The Smartphones Olympics. Is Apple Inc. (NASDAQ: AAPL) The Michael Phelps Of Its Industry?
The smartphone market continues to grow at a phenomenal pace. When it comes to operating system, the smartphone market is dominated by Apple Inc.’s (NASDAQ: AAPL) iPhone and Google Inc.’s (NASDAQ: GOOG) Android. In terms of devices, the smartphone market is dominated by the iPhone and Samsung.
The smartphone market was once dominated by Research In Motion Limited (NASDAQ: RIMM). However, increasing competition, product delays and lack of innovation has resulted in RIMM losing significant market share. In fact, the company has been struggling to survive and is pinning its hope on the launch of the new BlackBerry 10 operating system later this month. Even if the new operating system is well received by users, RIMM will hardly pose a challenge to Apple and Samsung. Find out more on RIMM here: http://www.wallstreetreport.net/market-scan/?symbol=RIMM
According to data released by Kantar WorldpanelComTech last month, Apple achieved its highest ever share in the 12-week period ended November 25, 2012. The company’s share for the 12-week period was 53.3%. The company’s market share was boosted by the launch of the iPhone 5, which had been one of the most awaited products in the smartphone market. Apple’s gains came at the expense of Android and Research In Motion. The Kantar data showed that RIMM’s share of sales for the 12-week period ending November 25, 2012 fell to 1.4%, down from 7% a year ago.
Dominic Sunnebo, Global Consumer Insight Director at Kantar WorldpanelComTech, said last month that Apple has reached a major milestone by passing the 50% share mark for the first time with further gains expected to be made during December.
While Apple dominates the U.S. smartphone market, the leader in Europe has been Samsung. According to data from Kantar WorldpanelComTech, Samsung’s share across the big five European nations in the 12-week period ended November 25, 2012 was 44.3%. Apple is in the second place, with a market share of 25.3%. In terms of operating systems, Android dominates the smartphone market in Europe. The Kantar WorldpanelComTech data showed that Android’s market share for the 12-week period ending November 25, 2012 was 61%, up from 51.8% a year ago.
In China, set to become the world’s biggest smartphone market, Apple is once again behind Samsung. In fact, in the third quarter, Apple’s market share by shipments was under 10%, according to data from research firm IDC. The research firm said in a report that Apple fell to 6th position in China in the third quarter. Meanwhile, Samsung retained the top spot in China in the third quarter.
While Apple’s performance in the third quarter was disappointing, the launch of the iPhone 5 in China in December should have helped the company. After getting regulatory approval, the iPhone 5 was launched in China on December 14.
Apple last month reported that it sold more than two million iPhone 5 in China, in just three days following the launch on December 14. This despite the fact that the iPhone 5 costs more in China than in other Pacific Rim countries due to a local electronics import tax.
Apple CEO Tim Cook last month said that consumer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China. Cook noted that China is a very important market for Apple and customers there cannot wait to get their hands on Apple products. In the last fiscal year, China accounted for 15% of Apple’s revenue. And with China’s smartphone market growing at a phenomenal pace, this figure is likely to go up in coming years.
Apple also launched its iPhone 5 in a number of other countries last month, including Brazil, Chile, Kuwait, Malaysia, Qatar, Russia, United Arab Emirates and Turkey.
The smartphone market is expected to continue to grow at a brisk pace in 2013. According to research firm Strategy Analytics, globally smartphone shipments will increase 27% during 2013. The research firm expects Samsung to widen its lead in the worldwide smartphone market over Apple.
Strategic Analytics forecasts Samsung to sell 290 million smartphones in 2013. This is significantly below Samsung’s own forecast of 390 million smartphones for 2013. Meanwhile, the research firm expects Apple to sell 180 million smartphones in 2013. Strategy Analytics’ prediction means that Samsung will hold 33% of the global smartphone market, while Apple will hold 21% of the smartphone market.
In order to catch up with Samsung, Apple will have to boost its sales in China. Strategy Analytics expects Apple to launch a smaller and cheaper “iPhone mini” to help counter the increased competition from Samsung and other local brands.
The increasing competition has hurt Apple shares in recent months. After hitting an all-time high of $705.07 in September 2012, Apple shares have fallen sharply. Apple will report its first-quarter results on January 24, 2013.
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