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back to article PEAK iPHONE? Apple mobe growth slumps to ‘lowest in its history’

Samsung has extended its lead over Apple by shifting considerably more smartphones than its adversary during the first quarter of 2013. The South Korean giant also managed to ship 56 per cent more mobes in those three months than it did in the same period a year ago. Among the world’s top five smartphone vendors, Apple - …

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As ever ...

Apple sales are compared to Samsung shipments

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Facepalm

Re: As ever ...

Okay, when we hear a story about Samsung burning millions of surplus mobes, or burying them in the desert, or completely halting all future production of their hardware, then I will accept that there is a difference.

Until then lets just accept that all those shipped devices are as good as sold.

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Re: As ever ...

And, as ever, we only get to know Apple's sale numbers while with Android we get how many devices are activated daily.

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Facepalm

Re: As ever ...

As ever... you haven't noticed that the word 'sales' isn't even used.

May I suggest you try - radical notion, I know - reading through to the end before commenting?

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Re: As ever ...

As long as you're also happy to accept that when Microsoft reports it's sold 60 million Windows 8 licenses, you apply the same logic.

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Anonymous Coward

Re: As ever ...

Yeah like HP with their tablet? Etc. Etc. Etc.

Shipped is not as good as sold if they are sitting on pallets in a disties warehouse.

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Anonymous Coward

Re: As ever ...

Surely it's the same for iOS - ok they don't report it daily but I'd imagine 99.9% of iPhones sold are 'activated so you can use the sales figures'. It would be like comparing sales of Dell computers to activations of Windows across the whole world?

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Anonymous Coward

Re: As ever ...

@RusselMciver

"all those shipped devices are as good as sold"

Er, no, they're not, not when all manufacturers are still seeing significant quarter by quarter increases in sales. Samsung are gearing up for a launch of the S4. Shipped covers pre-stocking for future releases and will include figures committed to be shipped by the end of the quarter. Additionally there are a very great many phones that hang around on mob shop shelves throughout the world. Many suppliers will have a returns contract, so can return stock that doesn't sell. So the net effect is Samsung are showing a significant dollop of the following quarters projected sales increase in the previous quarter as compared with Apple and when they have a big release about to arrive, their figures telegraph a significant dollop of that future into the present quarter.

In addition to this, you will never see the breakdown from Samsung of premium smartphone product versus low-margin low-spec product.

This is significant because it is having such a significant effect on the sales value of the customer in each ecosystem and when this is combined with per user usage figures it is clear iOS is, to put it bluntly, winning. Many don't like to hear it, but it is simply undeniable iOS customers are on average worth significantly more to ecosystem partners than Android customers.

A good way to gauge the health of a business is to think of dollars spent as votes of endorsement. Looked at that way, iOS is streets ahead of Android both for the base hardware purchase and for the software ecosystem partners. Any fool can give a product away for free. When charged for product is taken into account, it's clear iOS is doing rather better than Android. There has been a flash adoption of smartphones as the technology has come to break certain key price-points previously only met by feature phones, and this has been a key driver for Android adoption (we are back to the fact Samsung don't give the breakdown for their budget vs Galaxy line) thanks that the fact that it is there and was a practical option in the market place. But in the longer term there is a different, slower burn but more significant adoption pattern that is emerging for iOS. See this AllThingsD article:

http://allthingsd.com/20130426/androids-leaky-bucket-loyalty-gives-apple-the-edge-over-time/

Though it is generally accurate and a good way of looking at things to view dollars spent as votes of endorsement, I fully admit, there are for sure, certain caveats that should be observed regarding this generalisation. For sure, find exceptions can be found. Certainly highly committed customers exist, who aren't prepared to pay for much and so for these customers a lower spend doesn't correspond to a lower level of endorsement. However, remind me again of what the definition of Freetard is?

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Anonymous Coward

Re: As ever ...

"seeing significant quarter by quarter increases in sales"

As compared with the previous year's equivalent quarter I should have said there of course.

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Re: As ever ...

Your logic is right but facts are wrong. Q4 is always the biggest quarter (take a look at the link below). You could just as easily argue that Samsung's sales would have been even higher except for the stock pumped into the channel in Q4. Or you could just accept it's not a perfect comparison but the difference is large enough that no matter what, Samsung sold more phones than Apple.

http://www.idc.com/getdoc.jsp?containerId=prUS24085413

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Anonymous Coward

Re: As ever ...

Yes, I didn't put that well. When I said quarter by quarter increases, I meant in comparison with the quarter from the previous year and should have phrased it as such. But I didn't claim Apple have sold more phones than Samsung.

