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Apple’s Smartphone Dominance Increases in the Domestic Market
Posted by: Analyse360Degree (IP Logged)
Date: January 18, 2014 09:04AM

The domestic market has brought some good news to the US tech giant Apple (AAPL) as its market share increased to 42% in the last quarter of 2013. This is quite obvious as more and more people are shifting to smartphones, and what better than flaunting an iPhone. The growing US smartphone market has been pretty beneficial for the Cupertino company’s rival Samsung as well. The South Korean multinational mobile maker saw its market share increase to 26% in the fourth quarter of 2013.

US buyers prefer to hold an iPhone or a Galaxy over other smartphones, and this is precisely why the two giants dominated the smartphone market with a combined market share of over 60% in the final quarter.

What about other smartphone makers?

Among other smartphone makers LG (LPL) is the only one that witnessed a rise in market share, but it still controls less the 10% of the market. Although the company saw a marginal increase in its market share, it should thank its stars considering other major players’ disappointing performance. One of the prime reasons why LG managed a positive market share trend is that it made Google’s (GOOG) Nexus 4 and 5. These handsets did decent enough to pull up LG’s presence in the smartphone arena, although it is way behind Apple’s and Samsung’s.

HTC, on the other hand, had a dismal quarter as it suffered a sharp drop in its market share which was above 10%. Blackberry was another poor performer and witnessed the sharpest drop among all players as its market share in the last quarter got halved in comparison to the previous year comparable quarter. This is not much relevant for Apple as these players are distant competitors. The only player that is a concern for Apple is Samsung.

Apple widens gap with Samsung in domestic market, but what about its global standing?

The new iPhone sales helped Apple increase its gap with Samsung in the domestic market. If we consider the figures, we see that Apple’s rise has been steeper from 35% in Q4 2012 to 42%, compared to Samsung which saw its market share rise from 22% in Q4 2012 to 26% in Q4 2013.The iPhone 5s and 5c saw higher sales and were more popular with American buyers than Galaxy S4 and Note 3.

Samsung is surely not happy with this. In addition, the Galaxy maker recently lost its position as the top smartphone seller in China to a local company Xioami. Samsung also had to reduce its overall profit forecast as the sales of Galaxy S4 are far below expectations.

However, it maintains an overall lead over Apple, thanks to the popularity of Samsung’s low cost Google powered android handsets in the emerging markets where iPhones are quite costly for the general masses. And although Apple has a lead over Samsung in the home market, the US doesn’t reflect the trend of the rest of the world. Samsung dominates the globe, followed by Sony (SNE) and LG.

My takeaway

However, this again is not the sole goal of the iPhone maker. It is a premium offering of the Cupertino tech hero directed towards the upper bracket of the society and not for masses. Although the company has come out with the low cost iPhone 5c for the emerging markets, it still happens to be pricy for the targeted mass. The wider picture in the home market is quite encouraging for Apple. As far as the emerging nations are concerned, the improving disposable income should have some positive impact on people’s spending on premium phones.



Stocks Discussed: AAPL, GOOG, LPL, SNE,
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