Gartner: Apple falls below 20% in smartphone market share

Worldwide mobile phone sales to end users totaled nearly 426 million units in the first quarter of 2013, a slight increase of 0.7 percent from the same period last year, according to Gartner, Inc. Worldwide smartphone sales totaled 210 million units in the first quarter of 2013, up 42.9 percent from the first quarter of 2012. The Asia/Pacific region was the only region to show growth in mobile phone sales this quarter, with a 6.4 percent increase year-on-year.

“More than 226 million mobile phones were sold to end users in Asia/Pacific in the first quarter of 2013, which helped the region increase its share of global mobile phones to 53.1 percent year-on-year,” said Anshul Gupta, principal research analyst at Gartner. “In addition, China saw its mobile phone sales increase 7.5 percent in the first quarter of 2013, and its sales represented 25.7 percent of global mobile phone sales, up nearly 2 percentage points year-on-year.

“The Chinese and local manufacturers have been exemplary at addressing the demands of buyers by offering affordable devices with optimum features such as 2.5G (EDGE) instead of 3G in a smartphone. In the smartphone market, local and Chinese manufacturers are making faster inroads as they account for 29 percent share in the first quarter of 2013, up from 13.2 percent a year ago.”

In the first quarter of 2013, sales of mobile phones in the EMEA region declined 3.6 percent. The North America and Latin America’s mobile phone market fell 9.5 and 3.8 percent, respectively, while Japan saw its mobile phone sales drop 7.3 percent.

Mobile Phone Vendor Perspective

Samsung: Samsung remained in the No. 1 position, growing 13 percent in the first quarter of 2013 (see Table 1). Its share of smartphones reached 30.8 percent, up 3.2 percentage points from the first quarter of 2012 (see Table 2). “We expect the new Galaxy S4 to be very popular despite being more of an evolution than a truly revolutionary device compared to the S3,” said Mr. Gupta.

Nokia: Its mobile phone share dropped 4.9 percentage points in the first quarter of 2013 mainly due to a steep decline in feature phone sales. Although Nokia’s Windows Phone sales have sequentially improved reaching a volume of 5.1 million units, Nokia is yet to see high growth in the smartphone segment. Nokia’s position in the smartphone market dropped to No. 10 in the first quarter of 2013, from No. 8 in the fourth quarter of 2012.

Apple: Sales to end users reached 38.3 million units in the first quarter of 2013 as Apple was able to burn some of the inventory built at the end of 2012 as iPhone 5 was rolling out in more markets, and as the company prepared for Chinese New Year. China is a key contributor to overall sales for Apple, and Gartner analysts saw evidence of this in the first quarter of 2013, when sales reached close to 7 million units in mainland China alone thanks to the lower price of the iPhone 4. “Apple is faced with the challenge of being increasingly dependent on the replacement market as its addressable market is capped. The next two quarters will also be challenging, as there are no new products are expected to be coming before the third quarter of 2013,” said Mr. Gupta.

LG electronics moved in front of ZTE in the first quarter of 2013 for the No. 4 position. ZTE had a weak performance, failing to grow its smartphone sales, selling 7.9 million smartphones in the first quarter of 2013, a 5.1 percent decline from the fourth quarter of 2012.

Table 1: Worldwide Mobile Phone Sales to End Users by Vendor in 1Q13 (Thousands of Units)
Gartner: Worldwide Mobile Phone Sales to End Users by Vendor in 1Q13 (Thousands of Units)
Source: Gartner (May 2013)

In the first quarter of 2013, smartphones accounted for 49.3 percent of sales of mobile phones worldwide. This is up from 34.8 percent in the first quarter of 2012, and 44 percent in the fourth quarter of 2012. On the other hand, sales of feature phones contracted 21.8 percent in the first quarter of 2013.
“Feature phones users across the world are either finding their existing phones good enough or are waiting for smartphones prices to drop further, either way the prospect of longer replacement cycles is certainly not a good news for both vendors and carriers looking to move users forward,” said Mr. Gupta.

