The iPhone share: 17.25% of smartphones, 4.2% all phones

The mobile phone market is growing rapidly. It grew 18% in the last quarter. The smartphone market grew even faster, about 75%.

To grow share in this market means growing even faster than the market. What we can see from the following charts is how the iPhone as a product grew in share since it was launched 3.5 years ago:

Unit share growth slowed in the last quarter but the fourth quarter is not usually the most expansive for Apple. That is usually the third quarter which is the first full-availability launch quarter.

The iPhone ended the quarter with 17.25% smartphone share and 4.2% phone share. Share of revenues was about 22% and share of earnings was about 51%.

I still hold that 20% smartphone share is possible for the iPhone. As the smartphone market slowly becomes the entire phone market (see chart to the left) that share will be worth something.

  • One thing I've wondered though is what % of users of smartphones will actually use them as designed, i.e. more than just for calling, texting or email. Although hard to measure (sometimes through the proxy of web usage) isn't it more important to measure the true usage of smartphone features? Calling, texting and emailing is impossible to monetize for manufacturers (carriers can) whereas app stores, in app advertising and in app purchasing are where vertically integrated manufactures can add revenue and hence profit. Even if iPhone caps at 20% if it's actually engaging users at a much higher percentage than others (50% or higher based on web use and app downloads) then by design AAPL wins the race. I personally think you're being too conservative at 20% as well. As the next wave of smartphone buyers jumps into the pool although their first smartphone will be a major change, they may subsequently want the one that they see their friends and colleagues with engaging with more.

    • Steven Noyes

      My thoughts. IPhone users seem to be about 4-5 times more likely to actually purchase an app when compared to other platforms. I expect the iPhone to hit 15-20% so it will get about 30-50% of the application revenue for mobile apps.

      Given the faster and cheaper development cycle, iOS looks to have a happy future.

      Not to bad.

      • famousringo

        Gartner estimates that Apple took 90% of all mobile app downloads in 2010:

        I suspect iOS took a lot more than just 30-50% of mobile app revenue. It remains to be seen if anybody can build an ecosystem that can rival Apple's.

  • ______

    So if Apple can reach 20% of smartphones and smartphones grow from ~25% of the total market to ~50% of the total market, that implies a 10% share for iPhone – which means at some point Apple has to be able to sell >100M iPhones per year. At current ASPs that is >$60B in annual revenue from iPhone (which, incidentally is the total FY2010 revenue).

    People continually lose sight of this, perhaps it is easier to not think about it because the numbers are so staggering. Honestly, who cares if Android is doing 300k or 350k activations a day, when a single phone's annual revenue has the potential to dwarf entire countries' GDPs?

    • poke

      Yes. I don't really see the point in comparing the iPhone to total Android phones, as many analysts do, at all. Apple smart phone sales should be compared to Samsung or HTC or Motorola's smart phone sales. Who exactly benefits if Android has x percentage of the market? Google might in a nebulous, derivative way. But none of Apple's direct competitors do. What are we supposed to do with the information that total Android phones now have more market share than the iPhone?

      • tfaulk

        I prefer a comparison to LG, SE, AND Motorola. Each individually have similar unit shares of total phone market (not just "smartphones"), the three COMBINED have almost equal revenue as Apple, and COMBINED they have virtually ZERO profit — a stark contrast to Apple's profits.

  • FalKirk

    "I still hold that 20% smartphone share is possible for the iPhone."

    I think Apple has much higher aspirations than 20%.

    First, in 2010 Apple discovered that more people wanted iPhone 4s and iPads than they could make. This despite the Antennagate scandal and the fact that the iPad was a brand new product in what was essentially a brand new category. I don't believe Tim Cook will ever let that happen again. He's learned his lesson. If the market is growing at 70, 80, 90 percent a year then Apple's productive capacity needs to grow FASTER than that.

