Apple's Smartphone Market Share Slips as Huawei, Lenovo Make Gains

[anek007]

It's a nice theory to repeat, but it's not supported by history as you claim. Do you see evidence of the high end of the smartphone market disappearing? Any other major tech market?

Seems to me that the high end continues to be redefined as commodity tech catches up to the high end.

CDs, tapes, CDs, Digital.
B&W, Color, Size, Quality, high def, 3D, smart, 4K.
VCR, DVD, Blu Ray.

Growth of the low end of the market does not necessarily come at the expense of the high end. There is certainly no evidence that it does in the smartphone market.

Price is a big factor in market share. For apple to compete they would need to lower the price. Companies like Huawei or Xiaomi are growing fast because they have high end spec phones at affordable prices. Prices from different parts of the world ranges from $800-$1200 for an iPhone. These up and coming asian company phones are selling at $200-400 with high end specs. Look at the prices of 4k TVs or Bluray, when they were first introduced they were expensive but now they are much cheaper.

 

[Toltepeceno]

Shouldn't the title be "Samsung's Smartphone Market Share Slips as Huawei, Lenovo Make Gains" ?

Samsung AND apple slipped in market share. It should probably say both, but this IS a mac/apple forum.

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well, many of them are "like motorola" since some time.

I laughed out loud on that one.

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They said the same thing about Samsung a few years ago. I thought for the longest time that Samsung was Chinese or Japanese. We always tend to take competition lightly before it's too late. Samsung came out of no where to become the largest phone OEM today. So don't underestimate the competition.

Well, on other products samsung was beginning to come in steady in the 70's. I thought what's with these disposable tv's. I found one in the garbage, looked brand new but had a bad tube. Thought I would fix it but the tube cost more than the tv.

 

[Drew Bear]

No one is saying that the moto. G is better than the 5s, the moto. X takes that mantle.. However what we are.saying that the.gap is very small, and.for.a handset that is a quarter.of the.price that is ridiculous.. So for someone to suggest that it will take 10yrs. For.budget phones to catch up with premium.price ones is a.joke.. Its happening as we speak..

I agree the gap between "budget" and high-end phones is small and will get smaller. I do not dispute that. What I said is that it doesn't matter. I repeat: It. Does. NOT. Matter. There will always be a high-end phone market. There are always people willing to pay premium prices for premium products.

You and billions of others can't or won't pay more for an iPhone, but hundreds of millions will. That is more than enough people for Apple to continue to basically print money and keep building computers, tablets, phones and whatever else they want.

 

[kdarling]

What are you talking about? Both IDC and Gartner reported losses for Apple in the US PC market last quarter.

That loss was year over year.

I was talking about the US quarter previous to the one the article was about.

Between that one (F2Q14) and the one (F3Q14) in the article, IDC showed a double-digit US sales increase, which is what CFO Luca Maestri was apparently talking about.

There always seems to be a strong market for high-end brands that deliver quality. I agree that, in the long run, these brands won't be over-all market-share leaders. But it looks like long-term profitability is achievable.

Yep. At the same time, the other poster is right that electronics almost always fall in price over time.

So, as with VCRs, microwaves, DVD players, etc... the masses will expect good quality at ever lower prices, up to a point.

 

[enricopalazzo]

If you're saying better applications because developers start noticing the marketshare, the same can be said about profits. Developers have consistently said they get more revenue from the app store than the play store.

You got me wrong. I said google play is already catching up to iOS appstore in revenue and they will overtake the appstore in revenue sooner or later.

At the moment there are lot of high quality Apps from developers for iOS only or coming first for iOS, because iOS is more profitable, but when Google Play+Amazon Appstore become more profitable this could change.

I don't say Apple is doomed and going bankrupt, but there is definitely a correlation between revenue, marketshare, software availability.

If iOS marketshare ends up like MacOS marketshare, the software availability might end up the same.

 

[BaldiMac]

Price is a big factor in market share. For apple to compete they would need to lower the price. Companies like Huawei or Xiaomi are growing fast because they have high end spec phones at affordable prices. Prices from different parts of the world ranges from $800-$1200 for an iPhone. These up and coming asian company phones are selling at $200-400 with high end specs. Look at the prices of 4k TVs or Bluray, when they were first introduced they were expensive but now they are much cheaper.

Price is absolutely a factor in building market share. I'm not sure what that has to do with my point. The high end can continue to grow in units even as it continues to lose market share to the low end.

That loss was year over year.

I was talking about the US quarter previous to the one the article was about.

Between that one (F2Q14) and the one (F3Q14) in the article, IDC showed a double-digit US sales increase, which is what CFO Luca Maestri was apparently talking about.

