of the U.S. Smartphone market in Q4 of calendar year 2007.  They had 19.2% in Q1 of 2008. Competitor Research in Motion (RIMM) had 35.1% in Q4, 44.5% in Q1 (via IDC).   

The negative trend could be troubling given Apple’s competition with RIM’s Blackberry, but it’s difficult to draw a conclusion from the limited data. One minimizing explanation is that buyers have been holding off in anticipation of the new phone. Another theory, Apple’s exclusive single-carrier relationship has begun to limit their ability to sell to a broader range of corporate customers. The new phone could address both issues.

•Apple officially remains committed to the prediction that they will sell 10m iPhones during calendar 2008. Many analysts have adjusted their predictions to a much higher level. Piper Jaffray’s Gene Munster is forecasting 12.9million units sold. Oppenheimer analyst Yair Reiner is predicting 14.5m.  He’s predicting 28 million units for 2009.

•Part of the fuel for adjusting unit sale forecasts upwards is the volume of new distribution agreements Apple has signed. Taking sheer total subscribers among partners, Apple’s addressable market size for iPhone sales (based on subscribers at partner cellular providers) is now at upwards of 550million people.  Even after factoring in adjustments to address the fact that not all subscribers are realistically qualified to be considered potential iPhone customers, the number is still substantial.  

(Analyst's note: Total carrier numbers used without adjustment would be misleading. Some cell customers counted in total subscribers won’t fit as potential iPhone buyers due to their income and spending power. This is especially true in lower income and developing economies in countries like India. Other carrier subscribers, within the narrower geography of a country, won’t fit because they don’t currently have access to the kinds of data network speeds and services that would make an iPhone purchase realistic.)

•3G networks, which are virtually assured to be accessible on the new phone, represent a significant part of some of Apple’s new global market opportunities and the scale is growing. As an example, Orange UK has the largest 3G/2.5G network in their home market yet they are still spending a reported £1.5m a day on network upgrades.

•With what appears to be non-exclusive carrier agreements in India and Italy, and with Spain likely to be non-exclusive six months or less after launch (Telefonica (TEF) is reported to have exclusivity in the Spanish market for only an initial period before competitors also gain distribution rights), Apple is poised to to try and capture broader segments of some international markets.

•While Apple has no official partner in Japan and is only rumored to be talking to NTT DoCoMo (DCM), cellular usage patterns give an idea of just how important that market will be. Case in point, despite less than half the cellular subscribers (about 100m in Japan, 255 in the U.S.), mobile based commerce reportedly generated $10b in Japan (about $185 a person) compared to $480m ($13 per person) in the U.S. (via Fast Company).

•As of April 2008, according to Wireless Watch Japan, the leading wireless provider, NTT DoCoMo, has 53m subscribers. 44m use 3G services. At number 2 and 3 providers KDDI (KDDIF.PK) and Softbank (SFBTF.PK), the penetration of 3G is just as large or larger. KDDI has 30.2m total, 29.8 use 3G. Softbank has 18.8m subscribers, 14.5 of which are using 3G.

