While iPhone sales are still strong in volume terms, year-over-year sales growth is crashing back down to reality.
For the first quarter, iPhone sales were up only 7 per cent from the same quarter a year prior, the lowest year-over-year growth since the iPhone’s introduction in 2007.
iPad sales growth, meanwhile, was strong this quarter, up 65 per cent year-over-year on the heels of the iPad Mini’s launch in November 2012.
Over 37 million iPhones sold is nothing to scoff at, but the iPhone may have limited upside for sales expansion. The smartphone market globally is still due for significant growth, but the the stubbornly high average selling price of iPhones gives it a limited potential market.
As smartphone growth increasingly moves to the developing world, Apple will have to focus on converting current smartphone owners in developed markets to drive sales growth.
Alternately, Apple may launch a more accessible lower-end iPhone in order to compete more effectively in emerging markets.
Tablets have significant upside since they are not as thoroughly penetrated in the wealthy markets where Apple plays best. Furthermore, an iPad Mini costs $329, roughly half the cost of a new iPhone. In other words, Apple bowed to the low-end of the tablet market with the Mini, but has thus far refused to do the same for smartphones. This is why, at the moment, iPads have greater sales growth potential for Apple.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.