Apple loses smartphone market share as Chinese vendors gain in Q3 - Gartner

Posted:
in iPhone edited January 2014
Apple's iPhone shipments increased by 23 percent over the same period last year, but the company's share of the worldwide smartphone market still slipped as competition, particularly from China, grew at a faster rate, according to a new industry report.

Gartner Q3 research


More than 30 million iPhones made their way into consumers' hands last quarter, but a massive leap in the overall size of the smartphone market --?some 46 percent, or almost 80 million units -- diluted Apple's share from 14.3 percent a year ago to 12.1 percent today, according to new research from Gartner. Chinese vendor Lenovo was the primary beneficiary of Apple's decline, booking a rocket-like 85 percent market share increase.

Samsung remained the market leader, coming in flat with the same 32.1-percent share it clocked last year.

The figures include just one week of sales for Apple's new flagship iPhone 5s and mid-range iPhone 5c, which debuted at the tail end of the quarter. The handsets' "impact could have been greater" if they had shipped earlier in the reporting period, said Gartner principal research analyst Anshul Gupta.

The Asia-Pacfic region continues to post huge increases in smartphone sales as consumers increasingly abandon feature phones for low-end smartphones.

"Sales of feature phones continued to decline," Gupta said, adding that buyers in developing economies like China and Latin America "rushed to replace their old models with smartphones."

Asia's rise has been a major contributor to the dramatic share increases for local players. China accounted for nearly half of the Android devices sold during the quarter, and nine of the top ten Android vendors in the country are Chinese.
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Comments

  • Reply 1 of 59
    nhtnht Posts: 4,522member
    It would have been useful to have shown Apple's share of the total mobile phone market as well.

    I would assume that the total mobile market is not growing as rapidly as just the smartphone segment and most of this is dumb phone to smartphone transition.
  • Reply 2 of 59
    Gartner also feels Windows Phone will be the Number 2 smartphone by 2015, and continues to tout its amazing market growth.

    I just don't trust their numbers, given that most of their research is polling their paying CTO Members (who for the most part, grew out of the mainframe to windows conversion). Gene Munster has better numbers than that.
  • Reply 3 of 59
    nhtnht Posts: 4,522member

    Okay, tech crunch provides a much better article:

     

    Quote:


    Overall, there were 455.6 million mobile phones sold in Q3, up 5.7%, and smartphones are very much fuelling growth these days. Devices based on Android, iOS, Window Phone, BlackBerry and so on accounted for 250 million handsets, or 55% of the total. In comparison, last year’s 171 million smartphone sales in Q3 worked out to a share of just under 40% of the total.


     

    http://techcrunch.com/2013/11/14/gartner-456m-phones-sold-in-q3-55-smartphone-android-at-82-share-samsung-a-flat-leader/

     

    So really, while Apple lost smartphone share it gained overall market share in the total mobile market:

     

     

    Apple moved from 5.7% of the total market to 6.7% of the total market.  The best 6.7% of the market to boot in terms of profitability.

  • Reply 4 of 59
    jungmarkjungmark Posts: 6,918member
    Shocker: one company's market share can't grow as fast as 10+ companies combined.
  • Reply 5 of 59

    I'm waiting for DED to spin this story a little <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 6 of 59
    Quote:

    Originally Posted by sog35 View Post

     

    Meaning there are 3-5 year old iPhones that are still in use while most Android phones are toast after 2 years or less.  I'll gander the install base is closer to 25-30%


     

     

    I suspect two reasons why all of those old iPhones are still in use while Android devices are (in your words) toast after 2 years or less.

     

    1. iPhones are expensive and people cannot afford to replace them as often. Android devices are relatively cheap and therefore easier to replace. 

     

    2. iPhone users in general are not the most technically literate folks. They don't care about processor speed, megapixels, etc and therefore have little incentive to upgrade. 

     

    I think the fact of the matter is that, just like PCs, electronics are commoditized and Android devices typically reflect this. An iPhone is often seen as a "status symbol" and that is often while older and relatively obsolete devices are still worth money.

  • Reply 7 of 59
    Not sure why AI obsesses over "share," as if the smartphone market was a zero-sum game. It's not. The iPhone market continues to grow. AI writers file endless articles over every percentage point gained or lost like they were calling plays at a football game.
  • Reply 8 of 59
    jungmarkjungmark Posts: 6,918member

    I suspect two reasons why all of those old iPhones are still in use while Android devices are (in your words) toast after 2 years or less.

    1. iPhones are expensive and people cannot afford to replace them as often. Android devices are relatively cheap and therefore easier to replace. 

    2. iPhone users in general are not the most technically literate folks. They don't care about processor speed, megapixels, etc and therefore have little incentive to upgrade. 

    I think the fact of the matter is that, just like PCs, electronics are commoditized and Android devices typically reflect this. An iPhone is often seen as a "status symbol" and that is often while older and relatively obsolete devices are still worth money.

    Perhaps you forget that Apple supports 2-3 y.o. phones with OS updates so they won't become obsolete whereas with Android , you'd be lucky to get an update.
  • Reply 9 of 59

    No, the Apple products just plain continue to work. I am a developer and we have users still using their iPad 1 just fine.  This isn't just a game or some stupid app, but one used in live performance/mission critical applications.  There's no reason to upgrade if it just plain works (and that sucker is built like a tank).  Apple releases regular iOS updates that 95% of devices can install which means they can continue to use the same apps.  In the meantime, most of Android devices run some old version of the OS and can't be targeted by modern apps.  It's just cheaper to throw them away and get something new, but these analysts keep retaining those as "marketshare" even though they are probably not used.