    Second, the Apple lineup is now almost an integrated whole. People are not going to own an iPod Touch, an iPhone or an iPad. They're going to own them ALL. The iPod Touch and the iPad virtually own their categories. There is no way that they are going to leave the iPhone behind as they scale to greater and greater market heights.

    Third, we still haven't seen what the iPhone can truly do. Its been constrained by carriers. It's been constrained by production. It's like a high performance race car that is being run on cheap fuel and driven on unpaved roads. When the playing field is even – when Apple can make all the iPhones the world desires and sell them on all the carriers that desire to sell it – THEN we'll see just how far and how fast iPhone sales can go.

    • ______

      Agreed. The rough estimate I typed above, is probably conservative.

      The numbers possible are of such unprecedented magnitude that it is hard to actually envision that sort of success, yet past and current performance shows that it is within the realm of possibility.

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  • dchu220

    There is always a big debate on who iPhone should be compared to. Should it be compared to manufacturers or to Android OS?

    Personally, I think it is more useful to compare iPhone to the different manufacturers for this reason. Each manufacture makes their adjustments to the Android OS and is responsible for delivering updates. They, along with the carriers, control the progress of Android. I wouldn't be too surprised if in the future, more manufacturers choose to keep making phones with outdated Android OSs if they think they will be able to save a penny or two in development costs.

  • Jay

    It is useful to compare platform to platform (iOS to Android). That is Aplle to combined handset sales of Android.
    Platform is what counts in the long run so that trend is what is more useful and shows success/failure. Of course we need to see units sold and profits made side by side. That is what Asymco did it so well above.

    • unhinged

      Profits are what count in the long run.

      The arguments over market share assume that there is a direct correlation between the two. Apple has shown, as per Horace's charts above, that profits can be massively disproportionate to market share.

  • expandin


    With the clarification from Samsung yesterday… that 2 Mio. Samsung Galaxy Tabs shipped (NOT SOLD) it makes me wonder, if Android's growth can be measured at all! Or if it's only due to a) Exclusivity of iPhone and b) shipments of devices being count against sales of iPhones…

    Here's the idea that I have:
    Last quarter Apple announced exactly 33 Mio. iOS devices sold (including iPads, iPod touchers, and iPhones….
    Now Canalys claims that 33 Mio. Android devices have been SHIPPED (not sold)… With this assumption we can only conclude that Android overtook Apple if all of the shipped devices also were sold… Which is an insane assumption in my opinion.

    If we assume that handset makers love too have some channel inventory… say the produce of batches of 1 Mio. devices and ship them. That from those 33 Mio. devices many will be sold in future or won't be sold at all, since new devices will arrive and kill them, or be sold under rebates that will certainly kill Android handset makers profit shares… e.g. a 50$ rebate for an Android device is not equal to Apple's 50$ rebate… It's more like, it just killed their profit margin and those future devices won't make any profits.

    A lot of analysts also forget to include iPod touches, iPads to the iOS share when comparing platforms. I often Read Android overtook iPhone… which makes no sense at all. It's either Samsung Galaxy S overtook iPhone or Android overtook iOS… which is not true, if we assume that some channel inventory remains… I would love to hear your feedback/thoughts on this… as I think that latest report from Canalys is pretty much wrong comparing SHIPMENTS of Android devices vs SALES of iPHones in those two ways at least. Maybe you could write a post about it and clarify the situation. As always I love your work! Thanks!

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  • Steven

    I think it's OK to compare iOS numbers to Android numbers, but those doing the comparisons (and reading them) must realize it cannot just stop there. The reason is that the ability of individual manufacturers to make a healthy profit is going to determine who can stay in the game, not how much overall market share Google can claim. You had a post a while back which stated that those vendors who are flocking to Android are, almost by definition, the market losers. I think what drove Nokia to Microsoft (besides a sudden, coincidental influx of ex-Microsoft execs) was, in part, a desire not to be lumped into that group. All Google has proved is that by corralling enough losers the rancher can rack up some decent numbers. But which cows will be able to survive?

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