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

[PracticalMac]

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.

That is the same argument I heard during the Mac / PC days in late 80's and early 90's.

Apple was almost bankrupt.

Apple is gaining iPhone sales because people are trying smart phones, but its loosing market share from various factors, from price, to features, and such.

It is not a good to be looking market share, is it capitalism 101.

Look at Mac today. They are gaining market share, double from its low point, and seeing more units sold Y-t-Y.

 

[Michael Scrip]

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,...).

True... there are a ton of moderately priced Android phones out there that are pretty decent.

But Apple's sales are still going up... so there is still an attraction to iOS phones.

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?

There is plenty of software and accessories available for the Mac... much more than their 5% market share would suggest.

Sure... you won't find every software package available... but it's far from a barren landscape.

There are developers who SOLELY make software for the Mac... so it must be worthwhile to them.

 

[Drew Bear]

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...

Post #90 Trapezoid responds to samcraig. They're discussing market share vs profit share. #96 enrico jumps in (interjects himself?) with his comment emphasizing how market share affects development. Trap responds in #97 arguing that developers follow profits. enrico comes back in #106 saying that Android app revenue will eventually surpass iOS app revenue and it'll be PC vs Mac all over again, with iOS app availability dwindling to Mac-like levels (insignificant?).

I disagree with enrico's conclusion, not his prediction about Android app revenue. I can see that possibly happening, though it's not guaranteed. Android's growth is from the low-end and those customers spend less on apps.

Round numbers from memory: Android 80% market share and Google pays out $5B to developers in the past 12 months. iOS 10% (?) market share and Apple pays out $10B.

80% is already dominant market share, yet developers have not begun to abandon iOS. Let's say enrico's 90% Android/5% iOS prediction comes true. Let's also imagine that developer payouts grow to Android $15B/year and iOS $14B. Why would developers walk away from all that iOS money?

I don't think anyone here has said that market share is unimportant. It's just not all-important. Other factors are in play that are significant enough to ensure that a minority market share player like Apple will remain successful and relevant in the phone market. That's especially true when that minority share represents consumers who spend the most.

 

[Michael Scrip]

That is the same argument I heard during the Mac / PC days in late 80's and early 90's.

Apple was almost bankrupt.

Apple is gaining iPhone sales because people are trying smart phones, but its loosing market share from various factors, from price, to features, and such.

It is not a good to be looking market share, is it capitalism 101.

Look at Mac today. They are gaining market share, double from its low point, and seeing more units sold Y-t-Y.

Apple almost went bankrupt because they weren't making money selling Macs.

They don't have that problem with iPhones. It's a completely different situation.

As for Capitalism 101... how much market share should Apple have?

I've already shown that Apple has increased their iPhone sales... but apparently that's not good enough.

So what would be the ideal amount of market share the iPhone needs?

 

[Trapezoid]

Apple almost went bankrupt because they weren't making money selling Macs.

They don't have that problem with iPhones. It's a completely different situation.

As for Capitalism 101... how much market share should Apple have?

I've already shown that Apple has increased their iPhone sales... but apparently that's not good enough.

So what would be the ideal amount of market share the iPhone needs?

It's a great question. I too am curious what the magic number for market share is where people will say apple is successful

 

[AppleScruff1]

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

Especially for the non stock holding consumer.

 

[tongxinshe]

Dual boot to Android or holo from iShoe?

So it will devolve into the PC situation where Mac makes all the money and everyone else fights for the scraps on teeny tiny margins and poor quality devices? Yeah that sounds pretty terrible for Apple!