Samsung haven't sold more phones to committed customer's who are the most valuable market segment though and that's easily demonstrated and the link I provided demonstrates that through sticking with higher value customers, Apple are still managing to slowly and effectively grow their constituency, which also has the secondary effect of squeezing others in the industry into the segments with lower and lower margin customers. To change strategy and try to cater for the broadest possible market would be stupid of them because it would mean compromising what is a highly effective and lucrative business strategy.

The best counter argument is that the ecosystem winner takes all. However I don't think things are the same today as during the 90's when gaining a market-share edge meant shutting out all competition. We are no longer slaves to file formats and file formats are these days almost all file formats are entirely and effectively cross platform. So I don't think that is really a concern, other than that Google, Apple, Amazon need to effectively compete on their won terms.

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Anonymous Coward

Android dominance continues

in other words.

Why anyone would buy anything iOS these days is beyond comprehension (unless they believe the FUD that's spewed about Android at every WDC).

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Anonymous Coward

Re: Android dominance continues

How long until Samsung drop Android - they look like they are moving that way with the S4. Fact is a huge number of users get an Android phone but do not know or care that it's Android - it's just better than the last Nokia / candy bar they had before.

We see a lot of 'bad' news about Apple yet they shipped MORE phones - sure their market share has slipped as they do not try and sell a £50-100 phone and make no money on it and the market for smartphones is growing at the low end as people upgrade from old non-smartphones.

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Anonymous Coward

Re: Android dominance continues

Indeed. Android has replaced the crappy feature phones at the mid to low end of the market as the default phone option. That gives it massive market share, but this is the low margin market where the manufacturers are lucky to make a profit at all. Not the market you want to go after, unless you want to shout "market share up! revenues up! But we made a loss."

You can see the "real" smartphone market numbers if you look closely. One good measure is app usage - if you buy a phone as a smartphone (and not a feature phone replacement) you use apps a lot. The figures here still show apple ahead, especially if you look at the financial numbers - iOS apps make way more money. (And people wonder why WWDC sold out so fast?)

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FAIL

Re: Android dominance continues

Nobody buys the OS, everybody buys the device.

And with lots normal people, not developers, and with lots of non-English speakers buying the device, it is hard to see how WWDC has any kind of influence on people's buying decisions.

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Re: Android dominance continues

"We see a lot of 'bad' news about Apple yet they shipped MORE phones - sure their market share has slipped as they do not try and sell a £50-100 phone and make no money on it and the market for smartphones is growing at the low end as people upgrade from old non-smartphones"

A great point, funny how the article is never headlined "Apple fail to achieve greatest market share with non-mass-market product".

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Go Android!

Go Android! Go Android!

FUCK Apple. FUCK Microsoft.

Go Android!

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Re: Android dominance continues

"Apple fail to achieve greatest market share with non-mass-market product".

Indeed, I mean, they only sold 37 million iPhones, the only reason they don't call them "bespoke" is to avoid being sued by the tailors at Savile Row

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Anonymous Coward

Re: Android dominance continues

It wont be long till samsung drop android. I sell mobiles, and just had a training session on the S4. One of my collegues asked why the S4 could use google music, and why google allowed it. They didnt realise that the S4 was android. Which these days with "S-this", and S-that" isnt that surprising. They have started to move away already

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FAIL

Re: Go Android!

"Go Android! ... FUCK Microsoft."

Logic failure there. You do realize Microsoft makes money from almost every Android device sold?

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Anonymous Coward

Re: Android dominance continues @AC12:51

'Why anyone would buy anything iOS these days is beyond comprehension'

Perhaps to avoid all the malware prevalent on Android?

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Anonymous Coward

Re: Go Android! @Shagbag

I wish El Reg would stop allowing teenies on this site.

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Happy

Re: Go Android!

Go FANdroid more like!

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Re: Android dominance continues

"Indeed, I mean, they only sold 37 million iPhones, the only reason they don't call them "bespoke" is to avoid being sued by the tailors at Savile Row"

OR because they are made by the thousands in a Chinese sweatshop!!!

Do you even know what *bespoke* means??? *slaps forehead*

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Re: Android dominance continues

Not only I know what 'bespoke' means I also know what irony means: adj. sort of, like iron

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jai
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"will need to expand deeper"

I don't understand why Apply "will need to expand deeper" into new markets.

Marketshare doesn't immediately equal success or profitability. It just means the number of people using your product. It's just a statistic.

If the cost of being in those new markets outweighs the profit from each product sold, then having the largest marketshare is going to be detrimental.

But then again, I guess Strategy Analytics analyst Neil Mawston wouldn't be in a job if people realised this.

