Apple iPhone market share failure to grow in Q4 2010

[c1ue]

Not good news for those who think Apple is going to hit $1 billion market cap...

http://www.comscore.com/Press_Events...r_Market_Share

Top Smartphone Platforms 3 Month Avg. Ending Jan. 2011 vs. 3 Month Avg. Ending Oct. 2010 Total U.S. Smartphone Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Oct-10	Jan-11	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	23.5%	31.2%	7.7
RIM	35.8%	30.4%	-5.4
Apple	24.6%	24.7%	0.1
Microsoft	9.7%	8.0%	-1.7
Palm	3.9%	3.2%	-0.7

Top Mobile OEMs 3 Month Avg. Ending Jan. 2011 vs. 3 Month Avg. Ending Oct. 2010 Total U.S. Mobile Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Mobile Subscribers
	Oct-10	Jan-11	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Samsung	24.2%	24.9%	0.7
LG	21.0%	20.8%	-0.2
Motorola	17.7%	16.5%	-1.2
RIM	9.3%	8.6%	-0.7
Apple	6.4%	7.0%	0.6

To be fair, Apple's release cycle is June, so let's look at June comscore data:

Top Smartphone Platforms 3 Month Avg. Ending Jul. 2010 vs. 3 Month Avg. Ending Apr. 2010 Total U.S. Smartphone Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Apr-10	Jul-10	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
RIM	41.1%	39.3%	-1.8
Apple	25.1%	23.8%	-1.3
Google	12.0%	17.0%	5.0
Microsoft	14.0%	11.8%	-2.2
Palm	4.9%	4.9%	0.0

Top Mobile OEMs 3 Month Avg. Ending Jul. 2010 vs. 3 Month Avg. Ending Apr. 2010 Total U.S. Mobile Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Mobile Subscribers
	Apr-10	Jul-10	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Samsung	22.1%	23.1%	1.0
LG	21.8%	21.2%	-0.6
Motorola	21.6%	19.8%	-1.8
RIM	8.4%	9.0%	0.6
Nokia	8.1%	7.8%	-0.3

Nope, June iPhone 4 release didn't do much.

Does this look like organic growth to you?

This hasn't affected Apple's bottom line yet as the smartphone market is growing - thus maintaining market share still means more revenue for Apple. But this trend isn't good - at some point there will be no more free Nokia, RIM or Motorola market share to bite off.

Android is going to eat Apple alive much as Windows ate MacOS, barring a radical change in Apple marketing and business approach.

[FrankL]

Re: Apple iPhone market share failure to grow in Q4 2010

I've said this before, and it still is my opinion that Apple and Google do not target the same consumers on the cellphone market.

Apple is aiming at the most profitable 7% of the market, and wants to monetize on the content aspect (Apps, Music, Videos, ebooks, etc.) by offering a very nice and complete ecosystem that is closed-off to competitors. They're appearing to be relatively successful in their attempts to displace the old music and video industries by filling the gap they left in offering digital downloads where the old big players refused to adapt their business model to the digital age.

Google seems to be targeting phones at many pricepoints, and it's not very clear to me how they're going to turn their marketshare into a revenue stream, let alone profit. Their market is fragmented which impedes android app development as you're never sure how much power the phone running it will have, which version of android it will be running, etc. Oracle has sued them for using the Java Virtual Machine called Dalvik, and it is not clear what will result from this lawsuit.

I think Apple has a much better idea of how to make profit from stuff than Google, which appears to drift like a ship with no rudder. The problem with Apple's approach is that it has been very dependent on Steve Jobs who already is way past his due date for someone with pancreatic cancer. Since Apple aims at the top 7% of the market, the are also very dependent on consumers' ability to spend the big premium required for their gadgets. If US consumer buying power will go down, they're going to be affected the most (of all smartphone makers). Current Apple share price seems to ignore these aspects and I think any temporary end to QE(2) plus the looming death of Jobs will cause lots of panic in Hedge Funds holding their shares.

