iPhone unit sales: count users, not phones

An Office Hours question asked by Ian H., July 31, 2026.

Q: We're used to remarkably flat Apple pricing over the years — a pound a day, the stairway to heaven. Generally, increasing revenues have correlated with increasing unit sales. Now price increases are feeding through, yet revenue is only forecast to grow about 10%. That may translate to lower unit sales for the first time in some time. What are the consequences, and the second-order effects, such as on subscriptions?

First of all, we're not talking about a mature quarter — it's like a launch quarter for some things, but maybe not too much volume will happen. Another thing bothers me a little: I don't know when they're going to launch the next portfolio of products. If it happens in early September, they might see a surge into September. But maybe for constraints — things in manufacturing, other things in the supply chain — they delay; they couldn't get the lines up and running. So they may announce, say, September 15th, but start to fill orders a week later. And that doesn't hit the quarter, because the quarter ends at the end of September. That might actually cause what they've excused themselves with — this “constrained” language.

There's a lot that could be different this quarter. I warned about it and said the guidance could be weird. I was actually referring to the December quarter, because maybe not all the products are out in the fourth quarter — they're going to push some things into the first. So they're changing the mix, they're changing the pricing, they're under constraint with supply. There's a lot that's difficult to perceive here. I think this is temporary, though.

The number of devices out there depends mostly on the number of customers, first of all, which is growing, and the duration of use, which is also growing. I don't think we should worry that one quarter the unit number isn't as high. There have been quarters where unit numbers were going down, and everybody wrote Apple off and said it's all over. Focus on the number of users. Focus on those lines on the graph showing proxies for the number of users: subscriptions, active devices, and phones in use, if we can get that data. ACTIVE is still the model to go with.

I wouldn't read too much into this quarter, or even the next two or three quarters, because we might have these weird things happening where they decide to spread things out. When I thought about this, I said: we're probably going to have people freak out, because the guidance is going to be weak. I didn't think it would be because of this or that constraint — I thought they would say something that wouldn't tip their hand. Because if you're going to launch this folding product, and it's going to be limited in production, and you're delaying the low-end product until next year, maybe your units are going to be pretty thin going into the next quarter and the one after. I was worried about the guidance, and I thought most people would freak out. But they're doing this for a purpose, and they've been planning it for years. Not just the folding — what's been planned for years is Apple Upgrade, and splitting the product launch into two quarters. They've probably wanted to do this for 15 years and just said: no, it's not coming together. I think it makes sense to do all of these things. But on a comp basis, it's going to look ugly, because you're readjusting everything. So let's watch and see what happens. There's a lot of work going on here.

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Editor's Note: This was one of the questions asked by participants in Asymco's July 2026 Office Hours live Q&A session, held the day after Apple's FQ3 2026 earnings and open to Asymco One subscribers.

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