Table 2: Worldwide Smartphone Sales to End Users by Vendor in 1Q13 (Thousands of Units)
Gartner: Worldwide Smartphone Sales to End Users by Vendor in 1Q13 (Thousands of Units)
Source: Gartner (May 2013)

In the smartphone operating system (OS) market (see Table 3), Android continued to increase its lead, with nearly 50 percent more Android smartphones in the market than a year ago. “There are two clear leaders in the OS market and Android’s dominance in the OS market is unshakable,” Mr. Anshul said. “With new OSs coming to market such as Tizen, Firefox and Jolla we expect some market share to be eroded but not enough to question Android’s volume leadership.

Table 3: Worldwide Smartphone Sales to End Users by Operating System in 1Q13 (Thousands of Units)
Gartner: Worldwide Smartphone Sales to End Users by Operating System in 1Q13 (Thousands of Units)
Source: Gartner (May 2013)

Additional information is in the Gartner report “Market Share Analysis: Mobile Phones, Worldwide, 1Q13.” The report is available on Gartner’s website at http://www.gartner.com/document/2482415?ref=QuickSearch&sthkw=G00252860.

Source: Gartner, Inc.

MacDailyNews Take: Yawn.

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36 Comments

    1. It is all conspiracy, invisible men behind stock market driving the prices up to make profits, driving the prices down to buy at inexpensive prices for Apple to buy back its shares. That is name of a games.

    1. The point is that “smartphone marketshare” does not matter; matters cellphone marketshare: people now buy smartphones because they replaced featurephones. This is why there is no significant increase of web usage by Android phones. Those “smartphones” are cheap devices that users never really intended to use in that rule from very beginning.

      So what really matters is that Apple’s cellphone share grew to 9%. Company’s success or lack of will depend whether that share will grow or become lower in the following quarters.

      For the calendar Q2 that will end next month, Apple expects to sell near to 30 million iPhones, significantly lower than in Q1. This is typical for Apple, since main upgrade cycle ends within two quarters after phone’s release.

      Apple’s best tactics to negate this effect would be having a second iPhone model which will be updated in spring versus autumn update of classic iPhone. The second model could be a two hand device with bigger screen as market likes such devices, too (http://d-rs.livejournal.com/983.html).

      But before that the best thing they can do is to either shorten update cycle of iPhone — presenting iPhone 5S (or however it will be called) or separate cheaper iPhone model next month. This might help Apple recover cellphone marketshare in the calendar Q3 after expected (by Apple itself) drop this quarter.

      1. Apple’s upgrade cycle corresponds with industry buying patterns. The December quarter is the highest unit sales of the year. Changing the upgrade cycle won’t alter that most handsets come off contract during the December quarter.

        Apple’s share handset profits is 72%. Samsung has 29%. The Other 15+ manufacturers are fighting over 1% of industry profits. They won’t survive, which means that they won’t be flooding the market with 0% profit handsets in the near future.

        Watch unit share then.

        1. Your info is outdated. In the last quarter Apple’s share was 57% and Samsung’s 43%.

          By that measure it dropped 15%, and in Q2 2013 Apple will probably be below 50% and Samsung above. What will your argument be then?

          There is a reason Apple’s share price dropped today on these figures. The trend is clear.

          1. Yes, but Samsung did not factor in it’s stupendous advertising budget that included paying off many tech reporters for good reviews. Subtract and you are back to 70% for Apple, 30% for Samsung and a whole bag of hurt for the rest.

        2. well, don’t try so hard, man. what you say is only US. honestly, apple can’t compete with android platform in terms of numbers, license, manufacture. it can’t, and won’t. but 18.2% worldwide share is big for apple. good job.

      2. DeRS, you advice to Apple is completely flawed. As Gartner stated in its report, some of the largest gains in mobile phone sales have been inexpensive handsets in China where 2.5G (EDGE) networks are the fastest available. These markets aren’t using their smartphones to buy apps, surf the web, and do all of those other things. Therefore, they are really not in Apple’s target market.

        Those markets are gaining Android phones, because it’s a free OS that runs their “smartphones” nicely. But it’s not like Google, Samsung or anyone else is making much money off of these phones (Google especially because they’re not surfing much on 2.5G). So Samsung is gaining market share selling really cheap phones on which they make very little except for bragging rights.

        A larger screen iPhone won’t change anything in those areas. In fact, it probably will be a deterrent to sales because it would cost too much, significantly more than a cheap, smaller 2.5G EDGE “smartphone”. Frankly, Apple need not bother with it.

