Aftershocks from Android market share dive rumble through mobile market

“RadioShack is plunging by 27% in the pre-market after a substantial warning,” Tero Kuittinen reports for Forbes. “Nobody expected this retailer to be in rude health – so why are investors responding so violently? Mostly because the long-term mobile strategy of RadioShack now seems to be in jeopardy. The company pinned its 25 cent earnings warning effectively on competitive pressure on Sprint and a vague, overall consumer softness.”

“We know that AT&T and Verizon sub numbers for 4Q11 were rock solid. There was no sudden deceleration in US post-paid mobile sub growth during the Christmas quarter,” Kuittinen reports. “What we did witness in the US handset market was a remarkable decline in Android market share combined with a strong rise in iPhone market share. The 15 point share decline of the Android phone family detected by Nielsen triggered a variety of issues.”

“HTC‘s handset volumes for November and December decreased sharply. AT&T’s profitability deteriorated as more than 80% of its smartphone activations were now taken over by the heavily subsidized iPhone. Motorola delivered dismal 5% handset revenue growth YoY,” Kuittinen reports. “And now Radio Shack, already weakened by other consumer electronics retail trends, is in big trouble. The iPhone is a raw deal for both retailers and mobile carriers – Apple effectively sucks in profits, leaving its partners weighed down by massive subsidy payments, promotional costs and/or low retail margins. This phenomenon is going global – just last week, KPN shocked European investors with lousy results it blamed on iPhone subsidies and certain consumer trends… The iPhone distribution may turn out to be a poison chalice for Sprint.”

Read more in the full article here.

MacDailyNews Take: Bloodbath. 🙂

[Thanks to MacDailyNews Reader “Since84” for the heads up.]

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ABI: Apple iPhone tops smartphone market as Android suffers its first decline in share – January 27, 2012
Apple overtakes Samsung to take world’s largest smartphone vendor crown – January 27, 2012
These charts will make the Fandroids want to puke – January 26, 2012
AT&T sold 7.6 million iPhones and fewer than 1.8 million Android phones in Q411 – January 26, 2012
Apple’s iOS passes Google’s Android to take U.S. smartphone market share crown – January 25, 2012
Analyst: Verizon’s record iPhone sales signal waning demand for Google Android phones – January 24, 2012

62 Comments

  1. Towards the end of my billing cycle, AT&T bills me $US10 per Gigabyte for data overages.

    The moment my billing cycle ends, my 4GB data limit is refreshed and any balance left on the Gigabyte overage disappears. It would seem that, AT&T is charging me ten-dollars regardless of whether I use all of that Gigabyte or not. Rinse and Repeat 50-million times each billing cycle and collect a nice chunk of change.

    Lesson learned: If you pay for it, use all of it.

  2. In the 80’s Radio Shack used to be useful for tinkering. You could at one time buy various supplies such as small motors, transistors, switches, solar panels and other unique items for tinkering right off the shelf no special ordering required. The TRS-80 was a fun toy computer used by many in it’s day to tinker. It died and gradually so did all the other cool stuff. Now all I see there of interest is a bunch of ready made crap. That is why Radio Shack will die. Now, all the consumers that Radio Shack wanted go to Walmart or BestBuy. The technically adept now go elsewhere like Fry’s or TigerDirect.

    Now, all that Radio Shack has is adapters, cords and ready made crap… and a 6′ USB cord found at Radio Shack for $20 can be had at Walmart for $6.88. Radio Shack is like an expensive graveyard.

    Radio Shack needs to remember it’s roots.

    1. Roots? Seriously?

      What ails RadioShack is the lack of any business acumen whatsoever! At the turn of the century that company experienced one debacle after another. HR put hundreds of store managers on notice before demoting them to sales staff. They closed hundreds of stores because they were competing with one another.

      Then the CEO resigns for padding his resume with bogus degrees. His replacement lasted a year before she resigned to take over Toys R Us.

      These stores are a mess, plagued with inventory and logistic problems.

      The problem isn’t their stock, it’s their board of directors and the lack of a chain of command.

      1. The consumer softness mentioned in the article came from the crappy stuff they sell (i.e. generic products at atrociously high prices.)

        I speak of the company as a consumer, while you speak of Radio Shack’s innards. When what they are presenting for sale no longer has value to the general public nor the tech geeks they used to cater to, who cares about Radio Shack’s innards?

        If you were a consumer in the 80’s at Radio Shack, you would understand when I use the term “roots”. Knowing about Radio Shack’s internal issues does nothing for consumer perception which I believe is more critical in this case. (Consumers are they ones that give you the money.)

  3. Data shows that ATT and Verizon sold more iPhones than Androids. Could it be that the return rate of Androids is very high during the test period whereby customers could return the Android phones if they were not satisfied?

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