     

    Take a look at user engagement on iOS versus Android. You'll see that in nearly every metric, people use their iOS devices MORE than Android. Why? Because Android is for people that just need a phone and watch Netflix.

     

    Please do not say "most Apple users are not technologically inclined".  We are very technically inclined folks. Let's see, videographers, photographers, musicians, programmers, researchers, etc. Android is mostly used by:

     

    a) People that don't have money for an iPhone.

    b) People that don't really use a phone but to make calls.

    c) The dust bunnies in my computer junk drawer.

     

    From my experience as an app developer, Android users are either a) not technically inclined at all and don't use there device or b) neck beards salivating over how fast their Android phone is and that they just rooted and over clocked the processor. Little do they know it looks fast because the OEMs trick their precious benchmark tests to make them feel more manly.

  • Reply 10 of 59
    normmnormm Posts: 653member
    Quote:
    Originally Posted by nht View Post



    It would have been useful to have shown Apple's share of the total mobile phone market as well.



    I would assume that the total mobile market is not growing as rapidly as just the smartphone segment and most of this is dumb phone to smartphone transition.

    The comScore mobiLens US data is available online, up to September of this year.  According to them the total US mobile phone market has been almost constant for the past few years, and the iPhone share of all cell phones (not just smartphones) in use in the US, as of September, is 25.1%.  That's up from 17.5% a year ago, and 10.2% two years ago.  Since almost all cell phones in the US will be smartphones very soon, this business of comparing growth to the "smartphone" market (rather than just the mobile market) will have to end soon, which will be very good for Apple.

  • Reply 11 of 59
    Quote:

    Originally Posted by jkichline View Post

    Android is mostly used by:

     

    a) People that don't have money for an iPhone.

    b) People that don't really use a phone but to make calls.


    You are right! But you know what the problem is? Those "people" are probably 90% of the Earth population!

  • Reply 12 of 59
    tzeshantzeshan Posts: 2,351member

    It is completely wrong to say Apple loses to competition.  Can you say Toyota is BMW competition?

  • Reply 13 of 59
    slurpyslurpy Posts: 5,352member
    I like how Apple's shipment increased by almost 25% YoY (a huge increase, seeing as how many they already sell) yet the headline of course is "loses marketshare" something that is alot less relevant than the increase.
  • Reply 14 of 59
    As we all know, the analysis has defined Apple market as all people buying a cell phone. If you ask Apple who their market is, they have a completely different view of this. The analysis are attempting to cut the data in various ways to tell a story. Even they can not cut it how Apple defines its market.

    I think most people would agree Apple is not trying to sell a phone to every person looking to buy a phone. They are only interested in the people with the willingness to part with their money and pay Apple's price as well continue to part with money to buy all the extra's like apps, music, videos, computers to go along with their iOS devices and the list goes on. Apple could care less about people who are only looking to see how cheap they can get something.

    There is no way for analysis to figure out if Apple got 100% of those with money spending it on Apple products. It is just easier to say Apples market it everyone buying a phone.

    The Stat I would like to see is how many Apple products are still being used 2 and 3 yrs later verses the competition. I suspect that most of the Android sales are replacing a phone which does not work anymore, so it been recycled and removed from the market. Imagine how many cars would be sold every year if they were crushed and recycle ever year verses being handed down or resold. I believe most of Samsung's business is going to the same people replacing a Samsung phone which is no longer usable.

    There is whole industries which survive on the mere fact of obsolescence. M$ and Intel did for almost 15 yrs, the Auto industry in the US tried in in the 60's and 70" until Toyota came along and changed the game. We again have cars which last easily 10 yrs and do not fall apart as we drive down the road. Google and the Android partner have adopted this obsolescence business model as a way to keep generating sales.
  • Reply 15 of 59
    Quote:

    Originally Posted by sog35 View Post

     

    Damn.

     

    I'm going to invest in Others Inc.  They are killing the smartphone and tablet markets.


    <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 16 of 59
    crowleycrowley Posts: 10,153member

    At this rate Apple will have 0% market share in 6 years!

     

    Of course, at this rate smartphone sales will hit 2.4 billion/year in 6 years, but let's not let the obvious pitfalls of putting down a single stable and mature product in an unsustainably booming industry interrupt the headlines.

  • Reply 17 of 59
    lkrupplkrupp Posts: 9,991member

    Well, it’s all over except for the crying.

  • Reply 18 of 59
    Apple can discount iPhone 5s for $99 without contract . And use its cash reserve to subsidy . Then bye bye Lenovo ..
  • Reply 19 of 59

    Oh I agree. There's money to be made just in share volumes... but as we've seen from a profit standpoint it always makes sense to go for the more lucrative market first and make something awesome that lasts. I believe that's in Apple's DNA and they will probably continue to reduce cost for markets as they see fit.  I don't think Apple is worried about losing marketshare. Most of these users start with Android, realize it's crap and upgrade. Apple will continue to make that affordable for them with the "C" line of phones, but they will not diminish their brand by getting into the price wars.

  • Reply 20 of 59
    lkrupplkrupp Posts: 9,991member
    Quote:

    Originally Posted by Crowley View Post

     

    At this rate Apple will have 0% market share in 6 years!


     

    I’m surprised some analyst isn’t actually predicting that.

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