[cjppjc]

Re: Apple iPhone market share failure to grow in Q4 2010

Not good news for those who think Apple is going to hit $1 billion market cap...

I think he said something like it was foolish to believe that is was impossible. You can put me into the I don't think they will either camp, along with the it's foolish to believe almost anything is impossible camp.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

I've said this before, and it still is my opinion that Apple and Google do not target the same consumers on the cellphone market.

The same argument was made in the heady days of the '80s: Mac users and Windows/Dos users were different consumers.

Didn't work then, isn't going to work now.

[doom&gloom]

Re: Apple iPhone market share failure to grow in Q4 2010

I am neither in the apple love or hate camp, but I have to tell ya all, my wife and one of my sons have Samsung w/Windows phones and no way would I ever take an iPhone over that setup. It is very impressive!

Fair disclosure: I own a few iPod nano's and a 64G touch

[GRG55]

Re: Apple iPhone market share failure to grow in Q4 2010

The same argument was made in the heady days of the '80s: Mac users and Windows/Dos users were different consumers.

Didn't work then, isn't going to work now.

I think you're wrong this time c1ue.

What happens with the iPhone is going to depend a lot less on what happens in the USA than how it does everywhere else. The iPhone has always been a GSM device, while North America has always been a CDMA network [all of the rest of the world is GSM]. That's one of the reasons that in the USA Apple has been stuck with AT&T's crappy coverage GSM network, and in Canada is limited to Rogers equally lousy GSM coverage for the same reason.

I have always been a GSM tri-band phone user because of living and working abroad so much. I know from personal experience when I am in Canada or the USA just how bad the GSM network coverage is there...I have to use it. And I am quite certain this is one of the things that discourages people in those two countries from buying an iPhone [I read somewhere a while back that Apple might be bringing out a CDMA version of the iPhone specifically for the North American market]. I'm not convinced that USA statistics are at all meaningful for this most international of products.

One of my ancient Nokia phones failed a few weeks ago and I replaced it with one of their N8 "smartphones". It is an absolute piece of garbage. Not even as good as Apple's first iPhone offering, and light years behind the iPhone 4. The problem is the iPhone is much more expensive, and therefore outside of North America it has really come to be seen as a luxury accessory, much like a Louis Vuitton handbag or briefcase. The people that buy these things would not appear to be as sensitive to the economy as RIM's business oriented client base, or Google's Android powered phones for the masses.

I have no idea how all of this will translate into market cap for Apple stock [I don't own it so I don't care}, but I do have the sense that it is going to be very, very difficult to displace the iPhone from its market slot.

[BTW, I just bought my very first Apple product ever a few weeks ago. An iPod Classic to replace my previous solid state Sony MP3 players. Nice bit of kit actually]

[pescamaaan]

Re: Apple iPhone market share failure to grow in Q4 2010

Not good news for those who think Apple is going to hit $1 billion market cap...

let's see what the numbers look like for Q12011 when iphone hit verizon. i have had both an iphone (company paid for it at my last job). but when i switched i lost the iphone and decided i wanted to give sprint and their 4G/wimax a try (i had been a long time verizon customer). i will say i like sprint's network, but Android as a platform is horrible. especially when compared to an iphone.

there are a lot of other places to argue iphone vs Android but i will say this in summary - the iphone just works and does a lot of things cleanly and well. Android breaks all the time and it is not intuitive to use like the iphone. i work in tech so it's not fair to say i'm a newbie. i can't tell you how many times i have had to pull out the battery of my Android because it's power management/application management is awful - the thing just freezes up.

i could go and on....

in the end, Android will continue to gain marketshare because there are lower cost phones when compared to the iphone, and yes, it is less restrictive. and of course, there are a lot of people coming from flip phones who will be impressed simply by the ability to surf the web, get email, etc.

so i wouldn't discount the iphone just yet simply because their market share isn't growing. a lot of that is likely due to the fact that they were exclusive to AT&T and a lot of people refuse to join that network.

