“Much has been made of the iPhone’s declining market share over the past couple of years. Currently, it hovers around 15%, and it looks set to decline further in the coming years. However, the absolute number of phones sold year-over-year continues to rise, with Apple selling 35.2 million iPhones in Q3 2014 compared to 31.2 million in Q3 2013,” Zentech writes for Seeking Alpha.
“Apple bears point out that this growth is less than the growth of the general smartphone market (which is set to grow about 20% in 2014 according to Fitch). They imply that this will led to big trouble for Apple once the market is saturated, arguing that if the general smartphone market starts growing far more slowly, iPhone sales will start going flat, or even start to decrease, taking even more of Apple’s market share with it,” Zentech writes. “However, this isn’t necessarily true, or even the norm for Apple. Even in a market that isn’t growing, a company can grow their own market share within that company. This can be seen in how the Mac actually started growing both its market share and absolute units shipped year-over-year after the PC market started becoming saturated.”
Zentech writes, “The Mac line has still managed to see tremendous growth even in the face of single digit growth in the PC market. I believe this will remain true for the iPhone as well, due to the same reasons the Mac managed to gain market share… As of 2013, Apple made around 45%, of the total profit in the PC market [hardware manufacturers]. The iPhone will likely continue to lose market share, but what’s important is that the units sold year-over-year and the profits continue to grow. Eventually, this will result in market share gains as well, as it did for the Mac.”
Read more in the full article here.
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