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Apple's Growth Trails Smartphone Market in 3Q 2013, but Improves in Broader Mobile Phone Market

Research firm IDC today released its estimates on worldwide mobile phone sales for the third quarter of 2013, once again showing Apple's iPhone growth trailing that of the overall smartphone market. Apple's 33.8 million iPhone shipments were up 25.7% year-over-year, compared to 38.8% growth for the entire market. Market leader Samsung grew at slightly higher than the industry average, and Apple with its 13.1% share was able to hold onto the second-place ranking ahead of Huawei, Lenovo, and LG, all of which showed strong growth but remained at under 5% market share.

idc_3Q13_smartphones
Worldwide Smartphone Shipments in 3Q13 in Millions of Units (Source: IDC)
Apple's total volumes speak to the early success of the iPhones 5S and 5C, and the softening demand of older devices prior to the new models launching. The iPhone 5S lived up to the hype of the gold case and the fingerprint sensor, and the iPhone 5C with an array of colors. At the same time, limited usability on the fingerprint sensor and higher-than-expected pricing on the iPhone 5C drew mixed reactions. Still, this did not prevent Apple from enjoying a record 9 million units shipped in their debut.
As in previous quarters, Apple's performance in the overall mobile market benefited from the decline of the featurephone, with the company's 25.7% year-over-year growth easily topping the market's overall 5.7% growth and allowing Apple to remain firmly in third place behind Samsung and Nokia. According to IDC, smartphones accounted for 55% of total mobile phone shipments during the quarter, up from 42% in the third quarter of 2012.

idc_3Q13_phones
Worldwide Mobile Phone Shipments in 3Q13 in Millions of Units (Source: IDC)

Apple released its financial results for the third calendar quarter (fourth fiscal quarter) yesterday, revealing that the iPhone continues to account for majority of the company's revenue at 52 percent.

Related roundup: iPhone 6

Top Rated Comments

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13 months ago

Spot on. Who the hell wants to spends a lot, sell a lot and make a thin profit. :D


Customers do. Customers want high end specs smartphone for low price (thin profit for manufacturer).

For example, this high end specs smartphone is selling for $327 unlocked/off-contract in China.



Qualcomm Snapdragon 800 quad-core 2.3GHz CPU
Sharp/LG 5″ 1080P IPS display with ultra-sensitive touch
2GB LPDDR3 RAM
16GB eMMC4.5 flash memory
SONY 13 MP Exmor RS CMOS back camera
2MP BSI front camera
NFC & 2.4/5G WiFi support
3050 mAh battery

And it's outselling the Iphone in China. It's easy to compete when it's half the price of the iPhone while the specs are comparable (if not better).
Rating: 11 Votes
13 months ago

Spot on. Who the hell wants to spends a lot, sell a lot and make a thin profit. :D


Look at those smartphone numbers again - Samsung are outselling Apple almost 3-to-1.

That means Samsung can afford to have 1/3 of the margin Apple has and make the same massive profits.

Let's ignore business for a moment; wouldn't humanity benefit immensely from more people having access to better technology?

That was Apple's original vision. Not to make massive profits, but to make great products that change the world and to get those products in to the hands of as many people as possible.

Today, the company executing that vision is Samsung. Apple seems to be fixated on profit, despite being extremely financially secure already.
Rating: 11 Votes
13 months ago

Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.


NO

My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everything.


What ruined Apple was not growth … They got very greedy … Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible … they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.


From a wise man.
Rating: 9 Votes
13 months ago

Like he said, "shipments."

Not saying Samsung isn't selling smart phones by the boatload. Just that it's hard to know how far ahead they are when Apple gives us "sales" and Samsung gives us "shipments."


Apple gives shipments also.

And really, after 4 years still using the same old boring and meaningless "shipped vs sold" argument.
Rating: 7 Votes
13 months ago
This was the most potent paragraph from the linked article

The Android smartphone platform has created vast opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market. Smartphone shipments from vendors outside of the top 5 grew from 33.7% of the market in 3Q12 to 41.3% in 3Q13.