[sishya]

Re: Apple iPhone market share failure to grow in Q4 2010

Nope, June iPhone 4 release didn't do much.

Does this look like organic growth to you?

This hasn't affected Apple's bottom line yet as the smartphone market is growing - thus maintaining market share still means more revenue for Apple. But this trend isn't good - at some point there will be no more free Nokia, RIM or Motorola market share to bite off.

Android is going to eat Apple alive much as Windows ate MacOS, barring a radical change in Apple marketing and business approach.

C1ue : I think Apple makes money from repeat customers from upgrade of IPhone or IPad now.
Also lot of people who tried IPhone are buying Mac/Apple Routers etc... so their market share is growing in other places.

They are also starting to make money in Apple ecosystem of "Apps" and now content also. These are points based on my
personal experience of how I went through Apple products.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

I think you're wrong this time c1ue.

What happens with the iPhone is going to depend a lot less on what happens in the USA than how it does everywhere else. The iPhone has always been a GSM device, while North America has always been a CDMA network [all of the rest of the world is GSM]. That's one of the reasons that in the USA Apple has been stuck with AT&T's crappy coverage GSM network, and in Canada is limited to Rogers equally lousy GSM coverage for the same reason.

Gartner disagrees with you:



What you're forgetting is that since Apple has been serving the high end of the market, the wealthy/technophiles in other countries were already buying iPhones from the US (and Europe) to use in their own countries.

I myself have brought a number of new iPhones over to other countries upon request.

Were Apple to go downmarket - their market share would certainly increase. But doing so also greatly risks alienating their existing customers.

let's see what the numbers look like for Q12011 when iphone hit verizon.

Not a whole lot from indications so far. Because cell phones are sold as part of 2 year commitments, plus the difference in cell service costs isn't that great, there just isn't much reason to switch out.

http://www.techieinsider.com/news/6519

So the seemingly long awaited Verizon iPhone 4 has since been released, yet instead of the blockbuster-long lines that were expected to be seen, we saw almost no lines at all and it looks like sales are coming in at a trickle. While there were online sales with this, it does look like the huge volume that Verizon expected has not materialized. The Boy Genius Report of February 16 spills the data from an Apple source that the preorders of the CDMA iPhone 4 were at 550,000 units, down from a Verizon Wireless statement that claimed as many as 700,000. These sales numbers would have to be considered a huge disappoint for both Apple and the carrier. Predictions of more than a million iPhone 4 sales in the first few days may have been accomplished, but there has been no reporting of numbers. This would tend to indicate that it has not met their expectations.
Also from the same inside source is the data from five Apple stores over the five first days, Verizon reportedly selling 909 units the first day and slowly trickling down to 711. Migration was even seen more from other Verizon phone customers than other networks, Android users comprising 30% of sales than the 14% from AT&T. All of this does not look too good for Verizon and the iPhone 4 which was supposed to break all previous sales records

C1ue : I think Apple makes money from repeat customers from upgrade of IPhone or IPad now.
Also lot of people who tried IPhone are buying Mac/Apple Routers etc... so their market share is growing in other places.

I'm sure that's true. And that's the exact same trap that killed Apple in the Macintosh days.

The 'true blue' Mac users would pay 2x or 3x for their newer Macs, but virtually no one else would.

Eventually Apple was shoved into a tiny niche of the market.

As for other equipment: may be true. But routers are cheap - not clear how much of a benefit to Apple's bottom line that would be.

In 2008, iPhone was 39 percent of Apple's revenue and possibly over 100% of its profit (other divisions generally lose money). Throw in iPod, and I'd almost bet money that these represent all of Apple's profits.

[flintlock]

Re: Apple iPhone market share failure to grow in Q4 2010

Best electronic bargain out there imo is the Ipod Touch. I paid $150 for an 8gb. 16gb would have been better but hey. I use it for music and have an Ap to do electrical calculations while on the job. With wifi it can really do a lot of neat things. And no data fees like the Iphone, who's capabilities I don't really need. So I can use a REAL phone for work that I can drop and get wet, etc.

