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

[JUiCEJamie]

I think most of the tech world forget that Apple only ever have 3 iPhones available for sale. Currently, the iPhone 5s, 5c and 4S.

Samsung on the other hand, having checked on their online store sell 46 phones. It's ridiculous. That's just looking at the UK website too!

Apple market share per phone is phenomenal. People need to remember this. It's incredible that they're 2nd. Much more than the 1% market share Apple originally wanted, but to do this with 3 phones on the market. Remarkable.

 

[bobenhaus]

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).

Profit matters most to Apple but not to their customers. That mindset needs to change.

 

[petsounds]

That was Apple's original vision. Not to make massive profits, but to make great products that change the world and to get those products in to the hands of as many people as possible.

Today, the company executing that vision is Samsung. Apple seems to be fixated on profit, despite being extremely financially secure already.

Well, first of all, Samsung doesn't make products that change the world. The make mediocre-to-adequate imitation products. Samsung's strategy is just firing a shotgun and hoping it gets a hit with one of their countless phones.

Apple can never compete in the low-end smartphone market. Especially not in China. They already have local competitors that are selling incredibly cheap-yet-full-featured Android phones, and selling tons of them. Same thing in the tablet market. So Apple cannot compete there. It's focus has always been to make the best product, not the cheapest product. If they made the 5c $100 or $200 cheaper for instance, there would still be another Chinese company that would clone it and sell theirs for less. You can't win on a race to the bottom.

Samsung will learn their lesson the hard way. I predict that they will eventually be squeezed on both sides -- from the mid-to-high end by Apple, and the low end by a growing dominance of Chinese companies. The number of devices Samsung sells is not sustainable after they run out of growth markets. Fighting a two-front war is never a good idea unless you have overwhelming numbers or firepower, and they have neither. They placed their bet on Android, but anyone can make an Android phone and have Android apps. Only Apple has iOS apps. That's what Tim was trying to underscore yesterday during the earnings call. The app ecosystem is a major selling point.

 

[kunai]

NO





From a wise man.

Yes, and we all know Jobs said the truth, the whole truth, and only the truth, at all times.

You're holding it wrong.

I agree with you but his opinions aren't the end-all be-all. Just because Apple is losing marketshare doesn't mean they're not innovating; look at Touch ID.

What Apple's problem is that they're refusing to give the organism what it wants. Consumers are looking for higher-resolution, larger screens, and an OS that is easy to use but lets people change at least the default applications on it.

Apple won't budge on this front; so people are looking elsewhere. This can also explain Samsung's meteoric rise in the past several years. It will fall, eventually, as another manufacturer comes along, picks up the industry, examines it, and flips it on its head again. That manufacturer could very well be Apple.

It's not reasonable to dismiss Cook anymore. He's shown he has a good handle on how things are going in the market. Do I like iOS 7? No. But do people like it? Overwhelmingly, yes. Do I care about thinness on a MacBook Pro? No. But I'm obviously in a vocal pro minority here; the majority of consumers don't care about expandability; instead, they want portability.

He knows what he's doing. Don't be quick to dismiss him like Sculley.

 

[BaldiMac]

Yes, and we all know Jobs said the truth, the whole truth, and only the truth, at all times.

The irony that you chose a quote that Steve Jobs never said to demonstrate his truthfulness is a little funny.

 

[kunai]

The irony that you chose a quote that Steve Jobs never said to demonstrate his truthfulness is a little funny.

http://www.engadget.com/2010/06/24/apple-responds-over-iphone-4-reception-issues-youre-holding-th/

 

[Nale72]

I think most of the tech world forget that Apple only ever have 3 iPhones available for sale. Currently, the iPhone 5s, 5c and 4S.

Samsung on the other hand, having checked on their online store sell 46 phones. It's ridiculous. That's just looking at the UK website too!

Apple market share per phone is phenomenal. People need to remember this. It's incredible that they're 2nd. Much more than the 1% market share Apple originally wanted, but to do this with 3 phones on the market. Remarkable.

They are still selling iPhone 4 out there. And to make more fair comparison, you might to some degree also see the different memory options on the different iPhones as different models since many of the Samsung phones only differ by a little.

But even if we for arguments sake say there are only 3 iPhone models, do you really think that if Apple released 46 models they would sell 15 x more phones? I'm pretty sure that wouldn't be the case. I believe that if Samsung would sell 23 instead of 46 models, they wouldn't sell too many less phones in total.

I believe users first choose which OS to buy; iOS, Android, Windows or other, then they choose which phone with that OS. If the selections of phones is too small, you might have to abandon your preferred OS and go to another, but in the case of iOS, most will settle with the options that you have, even though they would really prefer something other (like a bigger, or smaller screen).

