iPhone's Share of Smartphone Market Slips in Fourth Quarter of 2009

[MacRumors]

The Wall Street Journal reports on data from technology market research firm ABI Research showing that the iPhone's share of the worldwide smartphone sales market slipped in the fourth quarter of 2009 to 16.6%, down from 18.1% in the previous quarter. Despite strong performance from Apple during the quarter, the overall market grew even faster, resulting in a dip for Apple's market share.

Apple's sales still grew, just not as quickly as everybody else's. Apple sold 8.7 million iPhones in the fourth quarter, which is 18% more than in the quarter before. But the overall smartphone market grew 26% in the same period of time, as Motorola Inc. introduced its first devices on Google Inc.'s Android platform and Nokia Oyj boosted its sales by 4.6 million alone.

Not mentioned in the article is the fact that Apple's sales, with only a single iPhone model, tend to follow something of a cyclical pattern centered around new handset launches in June or July of each year. While Apple experienced record-high iPhone sales for the fourth quarter coming on the heels the third quarter's first full sales period for the iPhone 3GS, the margin of improvement was likely smaller than otherwise would have been if the third quarter had not had the boost of new hardware behind it. Manufacturers offering multiple models of smartphones are more likely to see more consistent performance reflecting overall industry trends as they introduce new and updated models at staggered intervals.

Article Link: iPhone's Share of Smartphone Market Slips in Fourth Quarter of 2009

 

[bbplayer5]

At this point, I am glad I switched to the droid. Its better than the 3Gs in pretty much every aspect except the app store.

With that said, competition is great, and I fully expect the iPhone 4G to convert me back <3 Its probably going to be amazing.

 

[sjo]

Not mentioned in the article is the fact that Apple's sales, with only a single iPhone model, tend to follow something of a cyclical pattern centered around new handset launches in June or July of each year. While Apple experienced record-high iPhone sales for the fourth quarter coming on the heels the third quarter's first full sales period for the iPhone 3GS, the margin of improvement was likely smaller than otherwise would have been if the third quarter had not had the boost of new hardware behind it. Manufacturers offering multiple models of smartphones are more likely to see more consistent performance reflecting overall industry trends as they introduce new and updated models at staggered intervals.

To be fair this fact gets rarely mentioned in this site when the huge success in the quarter of new model launch is reported. But it's good to remember that sort of facts when the market share slips.

 

[gdlcjr]

The reason for this is ppl are holding out and waiting for the new version. Once the new version comes out. You will see the sales will go up again.

 

[View]

I see this as a great thing for us! I switched to the Blackberry 9700 and waiting for the 4th gen iPhone. Hoping that it will be amazing, so I can go back to the iPhone

My iPhone 3G was just too laggy and slow, and I really didn't want to pay for the 3GS and be stuck in contract.

So, hopefully this will make Apple realize that they will need to make the 4th gen to be awesome, and again, be ahead of its competitors!

 

[ct2k7]

I'm on my first iPhone (1st Gen) and so far, the "updates" in the current iPhone haven't tempted me to get one.

 

[ShiftyPig]

The reason for this is ppl are holding out and waiting for the new version. Once the new version comes out. You will see the sales will go up again.

Actually, iPhone sales did go up from Q4 2009 (late June - late September: 7.4 million) to Q1 2010 (late September - late December: 8.7 million) The latter figure was a 100% improvement from the year before.

Apple did the best it could hope selling phones and still lost ground. Puts the Android threat into much clearer perspective.

 

[djdole]

We can't really draw any conclusions here.

You can't really use the number of iPhones Apple sold as an accurate representation of the number actually used in the hands of consumers.
Yes it's a good report for shareholders, but it's not an accurate representation of iPhones in current use.

Resellers could EASILY be purchasing phones in anticipation of greater iPhone demand (in the wake of the iPad general disappointment). These reseller purchases would register as Apple sales, but would not necessarily mean they are currently in use. The units could be sitting as unsold stock in the backrooms of said resellers.

So to be fair, that number can't really be accurately used to compare with the number of smartphones in current use.

 

[Stella]

iPhone down, Nokia UP!

So much for the dimise of Nokia!

 

[NT1440]

My prediction, Android will take most of the smartphone marketshare, because it is thrown on many devices (good and bad). Its basically Windows vs Mac round two, and we know where its going, except no one wants Winmo right now

 

[OllyW]

It's time for Apple to shorten the upgrade cycle.

Do it soon, I'm now out of contract and there's no way I'm upgrading to the 3GS knowing there's a new model on the way.

 

[sjo]

You can't really use the number of iPhones Apple sold as an accurate representation of the number actually used in the hands of consumers.
Yes it's a good report for shareholders, but it's not an accurate representation of iPhones in current use.

Resellers could EASILY be purchasing phones in anticipation of greater iPhone demand (in the wake of the iPad general disappointment). These reseller purchases would register as Apple sales, but would not necessarily mean they are currently in use. The units could be sitting as unsold stock in the backrooms of said resellers.

So to be fair, that number can't really be accurately used to compare with the number of smartphones in current use.

Apple reports the channel level during the earnings release conference call, they keep track on the devices as those move through the channel, and I believe they have pretty accurate information about how many units is sitting on the shelves and how many have been sold to consumers. The inventory level rose by about 270k units last quarter, so the number of iphones actually sold to customers was 8.43m.

 

[str1f3]

I'm glad this happened. OS 3.0 was an extremely lackluster upgrade for an OS that has seen no major update since then. They are even holding back 3.2 particularly for the iPad.

iPhone fans may not want to hear this but the Android upgrade cycles has been faster and has significantly better features out of the box than the iPhone though the App Store is better. I hope that 4.0 brings some real changes or the iPhone will continue to be marginalized. There is no reason for lacking multitasking because the 3GS is more than capable of handling it.

