Unit sales have been slowing for Apple (AAPL +1.15%), not that the company will tell you these days. In lieu of unit sales growth, Apple has instead been trying to focus investor attention on its growing installed base, which in turn fuels growth in its highly profitable services business. That operating segment represented 20% of revenue last quarter, but over a third of gross profit.
It's probably not great news that Apple's installed base growth in the U.S. is seemingly peaking.
Image source: Apple.
Survey says
Consumer Intelligence Research Partners (CIRP) today released its latest estimates on Apple's iPhone installed base in the U.S. The Cupertino tech giant now has an estimated 193 million iPhones active domestically, up from 189 million at the end of the fourth quarter.
Additionally, CIRP estimates that Apple sold 39 million iPhones worldwide in the first quarter, which would represent a decline of 25% compared to the 52.2 million handsets it sold a year prior. The iPhone average selling price (ASP) hit $803, according to CIRP, up from the official $728 ASP figure in the first quarter of 2018.
"The US installed base of iPhones continues to plateau," said CIRP partner and co-founder Josh Lowitz in a statement. "Relative to the most recent quarters, and especially to the past two or three years, slowing unit sales and longer ownership periods means that the growth in the number of US iPhones has flattened considerably." CIRP's estimates are derived from a survey of 500 U.S.-based Apple customers conducted between late March and early April.
What's less clear is how large Apple's global iPhone installed base is. the company confirmed earlier this year that the global iPhone installed base had hit 900 million, but sequential growth varies dramatically around the world, as does services monetization.
Expanding beyond the installed base
On the last earnings call, Apple management noted that the global installed base across all product categories has reached all-time highs, including iPhone, Mac, and iPad. The company's installed base is now around 1.4 billion.
"Importantly, our active installed base of devices continues to grow in each of our geographic segments and set a new all-time record for all major product categories," CEO Tim Cook said. "That growing installed base is a reflection of the satisfaction and loyalty of our customers and it's driving our services business to new heights."
In addition to growing the installed base, the other main strategy that Apple is pursuing is increasing the number of services it offers through its digital storefronts -- both first-party services and third-party ones that the company gets a cut of. On top of that, Apple has even started to extend its services beyond its own installed base, recognizing the potential of selling services to users on other platforms, most notably video-streaming platforms.
