iPhone losing market share despite growth in sales?

iPhone losing market share despite growth in sales?
Even though the Apple iPhone grew sales from the 3rd quarter of 2009 to the fourth quarter, the pace of that growth could not keep up with the entire market as a whole, according to ABI Research. As a result, the iconic touchscreen device saw its marketshare of worldwide smartphone sales decrease from 18.1% in the third quarter to 16.6% in the fourth period. This drop in Apple's piece of the pie came even though a record 8.7 million iPhones were sold in the final three month period of the year. That was an increase in sales of 18% from Q3.

Strategy Analytics used year over year data and on that basis, the picture looks entirely different. From a 10.8% piece of the market after the fourth quarter of 2008, the iPhone garnered a 16.4% share after the final three months of 2009 (note that the two firms were just .2% apart on the phones marketshare at the end of last year).

ABI's Michael Morgan has come up with a great phrase to describe a phone that loses marketshare because its design has not changed for years. Calling this "RAZR burn" after Motorola's once hugely popular handset, Morgan's report noted that perhaps the iPhone is suffering from that affliction. The WSJ shoots that theory down by noting that the iPhone still enjoys profit margins near the top in the industry and that the Apple brand still commands plenty of attention (witness the excitement over last week's announcement of the iPad).

With Nokia increasing sales in the 4th quarter by 4.6 million units and the launch of the Motorola DROID, smartphone sales grew 26% in the period according to ABI. The researcher says that 336.5 million handsets were shipped in the final 3 months of last year for a 15.1% gain , quarter vs. quarter. The marketshare leader in the period, worldwide, was Nokia with a still dominant 37.7% piece of the market. Samsung was the runner-up with a 20.5% share followed by the 10.1% reading for LG. In fourth and fifth place respectively with 4.3% and 3.6% of the market was Sony Ericsson and Motorola.

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source: WSJ via AppleInsider



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13 Comments

1. donjonson410

Posts: 32; Member since: Jan 11, 2010

lol, for all those nokia haters out there, they still are dominating.

2. mr. anderson

Posts: 92; Member since: Apr 16, 2009

razr burn, nice. looks like phonearena really hit the nail on the head with their review lol! from the conclusion and cons: "What once was a truly innovative phone has fallen into a rut, while the competition is breaking out of the box." "The decreased price point of the 8GB 3G may be good for Apple’s bottom line, but it’s starting to feel like the RAZR all over again."

3. JeffdaBeat unregistered

I feel like people just don't get it. Apple has never pushed themselves to be the dominant anything in anything they do. It just kind of turns out that way. For example, Apple is pretty strict about their prices when it comes to everything. If they wanted to dominate the computer market, they'd make MacBooks and iMacs under $1,000, but they don't. Apple wants to continue to be a premium company for people who want to spend a bit more. I think it's the same for the iPhone. Nokia puts out so many different kinds of phone every year. Apple puts out one phone and has considerable market share. I don't think we are seeing a decrease in iPhone users, but just more choices in Android, WinMo, and Blackberries. People are going from their regular phones up to these smart phones. A good chunk of them are going to the iPhone, but a good chunk has to stay in their own network as well. Apple is smart. iPhone users will generally go to the next iPhone no matter what. But there isn't that line of succession with other handsets most of the time. There will be only one iPhone and only one company to go to for it. Apple might not be the number one smartphone maker in the future. In fact, I bet that falls to Android. Now if they wanted to be, they would let their OS be sold to other manufacturers. But because they don't look to be the leading force in sales and more so the leading force in innovation and return customers, they still win out.

4. sleepyjohnny

Posts: 151; Member since: Dec 16, 2009

thats actually not true. Apple does strive for to be ultimate. Apples iPhone commericals for the 3g were like: "finally a phone better than the iphone, the iphone 3g!" basically saying that up until that point, there was no better phone. they dont lower the prices because Apple strives for profit.