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Rob
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Re: "will need to expand deeper"

It's all about risk, market share at the low-end with loss making handsets should only be for a short time period before the drug dealer pushing hard drugs methodology kicks in, get'em hooked on the cheap/free in the hope that they will move onto the harder stuff through addiction (high end more profitable phones). It's either that or you make sure your high end products have enough of a margin to offset the low-end products losses. Either way it's always a gamble, sometimes you need to take a punt though.

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Anonymous Coward

It's easy to sell phones when you are cheap / making little money on them / giving them away - I've seen offers of free tablets with a phone etc. etc. Would be interesting to see actual usage figures and 'installed base' figures - last time I saw the web usage on iDevices was much, much higher pointing to people actually using them (of course people use them for other things but web is easier to measure and pretty universal).

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Anonymous Coward

Turnover is vanity - profit is sanity.

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Profit is opinion - cash is fact

(although Apple are doing very nicely for cash)

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Anonymous Coward

Apple have around 1/3 of their market value as cash - if that got near a half surely it would be tempting to just buy back your own shares. They are trading on such a low PE ratio they are a bargain and take out the cash and it's crazy value.

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Alert

1/3 of their market value as cash

But really there is a natural limit to how much you can polish an OS or Phone. The original wasn't actually revolutionary, the bits had just become economic and they added some 1950s Dieter Rams Style.

A lot of Jobsian Hype.

So they are reaching a natural plateau and without someone with MORE Reality Distortion Field and More vision than s. Jobs they can only make changes that make it worse (i.e. Apple Maps).

So far to soon to buy the shares. They will eventually be 1/10th of the peak 2012.

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Re: 1/3 of their market value as cash

It's very easy to forget what was arguably the most revolutionary feature of the (original) iPhone - the data tariff. The hardware (and OS) as you say were the result of a longer process of evolution (and convergence between mobile devices and computers) but leveraging the expected popularity of the phone to force AT&T (and later the other networks) to offer 'unlimited' data (or at least, a lot more data for a lot less than they previously had done) was what allowed the smartphone industry to take off. An iPhone-like device on the data tariffs which existed before the iPhone would have simply been too expensive for most people to really use.

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Re: Mage

....the bits had just become economic and they added some 1950s Dieter Rams Style...

If you are going to call Dieter Rams please be aware that in the 1950s he was designing furniture. - 1950 furniture!

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Re: Mage

And Braun Radios.

Ives even has admitted that all the simple white Apple products inspired/copied Braun Products case designed by Dieter Rams. He is still alive and quite Chuffed.

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Re: 1/3 of their market value as cash

Excellent point.

But that was Marketing clever, not innovation. Once that is out of the Bottle it helps every gadget maker. I had a Nokia Communicator N9210 Fortunately the office paid for it; handy being able to send and receive real Faxes as well as real email.

Actually I still can't justify a Mobile Data contract. I have to find a WiFi point when I travel.

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Re: 1/3 of their market value as cash

It's very easy to forget what was arguably the most revolutionary feature of the (original) iPhone - the data tariff.

Errr, excuse me, but o'er in Europe I was using Web and Walk long before the iPhone debuted. The original W&W was exactly that - unlimited data on all ports.

Then "smartphones" started to pick up, killed off all the real smartphones, and T-Mobile shat themselves. Bye bye unlimited data.

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> Turnover is vanity - profit is sanity.

>> Profit is opinion - cash is fact

Candy is Dandy, but Liquor is Quicker!

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Anonymous Coward

Re: 1/3 of their market value as cash

Hmm 1/10th peak - not going to happen - they have cash worth probably double that value in the bank. Making just what (HUGE) profit they make now they are seriously undervalued.

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Re: 1/3 of their market value as cash

I agree with part of this. The stock reacted well this week but im curious to see if this might be the time to actually trade it with out of the money calls.

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Meh

Neil Mawston is clearly a pillock

What Apple actually need to do, IMHO, as actually release a product that's actually an innovative repackaging of an existing concept again. The iPhone? Not the first smartphone. But well designed, well marketed, and ultimately desirable. Same for the iPad.

Or, you know, they could release something that is genuinely innovative. I fear they're going to snatch defeat from the jaws of victory if this trend of incremental upgrade bullshit that they peddled out between iPhones 4, 4S and 5 continues. And that won't be good for anyone. Not even the 'droids. Because as the Android dominance continues, manufacturers will get lazy. It happened with Microsoft and Windows. it will happen again with the Android peddlers. We need competition to keep the market fresh.

And would it kill Apple to give iOS a facelift? Seriously?

But then, what do I know? I'm not a Strategy Analytics analyst. I'm just a consumer who knows what he wants.