 

[virtualemotion]

Att

The cycle of Apple has an impact. However Apple is missing a lot of customer by just providing the device using AT&T. All other smartphone manufacture provide different platforms via many providers.

It brings two points:
1. Apple could gain much more if it would open up its device to other network providers.
2. Apple results are impressive considering that only one provider in the USA is being chosen.

Last but not least AT&T network issues are stopping a lot of people to switch to AT&T and iPhone...

Apple has surely ground and opportunity to gain on the competitors.

 

[OllyW]

The cycle of Apple has an impact. However Apple is missing a lot of customer by just providing the device using AT&T. All other smartphone manufacture provide different platforms via many providers.

It brings two points:
1. Apple could gain much more if it would open up its device to other network providers.
2. Apple results are impressive considering that only one provider in the USA is being chosen.

Last but not least AT&T network issues are stopping a lot of people to switch to AT&T and iPhone...

Apple has surely ground and opportunity to gain on the competitors.

Remember these are Worldwide market share figures so AT&T problems are not such a big factor in these results.

 

[djdole]

Apple reports the channel level during the earnings release conference call, they keep track on the devices as those move through the channel, and I believe they have pretty accurate information about how many units is sitting on the shelves and how many have been sold to consumers. The inventory level rose by about 270k units last quarter, so the number of iphones actually sold to customers was 8.43m.

For Apple stores, sure.
Accurate information maybe, but just for Apple stores. Apple can't really reliably tell how many units are sitting on the shelves at BestBuy, At&t, Orange(France), O2(UK) etc.
There's always the possibility of phones being jailbroken, used on alternate providers and never touching the app or itunes stores. I know people who (avoiding Apple apps like the plague) have never used Mobile safari, instead have just used MyFox since they bought the phone.

 

[snowleopard2009]

For Apple stores, sure.
Accurate information maybe, but just for Apple stores. Apple can't really reliably tell how many units are sitting on the shelves at BestBuy, At&t, Orange(France), O2(UK) etc.
There's always the possibility of phones being jailbroken, used on alternate providers and never touching the app or itunes stores. I know people who (avoiding Apple apps like the plague) have never used Mobile safari, instead have just used MyFox since they bought the phone.

The only people that sell them are Apple Stores and AT&T Stores. They know how many are sold as of yesterday.

And there's no point jailbreaking. And people avoiding mobile Safari? Why? Not like MyFox has Flash.

I hate geeks like you that think you know everything.

 

[JS82189]

The only people that sell them are Apple Stores and AT&T Stores. They know how many are sold as of yesterday.

And there's no point jailbreaking. And people avoiding mobile Safari? Why? Not like MyFox has Flash.

I hate geeks like you that think you know everything.

well u sure are acting like one.. maybe once u realize theres more than one country in the world with iPhones you can come back and make a valid post

plus people will jailbreak and use it on T-Mobile, with their $5 data plan etc.. you seriously have no idea what your saying

 

[maz94protege]

At this point, I am glad I switched to the droid. Its better than the 3Gs in pretty much every aspect except the app store.

With that said, competition is great, and I fully expect the iPhone 4G to convert me back <3 Its probably going to be amazing.

I too switched to a Droid, I went with the eris. My iphone 3G is a great ipod touch right now. If the 4G one comes out next year I may do the upgrade again to get another iPhone to add to the collection.

Apples app store does woop the Android store hands down.

 

[0092762]

Don't forget iphones tend to be sold at premium prices or with expensive monthly contract requirements all around the world. Marketshare may be down a bit but I bet nobody makes as much profit as Apple.
Also, the US is huge and offering it on Verizon would immediately boost iphone numbers.

 

[sjo]

For Apple stores, sure.
Accurate information maybe, but just for Apple stores. Apple can't really reliably tell how many units are sitting on the shelves at BestBuy, At&t, Orange(France), O2(UK) etc.

As far as I know the capability for reporting the unit sales in a timely manner has been one of the requirements of Apple for the operators it allows to carry iphone.

 

[michaellinehan]

Don't forget iphones tend to be sold at premium prices or with expensive monthly contract requirements all around the world. Marketshare may be down a bit but I bet nobody makes as much profit as Apple.

Nicely pointed out. Raw market share numbers are a profoundly stupid thing to quote, without more detailed information. Many phones are giveaway items. Another good illustration - Microsoft has about twelve times the market share of Apple, BUT is worth only about one and a half times as much. In many business sectors, there are companies that are more profitable than competitors many times larger.

Profits mean much more than market share percentages.

 

[nelsonx]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)

Absolutely, though profit by itself does not neccessarily create value to shareholders especially if you've invested billions in r&d / capital.

 

[RedTomato]

I too am starting to think about a new iPhone. I've been happy with my original 2G, (purchased here on MR) however it is nearly 3 years old.

Some UI elements have been starting to irritate me, so I jailbroke it a few months ago, which caused some new issues. (On the whole, I prefer it jailbroken, so I won't un-jailbreak it.)

If the new iPhone has a front camera, and can use 3G for webchat, I'm in there. I'd buy two - one for me and one for my partner as we want to use videochat. (without spending $1/£1/minute for mobile carrier videochat)

 

[Chupa Chupa]

I think SJ acknowledged these numbers when he said iPhone updates would be aggressive in the future. I have a feeling Apple has been holding its fire since the original iPhone shipped until real competition emerged. Now that it's here I expect Apple to come out with guns a blazin'. Yee haw.