Apple's Share of Smartphone Market Slips as Smartphones Outsell Feature Phones for First Time

[Michael Scrip]

So, what exactly does the web traffic market share has to do with anything? Sure, iPhone is popular in US, Canada and Australia. A lot of teenagers have it here and they consume a lot of web traffic (youtube, facebook etc.) Teenagers in other countries who own mostly Android phones are a little bit more busy working for a living and have less time to waste on messaging to their friends about what they had for breakfast.

It goes back to the notion that Android phones are replacing feature phones... and being used as such.

I guess you could say that Android phones have huge market share... but Apple phones are used for more things.

It's just an interesting data point.

And you kinda glossed over the rest of my earlier comment: "developers overall are more happy with iOS... and iPhone customers are extremely satisfied."

 

[dolph0291]

Oh look! IDC made up some more numbers about Samsung smartphone shipments!!!

What a load of crap. 70M??? really? Which phone was that? Since GS3 was only selling 5M per month at its peak and the Note 2 was selling at 1M per month.

Does Samsung have some other secret phone lineup that they are selling to fairies, pixies and gnomes?

It's because what used to be called feature phones are now considered smart phones. The cost is roughly the same to make either one, with Android free and no upgrade path for cheap phones. So, why not throw Android on there and you got yourself more market share of the smart phone market?

 

[Oletros]

It goes back to the notion that Android phones are replacing feature phones... and being used as such.

Or they are used for Facebook, Whatsapp, Twitter and other apps. They don't count for web traffic

The only thing that web traffic statistics say is that iOS is used more for web surfing, nothing more

 

[dolph0291]

It goes back to the notion that Android phones are replacing feature phones... and being used as such.

I guess you could say that Android phones have huge market share... but Apple phones are used for more things.

It's just an interesting data point.

And you kinda glossed over the rest of my earlier comment: "developers overall are more happy with iOS... and iPhone customers are extremely satisfied."

So, what exactly does the web traffic market share has to do with anything? Sure, iPhone is popular in US, Canada and Australia. A lot of teenagers have it here and they consume a lot of web traffic (youtube, facebook etc.) Teenagers in other countries who own mostly Android phones are a little bit more busy working for a living and have less time to waste on messaging to their friends about what they had for breakfast.

The teenagers in my country - México - can't stop texting, not for a minute. You have your anecdote, and there's mine! I'm not sure what it has to do with anything anyway!

 

[Michael Scrip]

Please tell me how you figure cheap smartphones don't compete with the iPhone? That makes no sense. Every dollar spent on the cheap phone is a dollar not spent on the iPhone, and more importantly future revenue not generated in iTunes. Apple is in the business of making money.

I am amazed when people spout the "they're not being used for much other than phone calls and texting" line. You feel this way why? Could it be the reports that say iPhone users have the majority of web traffic or app sales? All that says is they spend more time on the web and purchase more apps. In no way does that correlate to cheaper phone users not using those features. It just says that they typically do it less than iPhone users

If you only have $100 to spend on a smartphone... you're not getting an iPhone.

I'm talking worldwide... not in the land of subsidized phones.

iPhones are sometimes priced 5 times higher than an Android phone in some countries.

That's not the kind of competition I was talking about.

But yes... every dollar spent on a cheap Android phone is a dollar not spent on the iPhone.

In the same way every dollar spent on a Kia is a dollar not spent on a Cadillac.

(not saying the iPhone is a Cadillac... just wanna make that clear)

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Or they are used for Facebook, Whatsapp, Twitter and other apps. They don't count for web traffic

The only thing that web traffic statistics say is that iOS is used more for web surfing, nothing more

Fine... take web browsing stats out of it.

Since Android has 75% smartphone market share... and the iPhone only 20%... why is the iTunes store still the largest online music store?

Are we to believe all those Android users don't like music?

 

[osaga]

At first glance it was surprising to see Apple only grew 6.6% where each other top 5 vendor grew at least 50% and the "other" category grew 37%.

But then it clicked. The premium market is saturated. The only room for growth is at the bottom, which is exactly why analysts are pushing for a cheaper iPhone.

I'm still not convinced that a cheaper iPhone would be the best move for Apple... but if they want to have growth greater than 6% year over year, that is certainly what needs to happen.

The high end market might be saturated, but it's still expanding, and it's unfortunate that Apple didn't do better than 6.6%.

The money is in premium handsets. The only reason Apple should be making low end phones is to eventually create new high end customers. I hope Apple makes the ecosystem even more sticky.

If i were an Apple exec/board member/major shareholder i would be angry that Apple hasn't moved more quickly to make a larger phone. And this meager growth should be a huge red flag.

