See the latest analysis from Argus Insights on Apple iPhone sales performance. Leverage consumer insights from around the world, this presentation shows how Apple is faring against Xiaomi in China, Samsung in the US and against themselves globally. We saw robust demand in the US, Europe and China for Apple iPhones, with sell-through in Q3 on par or above that of Q1, the holiday season. Apple continues to do well against Samsung in China but we are seeing some softness in the US market where Samsung demand went up while Apple's dropped, but lower than expected. Consumer interest in the iPhone 5S has slowed in both the US and China. It is most disturbing in China where we see interest in the iPhone 4S exceed that of the 5S and 5C. Interest fell in the 5C at a lower rate in the US. So while Argus believes Apple will outperform Q3 2013, seeing the rapid drop in interest for the flagship iPhone 5S so far ahead of their next product launch signals a rough Q4 for iPhone sales.

1. Apple Earnings Preview
How Consumer Smartphone
Demand Is Shaping Up Globally
Dr. John Feland, CEO

2. Page 2© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
(Really) Brief Intro to Argus Insights
COLLECT REPORTANALYZ
E
TAKE
ACTION
0
10
20
30
40
50
60
0
1000
2000
3000
4000
5000
6000
7000
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2011 2011 2011 2011 2012 2012 2012 2012 2013 2013
MillionsofiPhones;BillionsofdollarsinRevenue
BuzzVolumeforiPhoneModels
Argus Insights Beat Wall Street Estimates for
Q2 2013 iPhone Sales
Copyright© 2013 Argus Insights, Inc.
Consensus
Morgan Stanley
Argus Insights
Estimate Based onApple’s Actual Q2
iPhone Unit Volume
• Mobile Phones
• Home Automation
• Consumer Electronics
• Wearables
• Appliances, Large and Small
• Consumer Services
• CPG and more!

3. Page 3© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Does Listening to Consumers Actually Work?
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Qtr3 Qtr4 Qtr1
2013 2014
IndexedBuzzVolume
Chinese iPhone Consumer Buzz
iPhone 4
iPhone 4S
iPhone 5
iPhone 5C
iPhone 5s
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Qtr3 Qtr4 Qtr1
2013 2014
US, UK, CA iPhone Consumer Buzz
iPhone 4
iPhone 4S
iPhone 5
iPhone 5C
iPhone 5S

4. Page 4© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Does Listening to Consumers Actually Work?
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Qtr3 Qtr4 Qtr1
2013 2014
IndexedBuzzVolume
Chinese iPhone Consumer Buzz
iPhone 4
iPhone 4S
iPhone 5
iPhone 5C
iPhone 5s
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Qtr3 Qtr4 Qtr1
2013 2014
US, UK, CA iPhone Consumer Buzz
iPhone 4
iPhone 4S
iPhone 5
iPhone 5C
iPhone 5S
Apple Guides
Towards Lower
Revenue for Q1
Apple’s Q1
Breaks Sales
Records GloballyArgus Insights
knew Q1 was
going to be huge
APPL jumps 14%
within days

5. But What About This Past Quarter?

6. Page 6© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Reviewing Q1 Shows Recovery from Slow Q4
Apple
BlackBerry
HTC
LG
Motorola
Nokia
Samsung
Xiaomi
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2013 2014
Consumer Mindshare of Global Mobile Brands

7. Page 7© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
During Q1 Apple, Motorola and Xiaomi Made Gains At The
Expense of Samsung, HTC and BlackBerry
Apple
BlackBerry
HTC
LG
Motorola
Nokia
Samsung
Xiaomi
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2013 2014
Consumer Mindshare of Global Mobile Brands

8. Page 8© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Q2 Shows An Overall Increase over Q1 and Q2 2013
Apple
BlackBerry
HTC
LG
Motorola
Nokia
Samsung
Xiaomi
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2013 2014
Consumer Mindshare of Global Mobile Brands

9. Page 9© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Q2 Sees Samsung and HTC with Big Gains over Q1
Apple
BlackBerry
HTC
LG
Motorola
Nokia
Samsung
Xiaomi
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2013 2014
Consumer Mindshare of Global Mobile Brands