Actually you are using the data after a list of changes:
1. switching to hardware which can basically run Windows
2. holo effect from the iPod domination
3. holo effect from the huge interest in developing iPhone apps

What was the situation before all of these un-repeatable one-time exceptions? The whole Mac platform was simply repeating a desperate death spiral, and was already at a point where:
1. most customers had never heard of Mac computers
2. even among the customers got interests into Mac computers, most of them DARE NOT to buy it because of “compatibility problems"
3. most developers don’t even ever think about Mac support since its market share was below 2%
4. website developers / maintainers don’t even care if Mac users cannot read their pages

When iPhone reaches the similar situation 10 years from now, what do you expect to happen to save it again like what saved Mac business? Be able to dual boot into Android? A holo effect from the iShoe?

 

[Michael Scrip]

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

Especially for the non stock holding consumer.

Hey Scruff... are you saying market share is important for the consumer?

When Apple sold 150 million iPhones last year... did those consumers know that Apple has less than 15% market share?

Of course not. Neither profits nor market share matters to the consumer.

What the8thark was talking about was for the company themselves. I would imagine a company values profit more than where they happen to fall on a market share chart.

A company can make goals about how many units they want to sell... or even how much money they want to make.

However... no company can makes goals about how much market share they'd like to have... since no one knows how many units everyone else will sell.

That's the funny thing about market share... it's a percentage of the entire market... after the quarter has already passed.

Consumers shouldn't care about any of that... they just want to buy phones.

But companies need profits... or else they won't be around to sell those phones.

You can't pay your rent with market share.

 

[ksuyen]

Actually you are using the data after a list of changes:
1. switching to hardware which can basically run Windows
2. holo effect from the iPod domination
3. holo effect from the huge interest in developing iPhone apps

What was the situation before all of these un-repeatable one-time exceptions? The whole Mac platform was simply repeating a desperate death spiral, and was already at a point where:
1. most customers had never heard of Mac computers
2. even among the customers got interests into Mac computers, most of them DARE NOT to buy it because of “compatibility problems"
3. most developers don’t even ever think about Mac support since its market share was below 2%
4. website developers / maintainers don’t even care if Mac users cannot read their pages

When iPhone reaches the similar situation 10 years from now, what do you expect to happen to save it again like what saved Mac business? Be able to dual boot into Android? A holo effect from the iShoe?

10 years is a long time for a lot of things to happen. And I think iPhone situation is not exactly the same as Mac a decade ago. To begin with, iPhone has already had massive ecosystem that a decade ago, Mac could not afford. This ecosystem which includes Apple services, iClouds, iTunes, apps, etc are what bind people to their hardware. In order to build the quality that people want in their hardware, Apple also has started to secure their own supply chains. All of these has been done since these past years step by step, slowly but deliberately, to avoid the scenario that you described.

 

[Michael Scrip]

Actually you are using the data after a list of changes:
1. switching to hardware which can basically run Windows
2. holo effect from the iPod domination
3. holo effect from the huge interest in developing iPhone apps

What was the situation before all of these un-repeatable one-time exceptions? The whole Mac platform was simply repeating a desperate death spiral, and was already at a point where:
1. most customers had never heard of Mac computers
2. even among the customers got interests into Mac computers, most of them DARE NOT to buy it because of “compatibility problems"
3. most developers don’t even ever think about Mac support since its market share was below 2%
4. website developers / maintainers don’t even care if Mac users cannot read their pages

When iPhone reaches the similar situation 10 years from now, what do you expect to happen to save it again like what saved Mac business? Be able to dual boot into Android? A holo effect from the iShoe?

I don't think the iPhone or iOS will need "saving" in 10 years.

In 10 years there could be a billion iOS devices out in the world. That would be more than enough.

There might be 2 or 3 billion Android devices out in the world too... but that's not too different than the situation today.

There are 500 million iOS devices out in the world right now... and over a billion Android devices.

But despite the fewer number of iOS devices compared to Android devices... iOS is still a strong and popular platform.

 

[bobenhaus]

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.

Yeah but from a customer standpoint profit is not a concern to us. So talking about profit is like beating a dead horse when discussing market share vs Apple. Does that sound logical?

 

[Michael Scrip]

Yeah but from a customer standpoint profit is not a concern to us.

