In his conference call reply, Cook says that iPhone 5s unit sales to end users grew compared to iPhone 5 sales to end users during the same period a year earlier the first full quarter after its launch. But he's also saying that the "mid-phone" iPhone 5c sales to end users grew faster than the previous phone that was in that same category, which means he's referring to the held-over, 16GB iPhone 4S. The 4S was discounted by $100 when the iPhone 5 was released in September 2012. To repeat: Cook said the sales to end users of the 5c were higher than the discounted 4S sales of a year ago.
Secondly, Cook goes on to talk about Apple's very strong growth in the quarter in overseas markets, many of them emerging markets, where the Conventional Wisdom had decreed that Apple faced stagnating growth because the high-end iPhone simply was too expensive. Then he turns to the North American market.~~
"We sold more 5ses than we projected...."
Cooks says Apple "did not do as well" in North America, where "our...business contracted somewhat year-to-year." There were two reasons, according to Cook. The one relevant to this discussion is Apple's sales projections for the quarter. "[I]f you look at the reason for this [contraction], one [reason] was that as we entered the quarter and forecasted our iPhone sales...we actually sold more iPhone 5ses than we projected," he said. "So, the mix was stronger to the 5s and it took us some amount of time in order to build the mix that customers were demanding."
Cook went on to say that a second reason for not doing as well in North America and therefore weighing down the overall results, was the decision by the main mobile carriers to be stricter about their smartphone upgrade policies fewer subscribers were allowed to upgrade.
So what is Cook saying? More people than expected ordered the 5s, and Apple had to scramble for most of the 12-week quarter to come up with enough units to "get...the iPhone 5s into proper supply." He is unmistakably clear: "we sold more iPhone 5ss than we projected. So, the mix was stronger to the 5s...."
Yet almost universally, Cook's comments were interpreted as saying, or meaning, something quite different: that Apple had over-estimated demand for the iPhone 5c and had, as a result, sold fewer units than projected. Apparently, a comment such as "the mix was stronger to the 5s" was interpreted to mean that "the mix to the 5C was weaker." But that's not necessarily the case.
Unfortunately, none of the analysts on the call specifically asked about the 5c sales projections or whether the 5c had been out of balance with regard to demand and supply during the quarter.
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