Apple's Growth Trails Smartphone Market in 3Q 2013, but Improves in Broader Mobile Phone Market

MacRumors · Oct 29, 2013

Research firm IDC today released its estimates on worldwide mobile phone sales for the third quarter of 2013, once again showing Apple's iPhone growth trailing that of the overall smartphone market. Apple's 33.8 million iPhone shipments were up 25.7% year-over-year, compared to 38.8% growth for the entire market. Market leader Samsung grew at slightly higher than the industry average, and Apple with its 13.1% share was able to hold onto the second-place ranking ahead of Huawei, Lenovo, and LG, all of which showed strong growth but remained at under 5% market share.

Worldwide Smartphone Shipments in 3Q13 in Millions of Units (Source: IDC)

Apple's total volumes speak to the early success of the iPhones 5S and 5C, and the softening demand of older devices prior to the new models launching. The iPhone 5S lived up to the hype of the gold case and the fingerprint sensor, and the iPhone 5C with an array of colors. At the same time, limited usability on the fingerprint sensor and higher-than-expected pricing on the iPhone 5C drew mixed reactions. Still, this did not prevent Apple from enjoying a record 9 million units shipped in their debut.

As in previous quarters, Apple's performance in the overall mobile market benefited from the decline of the featurephone, with the company's 25.7% year-over-year growth easily topping the market's overall 5.7% growth and allowing Apple to remain firmly in third place behind Samsung and Nokia. According to IDC, smartphones accounted for 55% of total mobile phone shipments during the quarter, up from 42% in the third quarter of 2012.

Worldwide Mobile Phone Shipments in 3Q13 in Millions of Units (Source: IDC)

Apple released its financial results for the third calendar quarter (fourth fiscal quarter) yesterday, revealing that the iPhone continues to account for majority of the company's revenue at 52 percent.

Article Link: Apple's Growth Trails Smartphone Market in 3Q 2013, but Improves in Broader Mobile Phone Market

fritzov · Oct 29, 2013

Like Tim would have said "Apple is doing amazing"

Squilly · Oct 29, 2013

What is Hauwei? Off-brand manufacturer or popular manufacturer outside the US?
On topic: numbers are going to rise next year as well, my prediction.

ValSalva · Oct 29, 2013

Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.

TC03 · Oct 29, 2013

Squilly said:
What is Hauwei? Off-brand manufacturer or popular manufacturer outside the US?
On topic: numbers are going to rise next year as well, my prediction.

Chinese company. China is big, easy to become a become a world class player without serious volume outside China.

Jeans89 · Oct 29, 2013

In order to gain market share Apple should make a cheap, plastic entry level phone...wait

840quadra · Oct 29, 2013

This was the most potent paragraph from the linked article

The Android smartphone platform has created vast opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market. Smartphone shipments from vendors outside of the top 5 grew from 33.7% of the market in 3Q12 to 41.3% in 3Q13.

With that in mind, it won't be long until Apple slips into 3rd and 4th as adoption of Android continues to grow. Not exactly a bad place, as long as Apple continues to grow, and maintain a reasonable chunk of overall users in an active installed base.

What I will be curious to see, is if Samsung moves to Tizen, how much uptick that platform will have with regards to other handset manufacturers in the future.

TC03 · Oct 29, 2013

ValSalva said:
Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.

Profits matter most, but the corresponding time scope is important as well.

Going for volume and low margins now could be more profitable in the long run. Only problem is: the bigger the scope, the bigger the uncertainty of the market and the harder it is to evaluate current performance. However, Apple isn't doing that. It seems that Apple thinks the currenty strategy applies best to the scope within their control (which is 3-5 years, I suspect).

springsup · Oct 29, 2013

Squilly said:
What is Hauwei? Off-brand manufacturer or popular manufacturer outside the US?
On topic: numbers are going to rise next year as well, my prediction.

Huawei are a Chinese company who make cheap Android devices. They're also the world's largest supplier of telecoms infrastructure equipment (they recently overtook Ericsson for that spot). Their phones are consistently among the best sellers on the European Amazon stores.

I think lots of people here will agree that price is the main reason people choose not to buy an iPhone. My opinion is that Apple's prices were decided at a time when the iPhone had a substantial lead on its competitors, but that lead isn't nearly as big today. That leads to the iPhone being overpriced.

Apple likes to ignore their competitors and just focus on their own products, which is a great philosophy. However when it comes to pricing, the iPhone exists in a very competitive marketplace where very good devices are available at only a fraction of the cost of an iPhone.

ChrisA · Oct 29, 2013

This is pretty much as we should expect. As time goes one Apple's share of the smart phone market will decline. This is because Apple will not compete in the under $100 phone category.