To be honest... market share shouldn't be a concern for customers either.

So talking about profit is like beating a dead horse when discussing market share vs Apple. Does that sound logical?

And when there is an article about Apple making billions in profit... people love to mention market share.

It's a never-ending cycle.

 

[SPUY767]

I don't think the iPhone or iOS will need "saving" in 10 years.

In 10 years there could be a billion iOS devices out in the world. That would be more than enough.

There might be 2 or 3 billion Android devices out in the world too... but that's not too different than the situation today.

There are 500 million iOS devices out in the world right now... and over a billion Android devices.

But despite the fewer number of iOS devices compared to Android devices... iOS is still a strong and popular platform.

It's a game of shoveling manure, versus panning for gold. Sure, the guy with the poop has moved a lot more product, but if the guy panning for gold gets an ounce, he still comes out on top.

 

[ablackfriday]

Is it true? It seems Huawei is several times higher than Apple

 

[tongxinshe]

10 years is a long time for a lot of things to happen. And I think iPhone situation is not exactly the same as Mac a decade ago. To begin with, iPhone has already had massive ecosystem that a decade ago, Mac could not afford. This ecosystem which includes Apple services, iClouds, iTunes, apps, etc are what bind people to their hardware. In order to build the quality that people want in their hardware, Apple also has started to secure their own supply chains. All of these has been done since these past years step by step, slowly but deliberately, to avoid the scenario that you described.

Apple emphasize too much on profit margin per each unit, with the fact that the small players can get Android for free, makes iPhone very difficult to surpass an overall market share of 15%.

With that real-life market share, when the fever on the Apple brand calm down, most developers (especially the small ones and those only developing free supporting apps for their real businesses) will focus on Android versions, then over time, more and more developers will stop developing non-Android versions.

Start from that moment, the resonance between low market share and low software support level will be almost impossible to stop.

So, although profit margin is important, Apple has to maintain a safer level of market share (maybe around 20% worldwide?) to avoid that dangerous future, even if that means to sacrifice some profit margin.

 

[Renzatic]

Hmm, I meant phones but ok.

And if you're talking about smartphones, Apple saw the greatest growth and number of untils sold until about 2011, when Android started coming into its own.

 

[HiRez]

With that real-life market share, when the fever on the Apple brand calm down, most developers (especially the small ones and those only developing free supporting apps for their real businesses) will focus on Android versions, then over time, more and more developers will stop developing non-Android versions.

People have been predicting that every year, it still hasn't happened. It's still harder to make revenue on Android (customers who want free phones tend to not spend money on apps, media, subscriptions, etc.), and harder for smaller/indy developers to code and test for. The market for the 15% of people with the most money to spend can still be more lucrative than the market for the 85% of people with none to spare.

 

[subsonix]

Yeah, if the numbers can be trusted. If not, it makes for a nice discussion at least.

http://fortune.com/2014/07/28/pc-sales-estimates-how-the-sausage-gets-made/

 

[Michael Scrip]

Apple emphasize too much on profit margin per each unit, with the fact that the small players can get Android for free, makes iPhone very difficult to surpass an overall market share of 15%.

With that real-life market share, when the fever on the Apple brand calm down, most developers (especially the small ones and those only developing free supporting apps for their real businesses) will focus on Android versions, then over time, more and more developers will stop developing non-Android versions.

Start from that moment, the resonance between low market share and low software support level will be almost impossible to stop.

So, although profit margin is important, Apple has to maintain a safer level of market share (maybe around 20% worldwide?) to avoid that dangerous future, even if that means to sacrifice some profit margin.

When Android had 60% of the market... developers still favored the iPhone
When Android had 70% of the market... developers still favored the iPhone
When Android had 80% of the market... developers still favored the iPhone

The iPhone rose to a high of about 20% many years ago... when the smartphone market was small.