      3. Should have produced a second model a year go to address a broader market penetration and equally offering something a little different so we don’t all feel like clones and yes then you can have two launches a year and disencourage so much FUD which itself has a negative effect on people’s perceptions sadly.

    2. You should realize that Wall Street doesn’t care about profit share. Market share is all that matters. That’s why I honestly don’t see how Apple is going to dig itself out of this deep hole that’s getting deeper by the day.

      1. Apple is digging itself out because $140 billion is a hard thing live under. Every employee has fallen off his wallet or couldn’t lift her handbag at least 3 or 4 times a week.

    3. Market share, profit share, installed base. Three ways to look at it. The LEAST reliable is Market Share. In several reports over time, Samsung users do not seem to hang on to their phones as long as iPhone users, thereby doubling the sales as it relates to the installed base.

      I would love to see some kind of a statistic that correlates installed base use to sales. App downloads and use, plus web browsing, plus purchases over the iPhone, durability and of course length of ownership for an iPhone versus Samsung phones.

  1. Apple has 0 % NetBook market share that time , now what ! Ipad fucked the NetBooks . Market share is bullshit !!

    Fuck the market !! Why my AAPL dropped again !!!

    1. But why is this good when so many people bought Apple well above $400? It makes about as much sense as asking Apple to fall to $100 a share so you can buy more but wipe everyone else out. At some point the goal has to be to rise higher and not keep falling. Besides, a company shouldn’t just lose value for no reason at all if that’s truly the case.

      1. Apple’s goal is to make good products that their customers, 450 million strong, want to buy.

        Apple is not very interested in stock market manipulations. That is the job of the Securities and Exchange Commission. It is a shame that all of their members fell into an irreversible catatonic stupor and will remain that way for the foreseeable future.

  2. As the data indicates that 91% of smartphone users use something other then an iPhone, I think MDN can now officially use it’s favourite word, “beleaguered” when referring to Apple.

  3. There are many phone users like my wife. She doesn’t want a smartphone. She wants nothing to do with it. She wants a phone. A screen and a keypad; perhaps a camera, to snap occasional candid photo when opportunity strikes.

    It is becoming increasingly difficult to buy a phone for my wife. Last summer, I had to buy a refurbished, long discontinued Sony-Ericsson (that brand no longer exists) slider phone, because her old one died and she wanted exact same thing. I could buy a pre-paid cheap Android for $70, but I had to pay $80 for a five-year old feature phone that has been out of the market for the last three years.

    There are still many people who don’t want smartphones, and if they can’t have what they want, they’ll buy the cheapest Android and use it as a feature phone (no apps, no maps, no browser, no e-mail; just talk, text and a few pictures).

  4. Your info is outdated. In the last quarter Apple’s share was 57% and Samsung’s 43%.

    By that measure it dropped 15%, and in Q2 2013 Apple will probably be below 50% and Samsung above. What will your argument be then?

    There is a reason Apple’s share price dropped today on these figures. The trend is clear.

  5. Here’s another way to look at it. (If you just do a little arithmetic)

    Overall cell phone sales (all types) grew by 0.7%.
    Apple’s cell phone sales grew by 15.7%.
    The non Apple cell phone sales FELL by 0.6%.
    Thus Apple outgrew the overall cell phone market by over a factor of 20 taking sales from other vendors.

  6. Apple was equally dismissive of the importance of market share in the early days. People here need some perspective:

    http://arstechnica.com/features/2005/12/total-share/

    Despite Apple’s ability to outlive the other rivals through the late 80’s computer manufacturer die-off, Apple achieved a peak of only ~12% market share in 1993. It’s been a bumpy long downhill slide in market share since then, folks. Along with dwindling market share has been slow and nonexistent support from many of the best 3rd party software developers. Quicken, whose CEO sits on Apple’s board, doesn’t even offer Mac users the same capability software as the Windows versions offer … despite the fact that OS X is a superior platform by almost all objective technical measures! For years we have seen entire industries switch from UNIX workstations not to UNIX-based OS X, but over to the dark side of Windows! It’s all fine and dandy to sell Porsches, but at some point even Porsche realized that it can only survive by offering a range of vehicles that includes – gasp – vehicle configurations that are significant departures from the iconic 911.