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It's easy to see

iPhone 5 is so fast that it's easily still faster than the newest Samsung, despite Samsung's faster chips. This because of better iPhone code. Samsung phones break or fail one-third more often than iPhone. Tests confirm these results on several Web sites. How much better do iPhones have to be to outsell Samsung? Well, it's not a matter of better. When you can buy 2 Samsungs for the price of one, when Samsung counts every phone it ships, wold or not, as sold, it's hard to compare figures. When Samsung lumps toghter cheap phones that baresly qualify as smart with newer phones, and when Apple makes 75 percent of profits from smart phone sales, you have to raise a few red flags.

You have to raise even more red flags when you learn that Samsung is paying a lot of money to bloggers to trash Apple with what amounts to whopping packs of lies and misleading statements.

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Anonymous Coward

Re: Neil Mawston is clearly a pillock

Why do you think Apple has to innovate, especially when the first paragraph of your post is about how they don't innovate?

Also, it's rare that any company makes anything but incremental improvements. Do you also troll on articles about... well, basically any other company that makes any product at all... and complain that they aren't being innovative enough?

As for giving iOS a facelift... meh. For those of us who aren't teenage boys, it's not necessary for our app icons to switch colors every couple of years.

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@RogerThat - Sweet Jesus, dude...

There's fanboying, and then there's that post. Samsung are the devil, their phones always break, there's a blogger conspiracy, etc, etc.

Knock it off.

I don't even like Android that much (I prefer it to iOS, but then I'd prefer a chainsaw in the shins to iOS), and I can tell you that the S3 is an excellent feature phone. I thought when I got it through work that I'd end up preferring my previous S2, and after quite a lot of time using it.....nope. In fact, I'd say it's better than my Nexus 4, specs be damned. The screen is gorgeous, the system is nippy, the battery life is surprisingly decent.

As a smartphone, they all suck, and I'd rather have an N950 if I could find someone to steal one from, but as a featurephone the S3 kicks ten bells out of anything Apple branded.

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Anonymous Coward

Re: It's easy to see

Look at Samsungs advertising budget for mobile - saw a graph the other day and think it was about 10-11x what Apple spend = desperate.

Are they really that much cheaper - compared a Galaxy S3 and a iPhone 5 at Carphone Warehouse - the same tariff on Three - both phones were £25 per month - the only difference being the iPhone 5 was £99 up front in addition. So over the 2 year contract we are talking an extra £4 per month effectively.

Now imagine you had those 2 phones and them wanted to sell them at the end of the contract - looking at the prices old iPhones actually sell for you would get that £99 back and then some in fact I'm not sure anyone would even buy a 2 year old S3?

Forget about better support from Apple, forget about iOS vs Android, forget about more accessories - but purely on a cost basis there is bugger all difference these days at the higher (profitable) end of the market.

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Anonymous Coward

Re: @RogerThat - Sweet Jesus, dude...

Until it goes wrong - colleague returned his Samsung and was told it was typically 21 days turn-around - fancy being without for 3 weeks plus postage time? No - he didn't either so had to go buy a new phone. Apple fault - 20 minutes in one of their stores - job done.

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Re: @RogerThat - Sweet Jesus, dude...

Next-day replacement on ours. Apple simply throw new phones at anyone with the slightest issue to get them to go away. Makes it really easy for fanboys I've known to claim that they've never had a hardware fault - they've never seen Apple admit to one.

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Trollface

Re: Neil Mawston is clearly a pillock

They are making a WATCH. What do you people want, blood?

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Re: @RogerThat - Sweet Jesus, dude...

@Greg J Preece

"Apple simply throw new phones at anyone with the slightest issue to get them to go away."

Ha. With deliciously twisted logic great customer service gets transformed into a cynical ploy to reduce workload by getting rid of any customers with a complaint as quickly as possible.

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Re: @RogerThat - Sweet Jesus, dude...

Ha. With deliciously twisted logic great customer service gets transformed into a cynical ploy to reduce workload by getting rid of any customers with a complaint as quickly as possible.

If you're the kind of person that does so little with their smartphone that simply throwing your existing one away and getting a new one is "great customer service", you might be missing the point. (Or you might just be an iPhone user.)

Laptop got an issue? Just throw it away, get a brand new one! That's the responsible thing to do! You won't have to spend days setting everything up again, will you? No chance at all of data loss, ho no. And when the manufacturer reconditions the machine they just took off you, you can totally trust them with the hard drive, right?

Yeah....there' a reason why when I ask for something to be fixed, I want it fixed. And that's to say nothing of the potential environmental repercussions of simply chucking stuff out. A place I know threw out two projectors this week because they were "broken." It took a multimeter, a soldering iron and ten minutes to give us two working projectors.

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