IDC: All leading smartphone vendors outgrew Apple iPhone unit sales in holiday quarter

The worldwide smartphone market reached yet another milestone, having shipped one billion units in a single year for the first time. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 1,004.2 million smartphones worldwide, up 38.4% from the 725.3 million units in 2012. This aligns with IDC’s most recent forecast of 1,010.4 million units, making for a difference of less than 1%. Smartphones accounted for 55.1% of all mobile phone shipments in 2013, up from the 41.7% of all mobile phone shipments in 2012. In the fourth quarter of 2013 (4Q13), vendors shipped a total of 284.4 million smartphones worldwide, up 24.2% from the 229.0 million units shipped in 4Q12.

In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 1,821.8 million units, up 4.8% from the 1,738.1 million units shipped 2012. In 4Q13 alone, vendors shipped a total of 488.4 million units worldwide, up 0.9% from the 484.0 million units shipped in 4Q12. This is 2.8% lower than the 502.4 million units that IDC had recently forecast.

“The sheer volume and strong growth attest to the smartphone’s continued popularity in 2013,” says Ramon Llamas, Research Manager with IDC’s Mobile Phone team. “Total smartphone shipments reached 494.4 million units worldwide in 2011, and doubling that volume in just two years demonstrates strong end-user demand and vendor strategies to highlight smartphones.”

“Among the top trends driving smartphone growth are large screen devices and low cost,” said Ryan Reith, Program Director with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Of the two, I have to say that low cost is the key difference maker. Cheap devices are not the attractive segment that normally grabs headlines, but IDC data shows this is the portion of the market that is driving volume. Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many.

Smartphone Vendor Highlights:

Samsung ended the quarter the same way it began the year: as the clear leader in worldwide smartphone shipments. But even with sustained demand for its Galaxy S III, S4, and Note models, as well as its deep selection of mid-range and entry-level models, the company realized a decline compared to the previous quarter. Nevertheless, the company maintained a sizable double-digit lead over the next vendor.

Apple posted record shipment volume during 4Q13, driven primarily by the addition of multiple countries offering the iPhone 5S and 5C, and sustained demand from its initial markets that saw these models launch at the end of 3Q13. Still, Apple had the lowest year-on-year increase of all the leading vendors. Now that Apple has finally arrived at China Mobile, it remains to be seen how much Apple will close the gap against Samsung in 2014.

Huawei maintained its number three position worldwide, attained the highest year-on-year increase among the leading vendors, and raised its brand profile with a higher proportion of self-branded units compared to the ODM work it had done for other companies. Still, even with its success, Huawei faces a crowded group of potential competitors within striking distance.

Lenovo, despite having no presence in North America nor Western Europe, finished the quarter in the number four position. The company’s strength lies in its strong presence within key emerging markets and a well-segmented product portfolio spanning from simple, affordable smartphones to full-featured 5″ screen models. Should the company become successful at branching into more developed markets in 2014, it could challenge Huawei for the number three spot.

LG finished just behind Lenovo and edged out ZTE for the number five position, with just five million units separating the two companies. At the same time, its year-on-year improvement put the company on par with Huawei and Lenovo with market beating growth. LG’s success can be directly attributed to its revived portfolio from a year ago, which featured more large-screen and high-end models, including the Nexus 5 and its Optimus G series.

Top Five Smartphone Vendors, Shipments, and Market Share, 2013 (Units in Millions)
IDC: Top Five Smartphone Vendors, Shipments, and Market Share, 2013 (Units in Millions)
Source: IDC Worldwide Mobile Phone Tracker, January 27, 2014

Top Five Smartphone Vendors, Shipments, and Market Share, 2013 Q4 (Units in Millions)
IDC: Top Five Smartphone Vendors, Shipments, and Market Share, 2013 Q4 (Units in Millions)
Source: IDC Worldwide Mobile Phone Tracker, January 27, 2014

Top Five Mobile Phone Vendors, Shipments, and Market Share, 2013 (Units in Millions)
IDC: Top Five Mobile Phone Vendors, Shipments, and Market Share, 2013 (Units in Millions)
Source: IDC Worldwide Mobile Phone Tracker, January 27, 2014

Top Five Mobile Phone Vendors, Shipments, and Market Share, 2013 Q3 (Units in Millions)
IDC: Top Five Mobile Phone Vendors, Shipments, and Market Share, 2013 Q3 (Units in Millions)
Source: IDC Worldwide Mobile Phone Tracker, January 27, 2014

Note: Data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Source: International Data Corporation (IDC)

MacDailyNews Take: Apple isn’t shooting for general market share domination, just market share domination of the mid- to high-end, which, by all anecdotal evidence (customer quality, apps sold, data usage, etc.) they do dominate.

That said, Apple is leaving sales on the table and making it more difficult for themselves to later gather up these lost customers who begin to invest in the fragmandroid “ecosystem.”

As we wrote last week:

When Apple finally extracts their collective head from their collective ass and ships iPhone models with larger screens, they’ll do more damage to slavish copier Samsung than all of their endless, plodding patent infringement cases combined.