My son just bought a Android phone outright, no contract with a prepaid account so there is ZERO monthly bill. He paid about $100 for the phone. It is not as nice as an iPhone but the monthly bill is ZERO and the total out the door cost has about $100. Most phones sold are like this, very low end

It is the same with Macs. You can buy a computer for $350. Apple will never try and compete with that and so will never have the majority of the market.

Porche and BMW do the same thing with cars, Those companies will never out sell Toyota or Honda.

springsup · Oct 29, 2013

ValSalva said:
Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.

NO

Steve Jobs said:
My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everything.

Steve Jobs said:
What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.

From a wise man.

osx11 · Oct 29, 2013

How come samsung's phones are never in such tight supply? Considering they're selling a lot more than apple.

winston1236 · Oct 29, 2013

ValSalva said:
Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.

only to stock holders. most of the people in the world are poor so whoever can tap that market will make the most money.

----------

osx11 said:
How come samsung's phones are never in such tight supply? Considering they're selling a lot more than apple.

apples "short supplies" are deliberate.

the8thark · Oct 29, 2013

Is this another shipments vs sales issue?

IFanLai · Oct 29, 2013

What's the market share breakdown by Pricing?

It would be interesting to see a breakdown of shipment by pricing tiers.

What is Apple's market share for phones priced at $400+? What is the overall growth rate for that segment? After all, this is the segment where most of the smart phone profits come from.

If we look at the numbers in the tables, it's apparent that many of the feature phone users have upgraded to "smart phones". How is a phone classified as smart? It seems that it's done by specs or OS. A more sensible approach is by usage. If the user mainly uses the phone for calling and texting as opposed to browsing and texts, then the phone should be counted as a feature phone.

In sum, it would be interesting to see a breakdown of shipment by usage, price-point. Customer loyalty by this breakdown would provide tremendous insight too.

Joe

EbookReader · Oct 29, 2013

2Q

Android probably crossed the 80% mark in the 3Q.

Android 80%
iOS 13.1%
Windows + Blackberry: 6.9%

IFanLai · Oct 29, 2013

Breakdown by Usage, Price-Point.

It would be interesting to see a breakdown of shipment by pricing tiers.

What is Apple's market share for phones priced at $400+? What is the overall growth rate for that segment? After all, this is the segment where most of the smart phone profits come from.

If we look at the numbers in the tables, it's apparent that many of the feature phone users have upgraded to "smart phones". How is a phone classified as smart? It seems that it's done by specs or OS. A more sensible approach is by usage. If the user mainly uses the phone for calling and texting as opposed to browsing and texts, then the phone should be counted as a feature phone.

In sum, it would be interesting to see a breakdown of shipment by usage, price-point. Customer loyalty by this breakdown would provide tremendous insight too.

Joe

Will do good · Oct 29, 2013

ValSalva said:
Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.

Spot on. Who the hell wants to spends a lot, sell a lot and make a thin profit.

Bare · Oct 29, 2013

Nokia not even on the smartphone list but still kicking butt. They must still be selling 60 million of these every quarter:

EbookReader · Oct 29, 2013

Will do good said:
Spot on. Who the hell wants to spends a lot, sell a lot and make a thin profit.

Customers do. Customers want high end specs smartphone for low price (thin profit for manufacturer).

For example, this high end specs smartphone is selling for $327 unlocked/off-contract in China.

Qualcomm Snapdragon 800 quad-core 2.3GHz CPU
Sharp/LG 5″ 1080P IPS display with ultra-sensitive touch
2GB LPDDR3 RAM
16GB eMMC4.5 flash memory
SONY 13 MP Exmor RS CMOS back camera
2MP BSI front camera
NFC & 2.4/5G WiFi support
3050 mAh battery

And it's outselling the Iphone in China. It's easy to compete when it's half the price of the iPhone while the specs are comparable (if not better).

ValSalva · Oct 29, 2013

springsup said:
NO

From a wise man.

This is not the early nineties and it's not the PC market. Steve Jobs' quotes may not apply to the current market and current products. The race to the bottom in the PC market was over a decade off. The race to the bottom in mobile is imminent and would probably be happening now if it were not for Apple.

unlinked · Oct 29, 2013

Bare said:
Nokia not even on the smartphone list but still kicking butt. They must still be selling 60 million of these every quarter:

I wish they had longer lists. Top 5 is only 60% of the market.

koppie644 · Oct 29, 2013

Squilly said:
What is Hauwei? Off-brand manufacturer or popular manufacturer outside the US?
On topic: numbers are going to rise next year as well, my prediction.

Huawei is the No 2 device provider for base stations and the core networks, after Ericsson

rygamble · Oct 29, 2013

This article is stupidly obvious. Of course Apple's growth outpaces the mobile phone market as a whole. It only produces smartphones, and the smartphone sector of the mobile phone market is the only one seeing any significant growth.

ciaran00 · Oct 29, 2013

"Shipments".

Apple's Growth Trails Smartphone Market in 3Q 2013, but Improves in Broader Mobile Phone Market

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