With that in mind, it won't be long until Apple slips into 3rd and 4th as adoption of Android continues to grow. Not exactly a bad place, as long as Apple continues to grow, and maintain a reasonable chunk of overall users in an active installed base.

What I will be curious to see, is if Samsung moves to Tizen, how much uptick that platform will have with regards to other handset manufacturers in the future.
Rating: 6 Votes
13 months ago

Aren't profits what matter most? Apple is targeting the middle to high end which is growing. Android can have the bottom end which is also growing but is less profitable.


only to stock holders. most of the people in the world are poor so whoever can tap that market will make the most money.

----------

How come samsung's phones are never in such tight supply? Considering they're selling a lot more than apple.


apples "short supplies" are deliberate.
Rating: 6 Votes
13 months ago

What's the point of getting the device to the hands of people if the device itself sucks? The way to get 3x the sales of iPhones, android phone manufacturers are releasing crappy phones that are loaded with bloatware and are hard to use.


If they are all that crappy and suck, how come they year after year outsell Apple? How can they have a better growth than Apple? Wouldn't people see through them selling useless phones year after year. Wouldn't they buy an iPhone the next time in that case? Have you actually used a modern Android phone (with objective eyes)? I believe it's amazing how much bang you get for your bucks when it comes to some Android phones compared to the 5C for example.

I certainly hope that the guys at Apple don't have the same opinion, but instead realize that there are a lot of really good Android phones out there. They won't just go away by themselves due to selling cheap crap that people will stop buying. They are a real threat.

I'm not saying Apple is doomed, but it's old and incorrect to brush off the Android phones as cheap crap.
Rating: 6 Votes
13 months ago

I'm sorry but you can't compare Apple and Samsung here.

How many phones have Apple got on the market get compared to Samsung?


Well, if you want to measure the market share you have to count all the phones. No company having the same number is irrelevant for that figure.
Rating: 6 Votes
13 months ago

Like he said, "shipments."

Not saying Samsung isn't selling smart phones by the boatload. Just that it's hard to know how far ahead they are when Apple gives us "sales" and Samsung gives us "shipments."


Thoroughly debunked... multiple times on MR. I wish people would stop using this myth.
Rating: 5 Votes
13 months ago

This is not the early nineties and it's not the PC market. Steve Jobs' quotes may not apply to the current market and current products. The race to the bottom in the PC market was over a decade off. The race to the bottom in mobile is imminent and would probably be happening now if it were not for Apple.


I think Steve's thoughts there translate perfectly to the iPhone.

What he's saying is that as long as Apple was making a profit and was financially healthy, they could afford to sacrifice some short-term profits in order to spread their products.

He's saying that what went wrong at Apple was that they became greedy - they had an early advantage, and they stubbornly believed their product was so superior that they could demand much higher prices forever. Ultimately, the competition caught up with 'good enough' products for much lower prices, and it destroyed Apple's future in PCs.

There are two ideas of what Apple is:

1. A company which builds the best products it can, or
2. A company which makes as much money as it can.

If you believe that Apple's goal is to make the best products, who cares if their profits fall? So long as they remain healthy, they can afford to lower their prices because it means more people have access to better products. That's the point Steve was getting at; it's not about making obscene profits; the vision was to "make the thing an appliance and get this out there to as many people as possible"

---

If anything, Steve's comments are even more fitting of the smartphone market. The global technology industry is much more developed than it was in the 90s, and the so-called 'race to the bottom' has happened much faster than it did in the PC industry as a result.

Look at the iPhone's market share since launch to see just how fitting those comments are. The iPhone initially took the world by storm, and early Android devices (like the G1 and G2) couldn't hope to compete. Apple stuck to its guns, insisting that their product was superior and they could demand much higher prices for it, which left an enormous space for the competition to enter. Apple made ridiculous profits for a number of years, but now their profits and market-share (especially outside the USA) are falling.

They went for profits instead of market-share, and it could very well have cost them their future once again.
Rating: 4 Votes

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