    Sadly, despite the unprecedented rush of innovation from 1998 through the iPad, Apple seems to be in another funk. Don’t think that Apple’s distant 2nd place finish PC competition couldn’t happen to iOS if Apple allows its market share to fall behind. Granted, today Apple has a head start, but so did Amiga in the 1980’s: 40% market share in 1983 declined to less than 10% market share (still higher than Apple!) by 1989. Despite Commodore’s strong hardware, 3rd party software developers jumped on the Windows bandwagon — and took both enterprise and personal computer buyers with them.

    Market share DOES matter. It determines how long a company lives.

    1. That old Ars article is wrong, and I’ve sent them the historical data to show it as wrong. Apple actually peaked in market share (when combining the market share of all the computers it was selling — both Mac and Apple variants) at 19.2% in the third quarter of 1990. The peak was not 12%.

      The downfall happened for a number of reasons: Apple demanded 50+% gross margins when other vendors were settling for 20-25%; Apple went with “non-standard everything”; Apple’s Pink operating system was working in a rudimentary form in 1990 but then senior management decided to make Pink do all things for all people and it ended up never shipping; Apple tried to ship devices in almost every market segment (Apple had a camera, a game player, a TV, a PDA, etc.); Apple charged several hundred dollars for the development tools (plus more $$ if you wanted to be a registered, corporate developer!), etc., etc.

      Today, Apple’s gross margins are still high, but they float with the market. Apple does not set demands for minimum, unreasonable gross margins. Much of what Apple does is based upon standards not controlled by Apple and Apple even develops things and releases them to the open standards groups (think OpenCL and MiniDisplayport, etc.). Apple’s OS X is evolving and selling as is iOS. There will never be another Pink fiasco. While Apple is in several market segments, it goes into each new market segment in a big way — very different from the introduction of the Apple camera! And maybe the biggest is that XCode is free. You can develop for Apple products for free if you want. If you want to sell through the Apple App store the absolute minimum fees are nothing compared to the fees of 20 years ago.

      Apple is absolutely NOT headed down the same road they were in 1993. Market share is important, but it is not overriding. All the other factors going into the number of units sold and the profits thereon are much more important.

      1. You make several good points, Shadowself. Apple has definitely learned from the many mistakes it made in the late 80’s and early 90’s.

        However, market share management is still an issue. While the rest of the manufacturing world is contented to achieve 5-15% margin, Apple still demands 25-35%. If Apple continues on this path, it will see the Android store eventually achieve parity with Apple’s — and just like with Mac computers, prospective buyers will have a hard time finding why Apple’s premium is justified. ~90% will still choose the inferior, but far less costly, machine. Apple’s messaging since the end of the Hodgman/Long Mac vs PC adverts has offered no one a reason why Apple’s tablets or computers are technically superior, nor have Apple’s product introductions kept pace with the market. Hence, iOS loses share and Mac market share plateaus — but only because of a disastrous Windows 8 tamping down Wintel sales.

        In the early days, perhaps nobody had a chance to compete with deep-pocketed powerhouse IBM / Wintel machines for market share, so it was easy to see how the x86 enthusiasts got rich, fat, and complacent while Apple concentrated on being the Porsche of the computer industry.

        But now the shoe is on the other foot — Apple started off with a ~ 100% market share in tablets. But unlike the Wintel PC platform, Apple is watching its iOS share sink and is already acting complacent in both advertising and product innovation..

        Yes, profits are important today, market share tells you where you’re going to be tomorrow. Apple needs to both product & retail expansion to stop the bleeding. Which is what the market is telling the Apple community: stock games aren’t enough. If Apple thinks it’s worth $1k per share, it will have to show continued market share gains or get back to inventing entirely new markets. Cook hasn’t shown the capability to do either.

        Isn’t the Apple TV still a “hobby” ?

  7. Maybe the Andriod manufactures should report on units sold rather than units shipped. I bet if Apple reported this way, than Apple would be far above 50% world market share. Yet Apple reports on real numbers, which is actual units sold. BIG DIFFERENCE! Simply look at usage worldwide and iOS IS STILL ABOVE 60%!

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