We believe that Apple became infatuated with the fact that only they could produce small, thin smartphones with an efficient OS that could work with the small batteries that these compact iPhones housed. “Nobody else can do such things.” Meanwhile, battery-hogging Android leeches like Samsung slapped larger screens on their phones to hide the fact that they needed significantly larger batteries in order to run for even a few hours (Android phones are notorious for running out of charge).

Far too many otherwise intelligent consumers saw little or nothing of Apple’s considerable engineering superiority (the iPhone 5s is simply the best smartphone anyone has ever produced), these otherwise intelligent consumers only saw iPhone’s smaller screens. They didn’t see Android’s inefficiency or inferior ecosystem, they only saw phones with larger screens.

If we’ve heard from one person who went with an Android phone for a larger screen who in fact really wanted an iPhone – “I’d have gotten an iPhone if only they had a larger screen” – we’ve heard it from a thousand. These are top tier, cream-of-the-crop customers (i.e. Apple’s target demographic), not low information cheapskates. They want to be Apple customers and participate heavily in Apple’s ecosystems, but, for a few years now, Apple has been blowing these sales by failing to deliver the product these high value customers desired. It’s inexplicable; any downsides (fragmentation, inventory management, etc.) are vastly outweighed by the vast sales potential to those who should be Apple customers, but are now carrying a plastic piece of crap from Samsung.

Bottom line: Apple screwed the pooch on this one. Shit or get off the pot, Tim.

MacDailyNews iPhone screen size poll
Source: MacDailyNews

27 Comments

  1. agreed. not making bigger screen iphone is tim cook’s biggest plunder so far.

    yet apple’s market share is growing nicely! in the one regard that counts: overall phone market. it outgrew samsung, nokia and the “others” category from 7.8% in 2012 to 8,4% in 2013. even saw more than 10% in q4 2013. that looks good to me.

    of course looking at the subset data of “smartphone sales” makes a better headline following the meme of “apple is in big trouble”.

    1. It is not a “blunder”. It is deliberate strategy. Please keep in mind that Apple is trying to achieve the highest amount of PROFIT over time, and they want to stretch out the product cycle. If they would have launched a larger phone last year they would have just substituted sales of that for the 5s.

      They also know exactly how many phones of each generation are out there and who is coming eligible for a new subsidized phone, and that cycle will play into their launch timing.

      1. I would think they have a “good” idea of the number of iPhones out there via access to the AppStore and recent sales. But if you consider iPhones that were stolen, broken and not reported to any Apple store, stock still on hand at various 3rd party outlets, etc. it would be very misleading to report “exact” numbers in use for each generation. Launch timing is also a fine art of balancing introduction of a new product with possibly new tech that if released by a competitor earlier will take some wind out of Apple’s new product release and the risk of eating into possible sales of their earlier product if released too early.

    2. You have to be VERY careful reading these stupid blogs and dumb charts. Yes, Apple GREW (i.e. percent of increase) the least with only 150 MILLION units and LG did so wonderful with an 82% growth…. yet only selling 1/3 of the phones that Apple did.

      % change is a TOTALLY stupid indicator when not using very similar markets. If sell one phone the first year and 6 the next, I am a major threat to Apple as I grew 500%. Gee aint I doing just so great!!!!!

      Figures dont lie, but liars can surely figure. 🙁

      1. But LG doesn’t trade at 550 either. Remember the analyst here are pointing out that Apple is not growing anymore. Profits have now flattened so unless a new product comes out and no the IPHONE C is NOT IT then they will continue to see their profits erode. That is what market maturity does.

  2. Selling out of date 2 year old tech in the shape of the iPhone 4S with a limited 8 GB storage is a strategy that only a manufacturing maven like Cook would follow. If simplification of the phone line were a priority, they should have narrowed down the choices to iPhone 5S and 5C with a $300 price differential between them.

    An 8 GB phone with a tiny 3.5″ screen is an insult to the consumer. You don’t even have space to install a reasonable number of apps or store movies on the phone to watch. I’ll give them a pass for not introducing a larger screen phone given that it’s a ‘tock’ year – a year of upgrades rather than a completely new design – a ‘tick’ year on a ‘ticktock’ scale.

      1. Couldn’t agree more. Apple’s charge for memory is ridiculous. How is it I can buy a 64GB memory card for my camera for around $50 and Apple charges $200 over a 16GB to 64GB model upgrade. Apple charges $200 to go from 8GB to 16GB on an iMac. For $200, I can buy 16GB RAM from OWC and add them to the iMac for a total of 24GB’s of RAM. Thankfully, the iMac’s now have 4 memory slots. 16GB is really the new base system amount of RAM, unless you like watching the spinning beach ball.

        Obviously, Apple does this to make the base price if systems look reasonable, but than nail you on the enhancements. That’s why I love Other World Computing, they sell all the kit for enhancing your system bypassing Apple’s inflated prices. Memory is one if the easiest things to install, so there’s no reason to pay the Apple tax on memory. One of my favorites is their Fusion Drive kits for Mac mini, iMac, MacBook and The older Mac Pro.