5. DontHateOnS60

Posts: 872; Member since: Apr 20, 2009

Not a valid point. Of course Apple is going to claim their product as the best. Wouldn't you claim your product as the best too if you were Samsung, or Nokia? Apple does not strive to be the ultimate, and you can clearly see that by the feature sets of most of their products. Why release a half assed iPhone the first time around if you're truly striving to be the dominant force? Why not make that iPad better than it will be when it debuts? Why not give users the ability to truly customize the sound quality on their iPod via an adjustable equalizer? I think everybody is also failing to see that the market itself isn't a set number of users. The market is still expanding, and if Nokia can attack the market where it's expanding, and others can't, that's why they're share will increase, and others may decrease.

6. jundibasam

Posts: 119; Member since: Aug 05, 2009

yeah, i agree...every company strives to be number one, and Steven Jobs said as much when he first unveiled the iphone in 2007 when he said he envisioned a world where Apple was the only company that everyone used for phone, internet, and computer. Otherwise, what are they in business for? Jeff is right in that Apple charges a premium for their product, because there are Apple lovers out there that would pay anything for their devices and products, and they don't have to make a gazillion different models gain market share, and that is the brilliance behind their marketing and sales strategy. They strive to be number one in sales, but not necessarily in marketshare. But I would argue that no company really prefers to be #1 in marketshare. Marketshare doesn't guarantee profits or success, it just guarantees your product is out there more. If you have poor profit margins, it doesn't really matter what your marketshare is. Albeit, marketshare tends to correlate with profit since logically you make more money if your product is out there more.

8. JeffdaBeat unregistered

I never said Apple didn't strive to be the best. In my opinion, their products are some of the best on the market. I just don't think they actively pursue to be number one in market share and maybe that's where the confusion came. If they wanted everyone in the world to have an iPhone or an iMac, they'd lower their prices and make less of a profit off of their products, but they don't. Their products are awesome for the people that can afford them, but Apple is not willing to compromise price for accessibility. I think where Apple succeeds again is keeping iPhone customers with a series of phones instead of pumping out multiple handsets a year. If they did the latter then you'd see a bigger share. But they risk losing customers to other phones I think. Kind of like how Blackberry has a ton of different Blackberry models...it doesn't make someone always want the next iteration. Yes, Apple loses market share, but they get people coming back for a new phone every single year.

12. JC_Agga

Posts: 36; Member since: Aug 24, 2009

Somehow, i am not attracted to any of the apple products they are throwing out the window. But i do not think they make bad products either, just not my preference. Even though i may not like their products due to the too simple and boring design, i do respect Steven for innovating the market strategy. Hey, who ever thought Motorola was gonna get squashed by Apple? I thought the RAZR was the best handset out there at that time in terms of design wise. But boy, they did nothing with designs and Apple is at the peak of shadowing what Motorola made a mistake. And i am still surprised Nokia is still #1, followed by Samsung; Motora, who once got beaten by Samsung, they are now at the bottom of the bottom. What a shame. But going back to your saying "In my opinion, their products are some of the best on the market. I just don't think they actively pursue to be number one in market share and maybe that's where the confusion came" i like to object. Look where GM is at. Once the largest automaker is having a hard time and tried and still trying to get rid of the lowest marketshare auto brands to other makers. If Apple now is satisfied with their iphones, they are repeating the history itself. I think they do strive them self even further. They couldn't be here, in this place because of their superior devices. They had to work hard to achieve where they are. But who knows if they become the 2nd Rome?

7. thatdude1 unregistered

I agree with donthateons60. Nokia has wisely gone after the expanding market and produced an incrrease in sales and marketshare. Apple's iphone is slowly losing pace because people want something different, not the same old iphone. Even the ipad looks like nothing more than a souped up ipod touch.

9. zr1vette

Posts: 26; Member since: Aug 22, 2009

LG FTW!!!

10. Fanboys Suck

Posts: 609; Member since: Dec 12, 2008

Miserable Failure...

11. JC_Agga

Posts: 36; Member since: Aug 24, 2009

Wait... Samsung still lives?? Gosh... i thought they were the ancient?? I've been using SE Xperia X1 and HTC Touch Pro 2 for a while and forgot about Samsung is still a player... btw where the hell is HTC in this chart?

13. mr. anderson

Posts: 92; Member since: Apr 16, 2009

they make high-end niche products, of course they arent going to be on the list

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