Apparently? According to what? Mac units grew 18% globally year over year. That was what he was talking about. Quarterly growth was only around 5%.

 

[Dmunjal]

I agree the gap between "budget" and high-end phones is small and will get smaller. I do not dispute that. What I said is that it doesn't matter. I repeat: It. Does. NOT. Matter. There will always be a high-end phone market. There are always people willing to pay premium prices for premium products.

You and billions of others can't or won't pay more for an iPhone, but hundreds of millions will. That is more than enough people for Apple to continue to basically print money and keep building computers, tablets, phones and whatever else they want.

Not me. I've bought a new iphone every year the day it was announced. No longer. I'm on a non-subsidized plan now and wait a while and buy on the secondary market. My year old phone also doesn't seem as ancient anymore as the new phone offers less and less value.

 

[Drew Bear]

In one or two years it might 90% Android, 5% IOS and 5% WinPhone.

So what? iOS could have 1% market share. If the market is 4 billion phones, that's 400M phones generating more than $200 Billion in revenue. Apple, the market share "loser", will laugh their way to the bank.

*Edit: Bad math on my part. Point still holds that the market share laggard still leads in profits.

but 1% actually works to 40M phones and $20B revenue. ;-)

Others have already pointed this out, but it's worth repeating. The Mac "lost" the PC wars. But despite ~5% market share, Apple's Mac sales continue to grow and remain highly profitable.

The fact is that Microsoft's Windows revenue is now less than Apple's Mac revenue. Both those companies "won". The real losers are HP, Dell and the many PC hardware makers that are no longer in business.

 

[TheHateMachine]

So what? iOS could have 1% market share. If the market is 4 billion phones, that's 400M phones generating more than $200 Billion in revenue. Apple, the market share "loser", will laugh their way to the bank.

Others have already pointed this out, but it's worth repeating. The Mac "lost" the PC wars. But despite ~5% market share, Apple's Mac sales continue to grow and remain highly profitable.

The fact is that Microsoft's Windows revenue is now less than Apple's Mac revenue. Both those companies "won". The real losers are HP, Dell and the many PC hardware makers that are no longer in business.

Instead of cherry picking one sentence out of his post, why don't you read the entire thing and try to comprehend why he said that and how it fits into his statement. You could also look at the post he was replying to.

 

[Drew Bear]

If iOS marketshare ends up like MacOS marketshare, the software availability might end up the same.

First of all, the OS X software ecosystem is very healthy despite being much smaller than the Windows ecosystem. Apple's new Swift programming language along with the various connections to iOS will only strengthen the Mac app store.

The iOS app ecosystem is nothing like OS X's. It is already so massive that it doesn't matter if Android app revenue eventually surpass it. There is no chance developers are going to abandon a platform that is generating that much money.

 

[Drew Bear]

Instead of cherry picking one sentence out of his post, why don't you read the entire thing and try to comprehend why he said that and how it fits into his statement. You could also look at the post he was replying to.

I have been following the discussion with various posters here and responded to a number of relevant points. It would get very long if I had to quote the entire thread and reply to every part of each post.

enrico's two posts (I re-read them) argue the same thing: shrinking iOS market share will eventually lead to a decline in iOS app availability. It's the same overemphasis on market share. I disagree and made my points.

Perhaps you should go back and read what I've already posted in this thread. Feel free to "cherry pick" anything you want and respond. I'm sure the folks at Macrumors will appreciate the continued traffic.

 

[jlabute]

sorry...

So what? iOS could have 1% market share. If the market is 4 billion phones, that's 400M phones generating more than $200 Billion in revenue. Apple, the market share "loser", will laugh their way to the bank.

Others have already pointed this out, but it's worth repeating. The Mac "lost" the PC wars. But despite ~5% market share, Apple's Mac sales continue to grow and remain highly profitable.

The fact is that Microsoft's Windows revenue is now less than Apple's Mac revenue. Both those companies "won". The real losers are HP, Dell and the many PC hardware makers that are no longer in business.

but 1% actually works to 40M phones and $20B revenue - manufacturing costs&parts& R&D, wages etc. = $10 profit ;-)

 

[Drew Bear]

but 1% actually works to 40M phones and $20B revenue - manufacturing costs&parts& R&D, wages etc. = $10 profit ;-)

Thanks for catching my mistake. They're on their way to selling 170-180M iPhones this fiscal year, so I guess Apple better not let iPhone sales drop to 40M. Not very likely since they sold over 50M iPhones last December quarter and are likely to sell >60M this December quarter.