If you have 10 or 50 models won't matter too much I think (depending of the spread of your models). But I'm pro choice, so the more models I have to chose from, the better for me I think. At the moment I have to do with the 3 (4) iPhone models, but wouldn't mind a couple more. I also believe that if Apple also offered a 4,5-5 inch iPhone they would take a lot of users from the current Android and/or Windows phone crowd. How many I don't know, but I'm sure they would get a bigger market share. Obviously Apple don't agree or they just don't think it's worth it.

Just my humble opinion though...

 

[CEmajr]

And yet the iPhone dominates in developer support, accessories, and peripheral devices despite having a relatively small market share.

One of the best posts in this thread.

For all that marketshare, it hasn't benefited the Android vendors in any of the ways that having a dominant marketshare typically does for an OS or company. When it comes to Android, marketshare is just a number that looks good on paper. They're not gaining anything from it at the moment.

 

[BaldiMac]

http://www.engadget.com/2010/06/24/apple-responds-over-iphone-4-reception-issues-youre-holding-th/

Exactly. That proves my point.

 

[MacLC]

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.

Which is a shame. Basic prepaid cell phones with good enough reception cost $20-30. iPod Nano costs $150. For less than $170, Apple could make money on a low end phone. Or say $270 for a basic iPod Touch size. If you CAN make money on it, and consumers WANT it, WHY NOT? Did the iPod Mini/Nano/Shuffle cannibalize iPod Classic sales? No, it increased them just as the iPhone 5C increased iPhone 5S sales.

If you don't have the user base you won't have the developers... this is mid-90's de ja vu.

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.

Yes, but Apple's iMac/iBook lines were long-supported by monopolistic market share of iPods and early iPhones. Take away the halo and you have ashes.

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

Yes, but Toyota and Honda still sell Lexus and Acura on the higher end as well as Daihatsu on the low end. Apple has pidgeon holed itself into the mid range.

 

[tongxinshe]

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.

Image

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).

Well, a same configuration Samsung S4, with the same Android OS, the double sale price, still sells twice as much in volume, just in China.

 

[slash7844]

Well, first of all, Samsung doesn't make products that change the world. The make mediocre-to-adequate imitation products. Samsung's strategy is just firing a shotgun and hoping it gets a hit with one of their countless phones.

Samsung doesn't make products that change the world? When Apple first came out with the 'Retina Display' and marketed it as "Apple's New Retina Display", guess who made those? Samsung's also working on bendable display and transparent LCDs, not to mention processors such as Exynos.

 

[tongxinshe]

What's the point of getting the device to the hands of people if the device itself sucks? The way to get 3x the sales of iPhones, android phone manufacturers are releasing crappy phones that are loaded with bloatware and are hard to use. Despite only having 1/3 of the devices out in the wild, iOS still makes up more internet usage than all android devices combined.

That's only because the "internet usage" statistics are totally focused on the United States websites. iPhones' prices are not any higher than other Android phones, so iPhone's market share in the US is much much higher, around 50%.

 

[TC03]

Profit matters most to Apple but not to their customers. That mindset needs to change.

Why?

 

[Perfect Score]

Here come the truthers on both sides (Android/Apple) trying to manipulate the numbers to their advantage.

Lies, damn lies, statistics and all that

 

[tongxinshe]

Profits do matter the most but Samsung has a different strategy. Their strategy is to flood the market with dozens of devices (maybe hundreds) at all price points and form factors. They hope to eventually totally dominate the market and control the marketshare with this strategy as they have done in other sectors such as TVs. Sell cheaper than the existing market leader by accepting much lower average margins and price them out of it. It remains to be seen if they will eventually do this to Apple. Their margins aren't touching Apple's but they're selling so many devices that their overall profit is almost as good.

To the person wondering why they don't have the supply issues that Apple has with the 5S. You have to keep in mind that those numbers from Samsung represent tons of devices. Apple usually only actively sells 3 iPhones at a time. No other smartphone has such front loaded demand like the latest iPhone model and none of the other phone manufacturer's launch their phones on the same date on all carriers in so many different countries. The materials used for Samsung phones are also cheaper and easier to manufacture.

And Samsung knows that no one copies them, so they don't hesitate to share the product schedule with the component producers far in advance.

 

[bobenhaus]

Google and other companies can survive with lower profit margins why can't apple ? Just look at costco and and a big percentage
goes back into the company and it's employees

 

[BaldiMac]

That's only because the "internet usage" statistics are totally focused on the United States websites.

Source that usage statistics only favor iPhone because of US focus?

iPhones' prices are not any higher than other Android phones, so iPhone's market share in the US is much much higher, around 50%.

US iPhone market share is around 40%, so I don't see how that helps your theory. I've never seen iPhone usage share under 50%.

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Google and other companies can survive with lower profit margins why can't apple ?

