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iPhone share of all phones sold is now above 4% and continuing to rise

I am dead serious. I am now convinced that we have enough data to determine for a fact that Apple will not only see a dramatic decline in quarter-on-quarter sales in units of the iPhone this January-March quarter (which is the predictable pattern and no surprise) but that we will also see a decline in iPhone market share against at least HTC and Blackberry;  that would be demoralizing news in itself. I know now that the numbers are clearly stacking up so, that the annual sales level of iPhone units, will result in a decline in iPhone annual market share in 2010.

via Communities Dominate Brands: iPhone in Memoriam: A History from its Peak Moment of Success. But who copied whom?.

Contrary to the loud and emphatic proclamations above, the data shows that the iPhone’s market share gains have been steady.

The following chart shows iPhone market share by quarter with a 4-quarter moving average. Total market size is reported by IDC.

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  • Pat S

    Guess it time for Tomi to Mea Culpa. It is obvious that the iPhone owns the high end smart phone market against all players, will Apple move down the price curve and try to capture a larger portion of the overall smart-phone market or be happy with the top 20% and grow with the transition from dumb to smart-phone?

    • FalKirk

      Apple will definitely not be "happy" with the top 20% of the market. With the Mac, I think Apple took what it could get. And what it got was the lucrative top 5% of the market that accounted for one-third of the PC profits. But Apple was never "happy" with that situation, only "satisfied" or perhaps even "resigned".

      I think the Ipod sets forth the model Apple would have followed with the Mac if they could have. First, they dominated the high end of the market. Once that battle is won, they moved down to the middle and lower ends of the market with suitably less powerful and capable products, but always with products that provided superior value to the customer.

      In the tablet market, this sequence is different, but the pattern remains the same. If the tablet is Apple's iPod classic, then the iPod Touch is Apple's nano. On the earnings call, Steve Jobs made it clear that any tablet that fell between the pocket sized iPod Touch and the full sized iPad could not survive. If true, then Apple has already captured both the high and the low ends of the tablet markets and left no room in the middle for competitors.

      We'll see. Much is unknown. But these two things I am certain of. First, Apple is never satisfied to only own the high end of the market. They will always want it all if they can get it. Second, Apple never moves "down the price curve" unless they can move up the value curve. "Lower price" is not a feature – it's a death spiral. The only way Apple will ever charge less, is if they can do so while providing more.

      • Hamranhansenhansen

        > 5%

        That is an old number. The Mac has 20% of the US retail PC market, or 10% of the overall US PC market, or 90% of the high-end US PC market, the only segment in which the Mac competes. But the Mac is only part of what Apple does.

        I don't think Apple was satisfied or resigned to low PC market share at all. I think during the comeback years they made "Mac" synonymous with "high-end PC" and then recognized that there could never be such a thing as a low-end Mac. A low-end Mac would be disappointing to users and an awesome pain in the ass for developers and support people. This is evident in Steve Jobs' famous statement that "we don't know how to make a $500 [Mac] computer." So instead of a low-end $500 Mac computer, they built a high-end $500 iPad computer.

        The iPad is actually more advanced than other $500 computers: it has touch instead of a mouse, it has OS X instead of Windows, it has solid state storage instead of hard disks, it has instant-on instead of sleep roulette, it has consumer usability instead of I-T foolability, it has cloud apps/music/movies instead of optical disc, it is smaller, lighter, better built, and more rugged, and it has much better support.

        So in the same way that you considered iPad and iPod touch to be high-end and low-end tablets, you can consider the Mac and iPad to be high-end and low-end PC's. In that case, Apple will very soon be the biggest PC maker by volume. Within the next couple of years we could see a situation where 1 out of ever 2 PC's sold in the US is an Apple PC (Mac or iPad).

        PC market share problem solved.

      • Marcos El Malo

        Re: 7" form factor
        Steve Jobs has a record of saying "no" about something, and then latter Apple does otherwise. The one that comes immediately to mind is video on the iPod. I think he might even have said that Apple wasn't interested in getting into the phone market at one point.