 

[Moopy Sac]

Lots of people should be saying this. Profits > market share always.

Steve Jobs seems to disagree.

 

[Michael Scrip]

Why do people have to bring up profits when it has nothing to do with customers?? The only people who should be concerned about Apple's profits are Apple themselves and stock holders.

A surplus of profits might not matter to the customer... but LACK of profits sure does.

Think of all the Palm customers who were affected when Palm made NO profit and they were forced to put themselves up for sale. They were "rescued" by HP... but HP eventually scuttled the whole thing.

The result? No more Palm.

That wouldn't have happened if Palm had made a profit.

Motorola also has not been profitable... that's why they've changed ownership twice in the last few years.

Motorola was once an independent company. Then Google bought them. Then Lenovo bought them.

Again... that doesn't happen if a company makes profits.

As someone else said... profits allow a company to keep making great products for a long time.

Without profits... the company gets sold off to someone else.

 

[Moopy Sac]

Funny how just about every other news outlet has started their news on this data with how Samsung lost a whopping 7% of the total market, but Macrumors starts out their article with how Apple lost 1% of the total market...

1) This is MACrumors and, for a more accurate picture of the situation;

2) Samsung market share is down 22%; and

3) Apple market share is down 8.5%.

 

[kodos]

Conversely - I have no issues with my S4. The screen is fantastic and I experience no lag. The camera on it is pretty fantastic and I was able to shoot a ton of pictures this past week at a nightclub that came out nicely without a flash where my colleagues with iPhones pictures were dark and/or extremely grainy.

I also have several friends who have iPhones and plenty of issues with lag, crashing apps, lock ups, issues with iCloud, etc.

My point isn't to pit one company against the other. The point of my post is that individual use cases are just that.

No, the phone is really cheaply made - hold an iPhone and an S4. They are really not in the same league at all. It feels really, spectacularly terrible in comparison.

Maybe it is my relative lack of time with the S4, but I cannot shoot a low light shot worthy of anything. The 5S on the other hand was really snappy in low light (really, almost any light). My Lumia 1520, while I love a lot about the camera system (20MP, manual controls, high ISO, OIS) is really laggy in low light in comparison to the iPhone.

And yes, the Android user interface is terribly laggy. Though, the bright side is that it has a real file manager which is great for a developer like me. iOS is a pain to develop on when it comes to the file system.

If you like overboosted contrast - then the S4 is for you. I much prefer the Lumia and then iPhone screens. And it is pretty bad in direct sunlight, with all sorts of weird interreflectivity that I don't get on the other phones. It also turns slightly yellowish, and the white balance is pretty off in comparison.

Now, I can honestly say since I don't know anyone else with an S4, it might be my particular copy. But the copy I do have is awful. And the stupid "you have to install an update" nonsense that won't leave me alone each day because I have more important things to do than look at that dialog box in my face. Augh! It's like they took the worst parts of Windows XP and made a phone around it.

 

[samcraig]

No, the phone is really cheaply made - hold an iPhone and an S4. They are really not in the same league at all. It feels really, spectacularly terrible in comparison.

Maybe it is my relative lack of time with the S4, but I cannot shoot a low light shot worthy of anything. The 5S on the other hand was really snappy in low light (really, almost any light). My Lumia 1520, while I love a lot about the camera system (20MP, manual controls, high ISO, OIS) is really laggy in low light in comparison to the iPhone.

And yes, the Android user interface is terribly laggy. Though, the bright side is that it has a real file manager which is great for a developer like me. iOS is a pain to develop on when it comes to the file system.

If you like overboosted contrast - then the S4 is for you. I much prefer the Lumia and then iPhone screens. And it is pretty bad in direct sunlight, with all sorts of weird interreflectivity that I don't get on the other phones. It also turns slightly yellowish, and the white balance is pretty off in comparison.

Now, I can honestly say since I don't know anyone else with an S4, it might be my particular copy. But the copy I do have is awful. And the stupid "you have to install an update" nonsense that won't leave me alone each day because I have more important things to do than look at that dialog box in my face. Augh! It's like they took the worst parts of Windows XP and made a phone around it.

Funny - I don't get those alerts. But thanks for proving my point - you have one use case. I have another. Both valid.

 

[Michael Scrip]

Software availability... Android is already at 80%-85% world wide market share, Windows Phone at 5%. In one or two years it might 90% Android, 5% IOS and 5% WinPhone.
The Google Playstore is already catching up in revenue and will overtake Apple sooner or later + Android has third-party Appstores like Amazon.
By time it will be more attractive for professional software developers to develop for Android.

The iPhone has NEVER had a majority of market share... yet their app store is the most robust.