They can. They just don't want to. More work for less money sucks.

 

[gnasher729]

From a wise man.

Jobs was surely a wise man, but you are badly misquoting him out of context. He was talking about Sculley who was trying to milk the customers with overpriced computers, and it didn't work. If Apple sold iPhones for twice the price and saw its market share dropping as a result, then Jobs' quote would be appropriate. As it is, Apple is selling at excellent prices to the high-end market, something that Jobs did himself and would be fully agreeing with.

 

[kdarling]

I think most of the tech world forget that Apple only ever have 3 iPhones available for sale. Currently, the iPhone 5s, 5c and 4S.

Samsung on the other hand, having checked on their online store sell 46 phones. It's ridiculous. That's just looking at the UK website too!

Nothing wrong with having more price and feature choices. Heck, remember back when many fans declared that Apple only needed one model? Then it was two. Now it's three model names. Who knows what the future holds

Even now, Apple does not sell just 3 iPhones. For the 5S, 5C and 5 alone, there are 15 factory radio models to work with various carriers around the world, each in multiple colors and memory sizes. They just don't label them differently like Samsung often does.

Apple market share per phone is phenomenal. People need to remember this. It's incredible that they're 2nd. Much more than the 1% market share Apple originally wanted, but to do this with 3 phones on the market. Remarkable.

Apple didn't want only 1%. That's just all they initially thought they could get. It's Apple SOP to predict less, so more looks better. Smart.

This argument is so tired because both sides take extreme views. The difference between shipments and sales is not as big a deal as some make it out to be, but it's not insignificant. Take the difference between Gartner's estimates (end user sales) and IDC estimates (shipments) for 2012.

Gartner 2012 Android Smartphone End User Sales: 446.8 million
IDC 2012 Android Smartphone Shipments: 493.4 million

Assuming both estimates are in the same ballpark, that implies that almost 10% of Android shipments in 2012 were not sold to end users.

Another good example is just the other day when Apple reported sales of 33.8 million iPhones for F4Q2013.

Checking the earnings transcript though, the inventory channel also increased by 3.3 million devices, meaning about 10% of the shipments were not sold to end users.

 

[gnasher729]

Samsung doesn't make products that change the world? When Apple first came out with the 'Retina Display' and marketed it as "Apple's New Retina Display", guess who made those? Samsung's also working on bendable display and transparent LCDs, not to mention processors such as Exynos.

Samsung makes some parts of Apple products that change the world.

 

[KdParker]

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

I would think this is related to having more models available with a wider price range. I can't wait for the next significant leap forward in smart phones and I still believe Apple will get there first but you never know.

 

[petsounds]

Samsung doesn't make products that change the world? When Apple first came out with the 'Retina Display' and marketed it as "Apple's New Retina Display", guess who made those? Samsung's also working on bendable display and transparent LCDs, not to mention processors such as Exynos.

Those are technologies. To change the world with a product, you have to synthesize a new product from new or existing parts in a way no one has thought of or were able to before, and package it in a way that the common person will understand, embrace, and desire. Samsung does not do this, Apple does.

For instance, touchscreen interfaces have existed for years. But most of them sucked. I don't just mean the technology, I mean the way the user relates to and understands it. Providing an interface that anyone can understand, integrating it with software so that it all makes sense, in a smartphone -- that was revolutionary. That's what Apple does. Samsung makes interesting technologies, which is fine and cool and we need those companies in the world, but they do not go out and change the world.

This is what Jobs was always on about with the "intersection of technology and the humanities" bit. To provide an experience to users that seems natural requires studying humanity, art, the way we relate to things and others, and what we desire. The user's experience with the thing is of paramount importance. Samsung makes interesting tech, slaps it in a phone, and says, "Here you go, enjoy your bendable LCD nanomatrix." Now I'm not saying Apple always gets it right, but they strive to. And when they do get it right with the big things, yes, they change the world.

 

[KdParker]

Well, if you want to measure the market share you have to count all the phones. No company having the same number is irrelevant for that figure.

if you are looking at overall market share...then sure. Apple is targeting one market demographic (high end smart phones) while Samsung targets more demographics.

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2Q

Image


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

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

Look at Window Phone ....sneaking up on the competition.

I am not surprised, I still think that in the battle of the OS's it is

1) iOS
2) Windows8
3) Android.

Wonder where we will be in 5 years?

 

[Oletros]

if you are looking at overall market share...then sure. Apple is targeting one market demographic (high end smart phones) while Samsung targets more demographics.

Is the 4S today an high end smartphone?

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I am not surprised, I still think that in the battle of the OS's it is

1) iOS
2) Windows8
3) Android.

I have not understood very well that. Are you saying that iOS and Windows 8 will have more market share than Android?