[doom&gloom]

Re: Apple iPhone market share failure to grow in Q4 2010

Best electronic bargain out there imo is the Ipod Touch. I paid $150 for an 8gb. 16gb would have been better but hey. I use it for music and have an Ap to do electrical calculations while on the job. With wifi it can really do a lot of neat things. And no data fees like the Iphone, who's capabilities I don't really need. So I can use a REAL phone for work that I can drop and get wet, etc.

i snagged a "reconditioned" 64G touch (sans camera) for $200 shipped. I was beyond happy. I have language lessons, music, tons of podcasts. I have yet to fill the 64 G!

[aaron]

Re: Apple iPhone market share failure to grow in Q4 2010

I am an Apple-hater as much as the next geek , but I must say... their iPad is really a great gadget. I am buying another one in a couple of weeks because we fight over it in the family. Since I got it, I have not touched my Kindle. It is really a nice ebook reader (I read kindle books on it). It is also a great entertainment device. My kids watch movies and play games on it. The battery lasts a long time.

To me, Apple is like Google. They are both huge corporations that I would love to hate. But, they are the best at what they do. Apple will hit 1 trillion dollars between the FED printing and the expanding wealth in Asia (you know they will buy an iphone before a decent bed, for example).

[thriftyandboringinohio]

Re: Apple iPhone market share failure to grow in Q4 2010

I'm posting this from my Droid 2, and it's a very mediocre device. Tonight I was out to dinner with business associates, we had 2 droids, a blackberry and an iphone. Only the iPhone gave us fast and practical web and nav to find a place to eat in a strange city.

[Techdread]

Re: Apple iPhone market share failure to grow in Q4 2010

I agree with you.

Android is going to commoditise the smartphone and tablet business, Google is the Tech company that is going to reach 1 Trillion market capitalisation first.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

To me, Apple is like Google. They are both huge corporations that I would love to hate. But, they are the best at what they do. Apple will hit 1 trillion dollars between the FED printing and the expanding wealth in Asia (you know they will buy an iphone before a decent bed, for example).

If you mean Japan, Apple is doing relatively well there - albeit because the definition of the smartphone excludes almost all Japanese phone models with similar capability.

However, in China Apple is doing quite poorly:

http://tech.fortune.cnn.com/2010/12/...disappointing/

• The Chinese smartphone market grew 200% year over year, even as the broader cellphone market grew 220%.
• Chinese consumers bought 8-10 million smartphones last quarter, up from 2-3 million in the same period last year.
• Android phones represented 50% of smartphones sold last quarter, up from zero last year.
• Nokia's (NOK) Symbian OS, had 70% of Chinese smartphone market a year ago, is rapidly losing share but still growing revenues.
• Apple and RIM sold fewer than 500,000 last quarter, results that "have to be viewed as somewhat disappointing," according to McCourt.
• "RIM continues to be sold only to enterprises/government in China," he writes, "which is significantly hampering its progress."

Android in China: 4-5 million sold in last quarter. Apple in China: 500,000.

Sure doesn't look like an iPhone domination in China.

I'm posting this from my Droid 2, and it's a very mediocre device. Tonight I was out to dinner with business associates, we had 2 droids, a blackberry and an iphone. Only the iPhone gave us fast and practical web and nav to find a place to eat in a strange city.

I've never said the iPhone was a crappy device - much as the Mac, they are both well integrated systems. But then again, the same can be said for Japanese cell phones - as I note above, most Japanese cell phones have smartphone like capability despite a lack of equivalent hardware due to the tight integration.

The problem is that as time and technology improves (note Android only went public 15 months ago vs. iPhone 32 months ago, plus the distributed vs. integrated model), iPhone will only improve incrementally while Android will continue to improve geometrically.

I actually expect the Android trend to slow down because I fully expect Google to start charging more for it, but as with the PC market - the economics of technology improvement will erase the iPhone vs Android distinction.