•-•NOW TO THE TABLES•-•

Carrier	Country	Date (approx.)	Available Subscribers (est.)
AT&T	U.S.	6/29/07	71m
France Telecom Orange	France	11/9/07	24m
O2 UK	England	11/9/07	17.8m
Deutsche Telekom  (T-Mobile)	Germany	11/9/07	37m
O2 Ireland	Ireland	11/9/07	1.6m
Deutsche Telekom  (T-Mobile)	Austria	2/12/08
Rogers Wireless	Canada	4/29/08	7.5m
Vodaphone*	Australia	5/6/08	140m
Vodaphone*	Czech Republic	5/6/08	140m
Vodaphone*	Egypt	5/6/08	140m
Vodaphone*	Greece	5/6/08	140m
Vodaphone*	Italy	5/6/08	140m
Vodaphone*	India	5/6/08	140m
Vodaphone*	Portugal	5/6/08	140m
Vodaphone*	New Zealand	5/6/08	140m
Vodaphone*	South Africa	5/6/08	140m
Vodaphone*	Turkey	5/6/08	140m
Telecom Italia	Italy	5/6/08
American Movil	Mexico	5/7/08	50m
American Movil	Jamaica*	5/7/08	3.5m
American Movil	Dominican Republic*	5/7/08	3.5m
American Movil	Brazil	5/7/08	30.2m
American Movil	Colombia	5/7/08	22.34m
American Movil	Argentina	5/7/08	12.9m
American Movil	Paraguay	5/7/08	9.6m
American Movil	Guatemala*	5/7/08	8.16m
American Movil	Nicaragua*	5/7/08	8.16m
American Movil	El Salvador*	5/7/08	8.16m
American Movil	Honduras*	5/7/08	8.16m
American Movil	Ecuador	5/7/08	9.65m
American Movil	Peru	5/7/08	5.46m
American Movil	Chile	5/7/08	2.67m
Swisscom	Switzerland	5/7/08
France Telecom Orange	Poland	5/8/08	14m
France Telecom Orangeˆ	Spain	5/8/08	11m
Telefonica	Spain	5/9/08	22m
Vodaphone*	Portugal	5/10/08	140m
Singapore Telecom	Australia	5/12/08	7m
Singapore Telecom	India	5/12/08	64.4m
Singapore Telecom	Philipines	5/12/08
Singapore Telecom	Singapore	5/12/08	1.9m
France Telecom Orange	Austria	5/16/08
France Telecom Orange	Belgium	5/16/08	3.4m
France Telecom Orange	Egypt	5/16/08	10.7m
France Telecom Orange	Jordon	5/16/08	1.5m
TeliaSonera	Sweden	5/27/08	106m¹
TeliaSonera	Norway	5/27/08	106m
TeliaSonera	Denmark	5/27/08	106m
TeliaSonera	Finland	5/27/08	106m
TeliaSonera	Lithuania	5/27/08	106m
TeliaSonera	Latvia	5/27/08	106m
TeliaSonera	Estonia	5/27/08	106m
Hutchinson Telecom	Hong Kong, Maccau	5/30/08	2.5m
NTT DoCoMo	Japan	Rumored	53m

 

Notes:
1	Vodaphone (VOD) has more than 250m subscribers across 66 countries. 140m is an estimate for the ten announced May 6.
2	America Movil (AMX) operates networks through several brands including Comcel Colombia (Colombia), Claro, Telcel (Mexico) and Porto. Many of their Latin and South American services are via Claro.
3	America Movile subscriber numbers for the Dominican Republic and Jamaica are a combined total. Guatemala, El Salvador, Honduras and Nicaragua are also combined.
4	Swisscom (SCMWY.PK) in Switzerland and France Telecom (FTE) via Orange Polska in Poland are still rumored and not confirmed as noted.
5	France Telecom Orange owns 77% of Spanish company Amena (aka Orange Espana). They are expected to offer the phone in Spain but Telefonica appears to have an exclusive window for the first 6 months.
6	Telefonica will offer the phone in Spain through the Movistar brand. Exclusivity appears limited to the first 6 months or less.
7	¹ Telesonera subscriber numbers are sum for entire network.
8	NTT DoCoMo is still rumored in discussion.

 

[Copyright Note on the Metue iPhone Map:  The image has been presented here in a reduced size for optimal web viewing.  While it does enlarge on mouse click, a much larger copy has also been placed on the iPhone compatible document repository website Scribd for those interested in even higher resolution (Contact me for print resolution).  All copyrights are retained by Metue but digital reprinting or reuse is allowed provided Metue is credited in any reprint and, in the case of a website or blog using the graphic, a link back to Metue.com also accompanies the reprint.]