        For whatever reasons Jobs says no, always take it as a maybe.

      • Space Gorilla

        That's a good point about Apple not being satisfied with just the high end of the market. But something I think a lot of anti-Apple zealots (and even normal folks) don't understand is that Apple is in the enviable position of being able to do very, very well with just the high end of the market. They don't need huge market share to prosper. Larger market share is great, but Apple isn't going to die as a company if they don't get huge market share.

    • godofbiscuits

      You can buy a new iPhone for $99. That's sooooooo high-end.

      Next thing you'll be saying is that Macs are more expensive than comparably outfitted PCs. That is, when you actually CAN find something comparable (*cough* driveless all-Flash Air *cough*).

      • http://twitter.com/aegisdesign @aegisdesign

        $99 and a very expensive contract. The iPhone in the end costs you at least $600, probably more.

      • Cameron Palmer

        Norwegian law requires the cost of the phone be show up front so we know that the phone is about $789 without tax. Of course this fluctuates a lot based on exchange rate, and you have to account for the slightly higher cost of electronics here, but $600-700 is probably what you end up paying in the US. Also the monthly cost of the phone doesn't get lowered when you pay off the phone in the US, in part because you don't know how that cost is structured, but after the year contract is up here the per month price drops by the amount of the monthly phone payment.

      • Pete

        In the US, we have corporate freedom. In Norway, you have, I don't know, some sort of an attachment to rights of citizens. It is clear that in order to fall to the per capita GDP level of the US, Norway has to get rid of such regulations that infringe on the ability of corporations to offer competitive product pricing schemes.

  • Clam Chowder

    With respect Horace, I am pretty certain that Ahonen was talking about smartphone market share.

    That said, he would still be wrong!. Also he came up with this "theory" way before his "in Memoriam" post. He has been at it for 12 months now, and in that time Apple have increased iPhoner sales by over 90%….. and if you follow him on twitter (my advice, don't!) he is still insisting that iPhone will lose share in 2010.

    Sorry… I had to get that off my chest. You know how it is when 'someone on the internets is wrong'.

    • godofbiscuits

      Nope, the idiot was talking about all phones. From the original article:

      "And that will become clear long before the year 2010 is gone, we will know the signs by June. And mark my words, the numbers are now very clear, Apple's market share peak among smartphones, and among all handsets, on an annual basis, is being witnessed now."

      • http://twitter.com/aegisdesign @aegisdesign

        Wow, you read it all. I glaze over usually in the first paragraph.

      • Pete

        In fairness to Ahonen, a little context should be applied here. He said those things as he was gazing into a turkish coffee cup he had just finished at his visit with Madame Zora. So by "now" he meant the location in he was focusing his eyes at in the cup, where it clearly showed the peak in Apple's iPhone sales.

  • Alan

    A good point from Tomi's most recent Apple post: if you count Macs, iPads, iPhones, AND iPod Touches (iPods Touch?) as Computers then Apple sold close to 30 MM computers in the past quarter – making it the biggest computer maker in the world. Even bigger than Nokia who sold 26.5M smartphones, HP, and Dell. Pretty interesting.

  • godofbiscuits

    No, NOT a very expensive contract. A typical smartphone contract. The iPhone contract is no more expensive than any other at&t smartphone contract here in the USA.

    What exactly is your idea of a "cheap" smartphone? And what good is a smartphone that lacks a data plan?

    • Jody

      My Nokia N8, 499€. My wifes iPhone4, 680€. Contracts are exactly the same. iPhone is expensive. Get over it.

      • godofbiscuits

        In the USA, there are 3 models of iPhone for sale: an 8GB 3GS for $99 and 16GB and 32GB iPhone 4s for $199 and $299.

        In the USA, it appears you can't buy the N8 yet thru a carrier, so you can only get it unsubsidized. I researched it and it has 16GB of storage. The 16GB iPhone 4 is $599. The price I can get a Nokia N8 for is $549.