        1. “That’s why I love Other World Computing, they sell all the kit for enhancing your system bypassing Apple’s inflated prices. Memory is one if the easiest things to install, so there’s no reason to pay the Apple tax on memory”

          Not anymore, thanks to Apple now soldering RAM to their entire Macbook Air and all but one (the non-Retina) of the Macbook Pros. The smaller of the two iMacs are technically RAM-upgradable but Apple claims the RAM slots “are not user accessible”.

        2. I know people here love OWC, but with all due respect, there are many vendors from which to purchase Mac RAM. Personally, I moved all my purchasing from OWC to Crucial and Newegg years ago because OWC customer service wouldn’t work with me on an issue I had.

          Since I moved, I found out Crucial in particular has better customer service, a better product without the OWC generic/matched BS, the same lifetime warranty, a far superior return policy, and all at pricing that is significantly better.

          A 16GB kit for a mid-2012 MBP is $198 at OWC, but only $164 at Crucial. Sometimes you can find the same kits even cheaper on Amazon.

          1. I have no love for OWC. They totally screwed me over on an order: charged my card, never shipped, wouldn’t respond. It was terrible. I won’t do business with them again. There are other, better options.

  3. Should bode nicely for Apple in the future, as all these new entry level smartphone customers get a taste of what a smartphone can do to enhance their life. So a lot of them will want to take it to the next level next time and have an even better experience with Apple iPhone.

  4. Lest we forget (again) market share only means something in business if you can leverage that position into profits. Profit is what matters, and Apple is the clear leader. Apple’s market isn’t the cheap phones. So all of this analysis is meaningless.

    1. You’re confused if you think “all of this analysis is meaningless,” especially MacDailyNews’ analysis, which has been dead on all along. MDN called the iPhone 5c mix issue immediately, before even Apple figured it out:

      Why would anyone buy an iPhone 5c instead of an iPhone 5s? – Tuesday, September 10, 2013

      In fact, MDN basically described the iPhone five years before it was unveiled:

      Is Apple building ‘The Device?’ [revisited] – Tuesday, January 9, 2007

  5. Everybody needs to settle down the ship isn’t sinking, Apple has never been about market share, or profit, it’s always been about creating the best experience for the customer. Read the quotes below from Steve Jobs, it helps.

    Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.

    Our goal is to make the best devices in the world, not to be the biggest.

    You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.

    The hardest thing when you think about focusing. You think focusing is about saying “Yes.” No. Focusing is about saying “No.” And when you say “No,” you piss off people.

    Quality is more important than quantity. One home run is much better than two doubles.

    It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

  6. First, one must remember that the deal with China really was not active for the quarter, and it is possible that Cook and Co had to promise China the current active model for sale, and with excellent product reliability. It is one thing to make a few smart phones and it is another thing to get the manufacturing volumes that Apple has. This current quarter will be very interesting, as we get to see the effect on Samsung, because they really “owned” the China market. In reference to the bigger screen iPhone, I think Tim is waiting for the new glass. That glass will give them a product unmatched in the industry.

  7. Looks like Samsung did not do as good 4Q13 as they did 2013 overall which may mean downward trend for Samsung. I have also read from many smartphone users who switched from Apple to Samsung and then back to Apple. Says a lot about “junk”.

    I think there is nothing wrong with small but I think there is everything wrong with missing functionality and this is where Apple needs to spend more attention.

    Then again, there is no reason not to offer a bigger screen iPhone albeit without Retina.

  8. This explains why Wall Street has lost its enthusiasm for AAPL. Hitting “record” sales is easy in a fast growing market. But under Cook, Apple is growing way slower than the market. Even a premium brand should be growing at the same rate as the competition.

    Perhaps iOS7 drove away buyers. Perhaps the selection of screen sizes is no longer acceptable to the public. Or Apple’s strategy of keeping old phones in production for years isn’t working anymore.

    Or all of the above. It shouldn’t be that hard to figure out that people want their choice of screen sizes, and have real control over colors and fonts, etc. Putting a pastel plastic wrapper on last year’s hardware doesn’t improve user choice. Moreover, iOS7 was touted as revolutionary, but it didn’t improve most users’ experience/efficiency/legibility at all. Blinding people with a white spotlight and then burying an absolute minimum UI preferences under the “Accessibility” panel is just a slap in the face to intelligent users. Cook seriously needs to get his ass in gear with more consumer choice. A much more user-friendly iOS8 can’t come a moment too soon.

  9. In spite of all the arm-twisting hoopla about bigger screens, two things remain anecdotally true: 1) A significant number if people I’ve talked to, including Galaxy-wielding Verizon and ATT operators I talked to when shopping around for deals on my first iPhone (5S), say they regret getting the phone with a larger screen because they feel uncomfortable or silly holding what amounts to a micro tablet computer, up to the sides of their heads. Two Verizon operators told me they felt stuck with what they had and wished they could change their purchase to a smaller screened phone. One of those operators told me that when she saw the iPhone her son had purchased, that she wished she had chosen that instead. 2) If Apple buckles to the big screen non-sense then they better plan on continuing to make the smaller screens because there are some of us that are never going to buy a phone with a bigger screen – it really ceases to be a phone. I need the portability, and if I need something bigger than a current iPhone, then I need an iPad or a laptop.

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