Originally Posted by Frood
The category to watch is 'other'
Samsung and Apple have more or less divvied up the existing market. Mostly the rich areas of the world. All the rich peeps have their phones now and growth is growing considerably.
Samsung also took the time to deliver smartphones to the low end of the market and pretty much dominated that with little competition.
That is the market that is expanding and has the future growth (despite low margins).
Both Apple and Samsung are likely to get a beating in market share numbers this year. Apple chose not to release a product that will compete in the segment, and Samsung for the first time is going to counter serious competition. China is by far the biggest market with the most growth and the homefield teams of Huawei and Lenova are likely to just keep cleaning house.
This is pretty much right on the ball. There's two cycles the Wall St. people tend to ignore:
Carrier Upgrade cycle (2 yrs) vs Device Lifetime (7 years)
Consumer pocket depth
This is the lifetime of an iPhone:
Year 1: Original Owner
Year 2: Hand-me-down or sold to a friend
Year 3: unlocked and hocked on eBay
Year 4: Likely kept around as the Kids phone/iPod replacement/backup
Year 7: Recycled or thrown out.
Where as a Samsung phone:
Year 1: Original owner
Year 2: Original owner/Kids phone.
Year 3: Recycled or landfilled.
The cheap feature-phone replacements that are Android devices are usually not attached to Data plans, and only use WiFi, if the user is competent enough to setup WiFi. Most of these free chinese-brand phones will likely just be prepaid/burner/MVNO phones in the US and Europe. That is the "Other" in the image above.
People who want to stay cutting edge will replace their phone every 18 months on the dot. Carriers will only subsidize a phone if it's within the last 6 months of their contract. Wealthy people will replace their device whenever it's convenient to, contract or not. Everyone else in North America can't afford to replace their 1000$ smartphone every year, and are usually SOL for two years if they break the device on the first day. This is why 3 year contracts were something of a Joke in Canada, because even if you could get an iPhone or a Samsung S series, it was obsolete before the contract was up. US carriers never used to even subsidize smartphones (unless you worked for Microsoft.)
Like I'd be surprised if in 5 years that Samsung still has it's lead. Apple isn't concerned about making cheap devices, because those would be poor products nobody wants, just look at how well the 5c" did. Apple would have to seriously cripple the device to make it affordable. Samsung has more leverage in doing this since it owns more of the production line for their devices.