Comments

[Arm]

After release of iPhone 2.0, App store will be the biggest driver for iPhone. Software will rule the mobile market. It is so sad that Palm lost its touch, they had everything goign for them.

[wallawallabingbang]

Apple soon will have no competition.

[John Corey]

It is good to see the detail on the market size, the way Apple is handling the roll out and other things that are not device specific. As you note there are plenty of rumors about the actual handset.

As a real estate investor who once worked for Jobs during the NeXT period, I am looking forward to buying a iPhone. I have been holding off getting one in the UK until 3G is supported. It seems like the time has come.

I am looking forward to the upcoming keynote speech.

[bike 05673]

Who is making the PA for the 3g I phone???

[tom1234]

after reading this article --all i can say is thank you ---good--very good reporting-- this is the meat needed to evaluate this product

[Oh Blah Dee Blah Dah]

RE: "The negative trend could be troubling ... Another theory, Apple’s exclusive single-carrier relationship has begun to limit their ability to sell to a broader range of corporate customers. ... "

There is NO negative trend, and the single carrier relationship was explored as a TEST marketing strategy.

Apple's first iPhone marketing was a TEST to see how its strategy would work with exclusive carriers versus ALL carriers.

Apple now knows how it wants to proceed and is implementing that strategy.

The first iPhone was ONLY officially available in 4 countries, and then 6 countries for the last few months.

The Apple freight training is coming. STAND ASIDE!

[seeksome]

$200. here we come Steve Jobs do you stuff.To buy your Apple stuff go to:seeksometing.com

[seeksome]

seeksomthing.com

[Rob L]

"One minimizing explanation is that buyers have been holding off in anticipation of the new phone."

I'm one that's been holding off, although more so because I'm waiting for my Verizon contract to end in a few months.....but even if I wanted a pre 3G phone, can you even find one? None at apple.com, at attwireless.com you're limited to 1 per household and considering that my roommate already has one I wonder if I'd even be able to make the purchase if I want to.

[Alpha Seeker]

For all of you who want to make money - The current propaganda around Apple and Iphone is put out by various individuals who have loaded on Apple calls in expectations of Iphone launch date. On that date they will sell into the news. Nevermind that I need to charge my Iphone every 8 hours and I have to power it 2-3 times a day because ATT service sucks. Anyways, hopefully the new one is better.

[Cho Cha]

I think that apple will sell more 3g iPhones in the US this go around. Many (myself included) didn't understand what the iPhone could do or see it's potential.
I know 3 people who have iPhones and 8 that are waiting for the 3g plus the 3 are going to upgrade.

I hope Apple ordered enough phones!

[mollytjm]

my husband and i are both on Verizon until October, but we also want the G3 iphone and will buy in October the minute our contract is up with Verizon. We're not alone, that's for sure!

[KenC]

You said, "(Analyst's note: Total carrier numbers used without adjustment would be misleading. Some cell customers counted in total subscribers won’t fit as potential iPhone buyers due to their income and spending power. This is especially true in lower income and developing economies in countries like India."

While this makes intuitive sense, it does not factor in that countries like India and China do not sell cellphones subsidized like in the US, which would make the addressable market larger, as people are less resistant to full-retail pricing. Also, a study in China showed that 25% of the market there, spends 500USD on average for their cellphones. That's a far larger percentage of the addressable market willing to spend $500, than in the US. So, while your analyst's note makes intuitive sense, it does not take into consideration the counterbalancing effects I noted above.

[ultradodgy]

Oops... Softbank was just announced as the Japan carrier, leaving DoCoMo in the dust. iPhone expected here by year-end.

search.japantimes.co.j...

[Seth]

Yep, so much for the rumors Ultradodgy. Unfortunately, that news broke a couple days after the original article. The version on my own site, Metue.com, has been updated to account for it.

Softbank has only about 18.8m subscribers (14.5m on 3G) to DoCoMo's 50+ million so its a smaller land grab. Apple was probably able to negotiate better terms.