10. Page 10© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Breaking out Q2Q Changes by Retailer Explains Dynamics
• Verizon Posted
Impressive gains with
small impact to delight
• AT&T and Tmobile both
had significant boosts
over Q1, showing impact
of aggressive promotions
• Sprint continues to lose
both favor and interest
• Canadian carriers driving
customers away
• China Unicom remained
mostly flat
• Overall Market is
trending down in Delight
but up in Buzz over Q1
• BestBuy losing
mindshare while Amazon
and Walmart are gaining
Verizon
TMobile
Sprint
Rogers
ChinaUnicom
BoostMobile
BestBuy
BellCA
ATT
Amazon
Amazonde
VodafoneUK
Walmart Overall Market
ConsumerDelight
Consumer Buzz (Log Scale)
Retailers and Carriers (Q1 to Q2 2014)
Verizon
TMobile
Sprint
Rogers
ChinaUnicom
BoostMobile
BestBuy
BellCA
ATT
Amazon
Amazonde
VodafoneUK
Walmart
Overall Market

11. Page 11© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Samsung Posted Impressive Gains During Q2, Thanks to Verizon
Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2011 2012 2013 2014
US, UK and CA Smartphone Consumer Interest
Apple
Samsung

12. Page 12© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Apple is Beating Samsung in China but losing to Xiaomi
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2012 2013 2014
Chinese Smartphone Consumer Interest
Apple
Samsung
Xiaomi

13. Page 13© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Interest In Iphone 5S Falling Faster Than Other Handsets
Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2011 2012 2013 2014
Apple Consumer Interest By Handset in US, UK, and CA
Apple iPhone 3GS
Apple iPhone 4
Apple iPhone 4S
Apple iPhone 5
Apple iPhone 5C
Apple iPhone 5S

14. Page 14© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Iphone 5S Losing Out To Cheaper Iphone 4S In China
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2012 2013 2014
Apple Consumer Interest By Handset in China
Apple iPhone 4
Apple iPhone 4S
Apple iPhone 5
Apple iPhone 5C
Apple iPhone 5S

15. Page 15© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
At The Same Time Galaxy S5 Is Having Best Launch Since S3
Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2011 2012 2013 2014
Samsung Consumer Interest by Handset in US, UK, and CA
Samsung Galaxy Note
Samsung Galaxy Note 2
Samsung Galaxy Note 3
Samsung Galaxy S2
Samsung Galaxy S3
Samsung Galaxy S3 Mini
Samsung Galaxy S4
Samsung Galaxy S4 Mini
Samsung Galaxy S5
Samsung Galaxy S5 Active
Samsung Galaxy Note 3 Neo

16. Page 16© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Note 3 and new S5 are Boosting Samsung in China
Samsung Galaxy S5
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2012 2013 2014
Samsung Consumer Interest by Handset in China
Samsung Galaxy Note 2
Samsung Galaxy Note 3
Samsung Galaxy S3
Samsung Galaxy S4
Samsung Galaxy S5

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In Last 20 Weeks, Apple Losing to Xiaomi and Falling Faster
than Samsung
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
ConsumerDelight(-1to1)
Buzz and Delight for Major Smartphone Brands
Samsung Apple Xiaomi

18. Page 18© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
What is driving interest in flagship handsets?
• iPhone users, numb to poor battery life, discuss it less than
other brands.
• HTC One M8 customers rave about the camera quality
• LG G2 customers are most excited about their screens
• Galaxy S5 finishes in the middle of the pack all around

19. Page 19© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
What does this mean for Apples Q3?
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Year over Year Delta in Consumer Demand
Rest of World
China

20. Page 20© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
0
10000000
20000000
30000000
40000000
50000000
60000000
QuarterlyiPhoneUnitVolumes
Predicted Vs Actual iPhone Shipments
Argus Insights
Unit Sales
Morgan Stanley
Wall Street Concensus
Apple’s Q3 Will Be Great but Q4 Needs Help
Adjusted R2: 81%
P-value: 0.026
Estimated
sales above
40 mil

21. Page 21© 2014 Argus Insights, Inc. Confidential: Do Not Distribute
Key Takeaways
• Apple will beat expectations for FY Q3 2014
• Apple Likely to guide lower for Q4
• iPhone 5S interest is falling faster than any prior
Apple handset
• Samsung made significant gains against Apple during
CY Q2 in US and Europe
• Xiaomi exceed Apple at China Unicom, coupled with
iPhone 4S in higher demand than 5S signals
weakening demand in China for iPhone
• iPhone 6 has to do more than 5S to refresh the brand
as experience gap narrows to millimeters

22. Please contact us if you’d like to know more!
http://www.argusinsights.com Twitter: @argusinsights
1-877-992-7487 sales@argusinsights.com