Apple is running neck and neck with Samsung in global smartphone sales. Though Samsung was once the king of smartphone numbers—though never the king of smartphone profits—Apple closed the gap in the December quarter, according to Strategy Analytics.
Apple and Samsung both sold 74.5 million smartphones in the December quarter, but that comes with some significant caveats. Every one of Apple's smartphone sales was a profitable device competing in the middle and high end of the market. Samsung, on the other hand, sells a mix of devices, with a significant mix of low-end, entry-level devices that make little or no profit.
Let's look at the chart from Strategy Analytics:
| Exhibit 1: Global Smartphone Vendor Shipments and Marketshare in Q4 2014* | ||||
|
Global Smartphone Vendor Shipments (Millions of Units) |
Q4 '13 |
2013 |
Q4 '14 |
2014 |
|
Samsung |
86.0 |
319.8 |
74.5 |
317.2 |
|
Apple |
51.0 |
153.4 |
74.5 |
192.7 |
|
Lenovo-Motorola |
18.8 |
62.1 |
24.7 |
92.7 |
|
Huawei |
16.6 |
50.4 |
24.1 |
74.1 |
|
Others |
117.8 |
404.3 |
182.3 |
606.8 |
|
Total |
290.2 |
990.0 |
380.1 |
1283.5 |
|
Global Smartphone Vendor Marketshare (%) |
Q4 '13 |
2013 |
Q4 '14 |
2014 |
|
Samsung |
29.6% |
32.3% |
19.6% |
24.7% |
|
Apple |
17.6% |
15.5% |
19.6% |
15.0% |
|
Lenovo-Motorola |
6.5% |
6.3% |
6.5% |
7.2% |
|
Huawei |
5.7% |
5.1% |
6.3% |
5.8% |
|
Others |
40.6% |
40.8% |
48.0% |
47.3% |
|
Total |
100.0% |
100.0% |
100.0% |
100.0% |
|
|
|
|
|
|
|
Total Growth: Year-over-Year (%) |
33.7% |
41.4% |
31.0% |
29.6% |
Source: Strategy Analytics
As noted above, Samsung was once the undisputed king of smartphone sales. The company used to sell more smartphone devices than any other company, and it was second in profits behind Apple. In fact, Apple and Samsung combined have at times claimed more than 100 percent of industry profits as all of their competitors lost money.
Samsung's problem is that its sales on the high-end were predicated entirely upon being the first smartphone company to offer large-screen devices. This one-trick pony allowed Samsung to capture the hearts and minds of Android users, but when Apple finally entered the large-screen market with iPhone 6 and iPhone 6 Plus, Samsung's only competitive advantage vanished in a puff of getting-lucky-doesn't-mean-you're-good.
But Samsung also faces significant pressure in the rest of the market, too. As Strategy Analytics said:
Samsung continues to face intense competition from Apple at the higher-end of the smartphone market, from Huawei in the middle-tiers, and from Xiaomi and others at the entry-level. Samsung may soon have to consider taking over rivals, such as Blackberry, in order to revitalize growth this year. Samsung remained the number one smartphone player globally on a full-year basis in 2014.
In a word, you betcha.
Apple closed the gap not just by selling more iPhones, which it did, but because Samsung sold fewer devices across all segments of the market. Also, one quarter is just one quarter. It remains to be seen if Apple and Samsung will continue this trend*.
All of that said, the race for market share really doesn't matter so much in the mobile market. Concern for this metric is an antiquated holdover from the PC wars of the 90s when market share dictated where development dollars went. It's a by-product of people wanting to be able to measure things and declare a "winner."
Apple isn't even playing the same game as Samsung, Xiaomi, Google, or any other player in the mobile market. Developers make apps for iOS because they can make money doing so, and a few points of market share aren't going to change that any more than it did when Apple was losing share to the Android juggernaut starting with the release of the first Galaxy S devices.
Of course, it's fun to look at the numbers when your favorite team—Apple in this case—is doing well, but the numbers that are important to Apple are the ones showing it selling more iPhones and earning a profit by selling a great experience.
*LOL - Who am I kidding? Samsung is getting crushed, and Apple will take over as number one vendor, at least for a while.