The reason the iphone 4 and 4s has continued to sell so well, isn't because people prefer smaller cheaper phones. It's because the iphone 5 isn't a great enough leap forward to justify paying more for it. The whole thing is tragic.

 

[Oletros]

Since Android has 75% smartphone market share... and the iPhone only 20%... why is the iTunes store still the largest online music store?

Are we to believe all those Android users don't like music?

What has to do music with the OS?

There are a lot more countries with ITMS than countries where you can buy music from Amazon or Google Play.

 

[AppleScruff1]

manufactures profit is really what consumers should care about, really?????

I'm guessing that the two grinning smileys weren't a dead giveaway that my post was in jest?

 

[Bob Coxner]

I don't have an iPhone or even a feature phone. I have an old LG dumb phone and it is time to upgrade. The thing is I just can't justify $700 for an iPhone. (I buy my phones outright and go month to month. I will not sign a cell contract. Here in Canada at lest it's a fool's bargain.) Even $450 for an older model is more than I'm comfortable paying for but $300 would be something I could do. I really hope that Apple rolls out a low cost, plastic case / iPhone 4S guts model that falls in this price range. My three year old LG and iPod Touch are both on their last legs.

The 8gb Nexus 4 goes for $299 unlocked (no contract) in the US. Not sure about Canada. I do know that you can use LTE with it on some Canadian carriers. I'm happy with mine.

 

[tjl3]

iPhone 4 costed ~$180 to make when it first came out, 4s and 5 are ~$10 more sequentially. They can easily sell a 2-3 year old phone for $250 with Apple like margins with at least 35% profit.

This won't increase iPhone 5 sales (the smartphone w/ the highest margins) at all, and in fact a $250 iPhone 4 could very well eat into its sales. While they may gain customers from Android, Windows, and BB, they'll also be eating into their own iPhone 5 pool. I don't see how it would make any sense to potentially lose profit to increase market share.

Where a lower cost/price iPhone makes sense is in emerging markets where iPhone is considered too expensive an alternative. And that's where most analysts have Apple targeting this fall.

The high end market might be saturated, but it's still expanding, and it's unfortunate that Apple didn't do better than 6.6%.

The money is in premium handsets. The only reason Apple should be making low end phones is to eventually create new high end customers. I hope Apple makes the ecosystem even more sticky.

If i were an Apple exec/board member/major shareholder i would be angry that Apple hasn't moved more quickly to make a larger phone. And this meager growth should be a huge red flag.

The reason the iphone 4 and 4s has continued to sell so well, isn't because people prefer smaller cheaper phones. It's because the iphone 5 isn't a great enough leap forward to justify paying more for it. The whole thing is tragic.

But the 6.6% does not reflect the 'high end.' And without specific details from Samsung, we can't really tell how much they grew on the 'high end' market. You're right though, the profits are in premium handsets. And for people who aren't on those, cheaper handsets are a good way to overcome the barrier to entry (price).

But where Apple can also benefit in releasing a cheaper phone is to the market where iPhone 5/4S/4 are not an option for consumers. And in this market that they haven't captured, they won't be cannibalizing their flagship sales.

 

[lazard]

Fine... take web browsing stats out of it.

Since Android has 75% smartphone market share... and the iPhone only 20%... why is the iTunes store still the largest online music store?

because Apple forces you to use iTunes. Rather than having to go through the hassle of buying music from other places and then transfering it into their iTunes, they buy it straight from iTunes. Android users can buy their music anywhere and then just drag and drop into their phone.

 

[Michael Scrip]

This won't increase iPhone 5 sales (the smartphone w/ the highest margins) at all, and in fact a $250 iPhone 4 could very well eat into its sales. While they may gain customers from Android, Windows, and BB, they'll also be eating into their own iPhone 5 pool. I don't see how it would make any sense to potentially lose profit to increase market share.

Where a lower cost/price iPhone makes sense is in emerging markets where iPhone is considered too expensive an alternative. And that's where most analysts have Apple targeting this fall.

Has Apple ever offered a country-specific product before?

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because Apple forces you to use iTunes. Rather than having to go through the hassle of buying music from other places and then transfering it into their iTunes, they buy it straight from iTunes. Android users can buy their music anywhere and then just drag and drop into their phone.

Wondering how many people who buy $80 Android phones in populous yet poorer countries actually have a computer and/or home internet.

 

[the8thark]

At first glance it was surprising to see Apple only grew 6.6% where each other top 5 vendor grew at least 50% and the "other" category grew 37%.

But then it clicked. The premium market is saturated. The only room for growth is at the bottom, which is exactly why analysts are pushing for a cheaper iPhone.

I'm still not convinced that a cheaper iPhone would be the best move for Apple... but if they want to have growth greater than 6% year over year, that is certainly what needs to happen.

