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View Count: 71 |  Publish Date: November 12, 2013
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Apple and BlackBerry, together at last (in the loser’s column)
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This story is getting old.
The latest IDC numbers confirm what Strategy Analytics said first two weeks ago: Android has won, Windows Phone is still small but growing faster than any other mobile platform, and Apple’s iPhone empire, while likely still the most profitable hardware+software+media ecosystem in the world, is losing even more market share.
And yes, Apple, it all comes down to one thing:
“Android and Windows Phone continued to make significant strides in the third quarter. Despite their differences in market share, they both have one important factor behind their success: price,” said Ramon Llamas, Research Manager with IDC’s Mobile Phoneteam. “Both platforms have a selection of devices available at prices low enough to be affordable to the mass market, and it is the mass market that is driving the entire market forward.”
Here are the Q3 2013 quick stats:Android:Up 6.1 percentage points in market share, up 51.3 percent in unitsiPhone:Down 1.5 percentage points in market share, up 25.6 percent in unitsWindows Phone:Up 1.6 percentage points in market share, up 156 percent in unitsBlackBerry:Down 2.4 percentage points in market share, down 41.6 percent in units
In other words, Apple and BlackBerry can now be mentioned in the same breath as two major (or, in BlackBerry’s case at least, once-major mobile platforms) that are decreasing in market share.
Average selling prices of smartphones decreased for yet another quarter, down 12.5 percent to an average price of $317. An iPhone 5S starts at $649, off contract, and Apple’s iPhone 5C, which analysts had hoped would be the company’s answer to the infusion of lower-cost smartphones, starts just $100 less, at $549.
There’s no doubt that Apple was hurt in the third quarter by buyers delaying purchases as the new iPhone 5S and 5C were rumored and expected. And there’s little doubt that Apple will have a stellar quarter in 2013 Q4 with those exciting new models. The company will certainly bounce back from this quarter, to a degree.
And, Apple has always had — and will likely maintain for some time to come — stellar market share in the critical U.S. market, even topping 50 percent at times.
The problem is that the focus of the smartphone market has shifted east, to China, where a third of all smartphones bought globally are now sold. And to Africa, other parts of Asia. In those regions, Apple has languished in seventh place as local competitors such as Xiaomi and Huawei, Yulong and of course Samsung, win on price — sometimes as low as $100.
And that is the long-term arc of the market, what we’ve been seeing for months, quarters, and years now: decreased Apple share at the expense of cheap Android devices. And lately, of course, cheap-ish Windows Phone devices. Which means that one up quarter based on iPhone 5S and 5C strength is unlikely to change the fortunes of this war.
Apple’s not a low-cost competitor, and never has been.
But the question continues to be: Can Apple remain competitive globally with a world-class apps, media, and accessories ecosystem if it continues to dip in market share? In other words, will app makers, accessory manufacturers, and digital media vendors continue to supply Apple with what it needs to make a compelling case to consumers?
I asked that question of Strategy Analytics analyst Neil Mawston a week ago, and he said 10 percent is the critical mass number:
We estimate a marketshare level below 10 percent globally is when developers and operators start to get a little twitchy about supporting smartphone or tablet platforms. At less than 10 percent share, mobile platforms can start to lose the network effect. Consumers tend to follow the herd and they will generally be drawn toward the largest pools of users and away from the smaller pools over time. Apple has a very loyal, wealthy customer base, so Apple remains in good shape for now, but if the company’s global smartphone and tablet marketshare starts to drift below the 10 percent level at any time in the future, then alarm bells will start ringing.
Apple CEO Tim Cook said this spring that the company actually does care about market share. The question now, however, is whether it cares enough. And, whether it matters anymore.
If Apple does care enough to do something about this, its strategy needs to change. As of yet, there are no signs that it will.

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Time: 19:25  |  News Code: 337119  |  Site: venturebeat
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