Now it's at 12%... with the smartphone market nearing 300 million units a quarter. (Apple is still the #2 smartphone manufacturer is this huge market)

But the point is... the iPhone NEVER had a significant market share. But look at all the apps, accessories and other things that are made for the iPhone. Weird, huh.

BTW... you know 'market share' only refers to the percentage of units sold in a quarter, right? You're completely ignoring the other big number... 'installed base'

There are estimates of over 400 million iPhones in use today... with owners who love to spend money on apps and accessories.

THAT'S why developers and accessory makers favor the iPhone... lots of users with a penchant for buying stuff.

If market share was as important as you say it is... there wouldn't have been any iOS-exclusive apps since 2010.

Instead... it happens every day.

 

[Trapezoid]

When Android had 60% of the market... developers still favored the iPhone
When Android had 70% of the market... developers still favored the iPhone
When Android had 80% of the market... developers still favored the iPhone

The iPhone rose to a high of about 20% many years ago... when the smartphone market was small.

Now it's at 12%... with the smartphone market nearing 300 million units a quarter. (Apple is still the #2 smartphone manufacturer is this huge market)

But the point is... the iPhone NEVER had a significant market share. But look at all the apps, accessories and other things that are made for the iPhone. Weird, huh.

BTW... you know 'market share' only refers to the percentage of units sold in a quarter, right? You're completely ignoring the other big number... 'installed base'

There are estimates of over 400 million iPhones in use today... with owners who love to spend money on apps and accessories.

THAT'S why developers and accessory makers favor the iPhone... lots of users with a penchant for buying stuff.

If market share was as important as you say it is... there wouldn't have been any iOS-exclusive apps since 2010.

Instead... it happens every day.

Wait till android hits 84.2%...then the developers are gonna start flocking there.

 

[jrswizzle]

And if you're talking about smartphones, Apple saw the greatest growth and number of untils sold until about 2011, when Android started coming into its own.

Moving goalposts. Point is, Apple has never been on top of marketshare numbers because they don't play the volume game. Never have, and it appears never will.

 

[Drew Bear]

BTW... you know 'market share' only refers to the percentage of units sold in a quarter, right? You're completely ignoring the other big number... 'installed base'

There are estimates of over 400 million iPhones in use today... with owners who love to spend money on apps and accessories.

THAT'S why developers and accessory makers favor the iPhone... lots of users with a penchant for buying stuff.

Exactly. Include the greater iOS family of devices and developers have even more incentive for supporting the platform.

Apple will continue to dominate the high-end markets of mobile computing devices. Android and its various forks will take care of the rest. Consumers will have plenty of choices. We should all be happy.

 

[Drew Bear]

Wait till android hits 84.2%...then the developers are gonna start flocking there.

Done! Apple will have to beg developers to come to WWDC next summer.

"Smartphones running Android accounted for 85% of global shipments in the second quarter, according to research firm Strategy Analytics, up from roughly 80% in 2013...Apple’s share fell to 11.9%, from 13.4%..."

Source WSJ. No link.

 

[Trapezoid]

Done! Apple will have to beg developers to come to WWDC next summer.


Source WSJ. No link.

I meant 94.2% wait and see

 

[Drew Bear]

So, although profit margin is important, Apple has to maintain a safer level of market share (maybe around 20% worldwide?) to avoid that dangerous future, even if that means to sacrifice some profit margin.

The iPhone possibly hit 20% global market share for 1 or 2 launch quarters, so they've been living "that dangerous future" for most of the past 7 years. I'm curious if you have ever been optimistic about Apple's future or have you always considered them on the brink of failure?

This chart only goes back to 2009. Remember that the iPhone started with 0% market share in June 2007. If you looked mainly at market share, the iPhone has always been in danger. Yet it is stronger today than it has ever been.

Source: http://static1.businessinsider.com/image/537b72f169bedd1e04384fab-1200-924/smartphoneosmarketshare.png