Does it matter if Apple only grew 6.6% in market share?
Apple have the largest chunk of the total smart phone profit share. Profits keep you in business. Not selling cheap products at near (or at equal to) cost.

 

[Michael Scrip]

Does it matter if Apple only grew 6.6% in market share?
Apple have the largest chunk of the total smart phone profit share. Profits keep you in business. Not selling cheap products at near (or at equal to) cost.

Come on... don't you know that "more market share" equals "winning" ?

 

[Millah]

Apple should reconsider the release of the iphone 5S and should go for a new redesigned iPhone 6! The iphone outer design and iOS are becoming STALE and will further affect their stock and market sales if they don't make a change soon. Better chip and camera lens is not going to fool anybody, except fanboys lol..

Yes, thats it! Stale! Instead of a nice clean rectangle, lets shape the iPhone into a hexagon. Boy, that will be "fresh" and new. Even if it doesn't make any sense whatsoever, and the current shape is a perfect form factor, lets just throw it away for something that makes even less sense, just so the snarky community can proclaim the iPhone has a FRESH shape!

There's certainly plenty of room for innovation and improvements, but CHANGING things for the sake of change is superficial and irrational. Lets be patient, shall we? And wait until real breakthroughs happen, rather than constantly changing things for the sake of keeping the attention span of an ADHD-infested tech media.

 

[tjl3]

Has Apple ever offered a country-specific product before?

That'll be the challenge. But if they are able to offer something compelling in the 5S or 6 and distinguish it from the low cost iPhone, it could pull some of their customers back to the regular iPhone.

 

[Oletros]

Has Apple ever offered a country-specific product before?

If my memory is not wrong, iPhones in China didn't had wifi

http://support.apple.com/kb/ht3893

 

[the8thark]

Come on... don't you know that "more market share" equals "winning" ?

I would not know. I'm not as qualified as this man is on the subject of "winning".

 

[ssspinball]

iPhone 4 costed ~$180 to make when it first came out, 4s and 5 are ~$10 more sequentially. They can easily sell a 2-3 year old phone for $250 with Apple like margins with at least 35% profit.

And continue providing the industry best post-sale support via Apple Stores and day-1 software updates? I think not!

 

[fr33 loader]

iPhone 4 and 4S are actually $450 and $550... not cheap by any means.

Now consider an Android phone from Micromax that sells for about $80 in India...

If android sales is purely price driven, Micromax should be on top of that list.
Serious question, how many shares of Apple do you own?

 

[FirstNTenderbit]

Has Apple ever offered a country-specific product before?

Why would a cheaper iPhone need to be country specific?

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Wondering how many people who buy $80 Android phones in populous yet poorer countries actually have a computer and/or home internet.

Poorer relative to whom, the US? If that's case, most of them actually.

 

[ssspinball]

Hardware flawless ... What about scratching cases right out the box!

The reason why I moved from an iPhone 5 to an S3 was precisely because of hardware; bigger better screen, SD card slot, removable battery, wireless charging and just nicer to hold, even if it is made of plastic!

I would call you a "spec-list shopper" but how about we try a car analogy instead?

Some people think a passenger van is clearly a better vehicle than the BMW 3 Series: So much more cargo space, ability to carry 8 people, better sight lines, can tow things, etc.

Spec lists do not necessarily mean better products! It's about which of those features are valuable to you. Also some those things you mention have significant downsides such as SD memory is terribly slow and you have to now manage two storage volumes instead of one.

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Samsung profits (which are on par with Apple now), or reports from other analysts like

Samsung's mobile division profits are not even close to on par with Apple.

 

[alfistas]

i know but they chose to do only windows phones. Things could have been different if they did a good android phone too.

My first phone was a Nokia 5110 which I got as a present for Christmas of '98. Nokia has sentimental value to me and it's a real pain to see them fade like this. They made their choices though...

 

[lucas107]

I would call you a "spec-list shopper" but how about we try a car analogy instead?

Some people think a passenger van is clearly a better vehicle than the BMW 3 Series: So much more cargo space, ability to carry 8 people, better sight lines, can tow things, etc.

Spec lists do not necessarily mean better products! It's about which of those features are valuable to you. Also some those things you mention have significant downsides such as SD memory is terribly slow and you have to now manage two storage volumes instead of one.

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Samsung's mobile division profits are not even close to on par with Apple.

I hate car analogy because if you check reliability sites you would see the bmw, Mercedes, Lexus and what not have average reliability with much more expensive parts

 

[Nale72]

The smiles were to indicate that post was in jest.

Sorry about that, but I've seen so many strange comments here that it's hard to tell when someone is sarcastic or actually believes what they write