It doesn't seem to matter what Apple's market share happens to be... Apple still has a great platform that attracts developers.

Android has been #1 for many years... and the iPhone a distant #2... yet developers still focus on the iPhone.

So it's not gonna matter if Android is 80% or 90%... it looks like the iPhone will still be the preferred platform.

BTW... you know market share is a percentage based on the size of the entire market, right? Some people seem to forget that.

The iPhone's market share percentage went down YOY last quarter... but actual sales went up.

So if iPhones generate a lot of revenue for developers... and they sold more iPhones this quarter than a year ago... that would mean more revenue for developers despite the drop in market share.

Sometimes it's better to look at absolute numbers rather than percentages.

 

[TheHateMachine]

I have been following the discussion with various posters here and responded to a number of relevant points. It would get very long if I had to quote the entire thread and reply to every part of each post.

His post was about shrinking market share affecting software development, you replied with the same old tired tune profit. He wasn't even talking about profit. You decided to interject yourself into their discussion and replied to one sentence about something completely unrelated to his point and ignored the rest of his post.

enrico's two posts (I re-read them) argue the same thing: shrinking iOS market share will eventually lead to a decline in iOS app availability. It's the same overemphasis on market share. I disagree and made my points.

And yet, in the post I replied to where you initially replied to enrico had nothing of the sort. You just blathered on about profit Apple makes instead of countering anything about his software prediction. Only after I called you out on it you made a proper reply, albeit with little substance.

Perhaps you should go back and read what I've already posted in this thread. Feel free to "cherry pick" anything you want and respond. I'm sure the folks at Macrumors will appreciate the continued traffic.

I don't need to reread your posts prior as they were never in the conversation chain that Enrico was having with Trapezoid and therefore do not matter. If you are going to get all defensive at least make sure you read the entire discussion chain.

 

[Dmunjal]

A surplus of profits might not matter to the customer... but LACK of profits sure does.

Think of all the Palm customers who were affected when Palm made NO profit and they were forced to put themselves up for sale. They were "rescued" by HP... but HP eventually scuttled the whole thing.

The result? No more Palm.

That wouldn't have happened if Palm had made a profit.

Motorola also has not been profitable... that's why they've changed ownership twice in the last few years.

Motorola was once an independent company. Then Google bought them. Then Lenovo bought them.

Again... that doesn't happen if a company makes profits.

As someone else said... profits allow a company to keep making great products for a long time.

Without profits... the company gets sold off to someone else.

BlackBerry is profitable but has lost so much share that they are close to irrelevant. Can they keep chugging along?

 

[Michael Scrip]

BlackBerry is profitable but has lost so much share that they are close to irrelevant. Can they keep chugging along?

Of course.

As long as a company is profitable... and making money... money that is used to pay for things to keep the business going... sure.

Money makes the world go around... not share.

Like I said before... look at the Mac. It's NEVER had a big share. But while the rest of the PC industry is freefalling... the Mac is thriving.

All with just 5% of the market.

 

[PracticalMac]

And so Apples market share keeps slipping....

 

[Michael Scrip]

And so Apples market share keeps slipping....

That's because market share is a percentage based on the size of the entire market at any given time.

Yes... Apple slipped from 13% to 12% YOY... but did you also notice that the market grew by 55 million units?

Apple's sales have actually increased by almost 4 million units YOY. I don't know what else you want them to do.

Now look at Samsung... they dropped from 32% to 25%... AND they sold 3 million fewer units.

It seems like Samsung is the poorest performer on that chart... yet you felt the need to rag on Apple.

 

[enricopalazzo]

BTW... you know market share is a percentage based on the size of the entire market, right? Some people seem to forget that.

The iPhone's market share percentage went down YOY last quarter... but actual sales went up.

Thats means the iPhone sales did not increase at the same rate as the overall smartphone market did. It could be because of lowbudget-customers, but may also be due former iphone users or possible iphone customers moving to android, because high-end phones are also available for 250-400€ (Nexus5, OnePlus One, Xiaomi mi4, Oppo Find 7,...).

So if iPhones generate a lot of revenue for developers... and they sold more iPhones this quarter than a year ago... that would mean more revenue for developers despite the drop in market share.

Sometimes it's better to look at absolute numbers rather than percentages.

Does MacOSX not generate a lot of revenue to attract developers? I have Macbook pro, but still have to run bootcamp, cause Autodesk Inventor, AutoCAD and serveral external Plugins for Excel not working on MacOS. Where are all those Games that are available on Windows? Why is it easier to find small freesoft for Windows, while i have to search hours for equal soft on mac?