        Congratulations. You win by $50 (35.8€). I'm going to trust you that you're quoting 680€ as the price for the 16GB iPhone 4 and not the price for the 32GB iPhone 4? Wait, no I'm not, I'm going to ask: DOES your wife have a 16GB or 32GB iPhone 4? Cuz it looks like the N8 is only available with 16GB.

        With at&t, I get to buy a new SUBSIDIZED iPhone every YEAR (so I'm beating you by $800, or about a year's worth of monthly phone fees) for $199 for a 16GB model.

        How much is a year's worth of phone fees costing you, compared to the price of your phone? How much does your Nokia N8 cost you for a year, vs the cost of your wife's iPhone 4 for a year? What's the percentage difference overall? I already know it's only 15€/month over a year.

        For me:
        Total 1 yr cost: ( 12 * $80 ) + $299 [I bought a 32GB] = $960 + $299 = $1259 ≣ 903€
        Percentage cost of phone hardware: ~24% of the total cost of owning my phone for 1 year.

        So what are your numbers? Just curious, because after all, we both know they're going to be relatively close when you look at monthly cost, and really, what it comes down to is how happy you are with using it, the joy you derive from interacting with it, the use you get from it, the utilty it provides and….oh look, those are all intangibles, aren't they?

      • Eric

        Thank god the rest of the world isn't USA. N8 is free with contract (and no, it's not expensive contract when compared to Iphone contract in US)…

        Or of course you can just buy the phone unsubsidized and use whatever operator you want. And no extra fees because phone happens to be a "smartphone".

        On topic: we'll see what happens in Q4. My guess: Apple is going down (market share wise).

      • http://twitter.com/aegisdesign @aegisdesign

        In the UK, N8 is £429 inc tax. iPhone 4 16GB is £499 here. ie. not much difference really. If you can stomach the up-front cost then you can get SIM-only plans with data for £10. That's what I'm on (5000 text, 2GB data, 200 minutes any network, 5000 minutes same network). US plans are ridiculously expensive.

        If you go for a subsidized contract N8, it's £99 + £25 a month for 24 months. You don't really get 12 month contracts any more in the UK. So, £699 ($1121) over 2 years. iPhone 4 is £219 on the same plan btw. That makes iPhone4 £819 ($1313) over two years.

        US contracts are very expensive compared to Europe which is why cheap smartphones make little sense in the USA but do here. A Nokia 5230 is usually available free on £10 contracts. Add £5 for data a month. OR as many people do, buy it PAYG for £70 and top up when you want. $80 every month is obscene. You can't even buy contracts that cost that much here unless you need 3000 minutes a month as well as unlimited everything else.

  • Alexkhan2000

    So much for the Antennagate and so much for Android… And so much for these analysts who continue to predict doom and gloom for the iPhone… Of course, we're still early in the battle here, but the iPhone's momentum just seems to be accelerating. And now, China has been bitten hard by the iPhone bug and Fortune magazine has "confirmed" the "Dream Phone" that is the Verizon iPhone with a cover article.

    Apple's incomparable mindshare is driving market share and profit share growth in a truly remarkable manner. $500 million worth of advertising by Microsoft for WP7 won't dent the mindshare. Android is an insufferable maze to navigate through for the consumers. Perhaps it really is possible for Apple to hit $100 billion in sales in fiscal '11. I was thinking $85 to $90 billion at most… Breathtaking…

  • asymco

    Who knows about next quarter. Maybe they will not gain much share, but as the chart shows, on a moving average basis the trend is up. I noted however one hint of what going to happen. During the surprise Jobs visit on the earnings conference call, he said, in his inimitable way, "We've now passed RIM, and I don't seem them catching up with us in the foreseeable future." RIM's volume sales trajectory is very predictable. See: http://www.asymco.com/2010/10/22/nokias-moderate-

    If Apple will stay well above RIM then I think they'll be outgrowing the market and hence will be gaining share.

  • willem

    mea culpa, mea culpa, mea maxima culpa! http://communities-dominate.blogs.com/brands/2010