Tech Research

Apple Pushes Back Against Android as Smart Phone Market Surges

Apple is making something of a comeback in the smart phone market. While Google's Android OS continues to be — by far — the most widespread handset operating system overall, among individual vendors, Apple has pushed itself into a dead heat with No. 1 manufacturer Samsung.

In the fourth quarter, Apple's iPhone shipments soared 46 percent compared with the same period the previous year, totaling 74.5 million units and capturing 19.85 percent of the smart phone market worldwide, according to market research firm International Data Corp. (IDC).

Samsung, still in the lead for the quarter and the full year, shipped 75.1 million units, off 11 percent from last year, to capture 20.01 percent of the market (8.82 points lower than in the same period last year).

"Most of the industry expected an extremely strong holiday quarter from Apple, especially with regards to the iPhone. However, worldwide shipments of 74.5 million units beat everyone's expectations," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker, in a prepared statement. "Beyond the record-setting quarter, a few impressive things stand out with regard to Apple. First, at a time when average selling prices (ASPs) for smartphone are rapidly declining, Apple managed to increase its reported ASPs in the fourth quarter due to higher-cost new models. Second, the growth of iPhone sales in both the U.S., which is considered a saturated market, and China, which presents the dual challenges of strong local competitors and serious price sensitivity, were remarkable. Sustaining this growth and higher ASPs a year from now could prove challenging, but right now there is no question that Apple is leading the way."

According to IDC, for the quarter overall, smart phone shipments were up 28.2 percent compared with the previous year, reaching 375.2 million units.

"Apple reached a new quarterly shipment record in 4Q14 and fell just short of surpassing Samsung for overall leadership in the smartphone market. An elevated consumer appetite for big-screen devices, as well as Apple's push into China and other countries, saw iPhone sales up 44 percent in the U.S. and up 97 percent in the BRIC countries (Brazil, Russia, India, China)," according to IDC. "Sales doubled year-over-year in China, Brazil, and Singapore. What remains to be seen is how long Apple can sustain this runaway growth."

Top-5 vendors Lenovo, Huawei and Xiaomi all saw positive growth. Lenovo grew 77.9 percent year over year, shipping 24.7 million units and capturing 6.59 percent of the overall market. Huawei grew 41.7 percent to 23.5 million units, with a 6.25 percent market share. And Xiaomi grew 178.6 percent to 16.6 million units, capturing 4.42 percent of the market.

Shipments from all other manufacturers combined grew 33.1 percent in the quarter to 160.9 million units.

In a separate report, market research firm ABI Research pointed out that the fourth quarter saw the first quarterly sequential decline for the Android operating system. By ABI's reckoning, from the third quarter to the fourth, Android fell off 5 percent, dropping to 205.56 million units, from 217.49 in the third quarter. (In the same timeframe, forked Android fell 1 percent, to 85 million units from 85.47 million.) Meanwhile Apple's iOS skyrocketed 90 percent to 74.5 million units from 39.27 million in the third quarter.

"Google's Android is being attacked by Apple's iOS at the high end and forked Android and AOSP at the low end in high growth emerging markets. The Android One initiative has slowed forked Android and AOSP growth outside China, but Apple's success has taken the high end of the market away from certified Android's premium tier vendors," said Nick Spencer, senior practice director, mobile devices, ABI Research, in a prepared statement. "4Q 2014 has been a seismic quarter in the smartphone industry, and many premium tier Android vendors may once again review their operating system and therefore content and service strategies in light of Apple and forked Android vendor Xiaomi's success. Worrying times for Google's mobile services and Android, but it presents opportunity for other service providers and even operating systems."

According to IDC, for the full year, smart phone shipments in 2014 totaled 1.3 billion units.

Samsung ended the year essentially flat (up 0.6 percent) at 318.2 million units, representing nearly a quarter (24.5 percent) of the total market.

Apple came in a distant second at 192.7 million units, up 25.5 percent, representing a market share of 14.8 percent.

Huawei was an even more distant No. 3 with 73.6 million units (up 50.4 percent), capturing 5.7 percent of the market.

Lenovo came in third with 70 million units shipped (up 54.1 percent from the previous year), representing a market share of 5.4 percent.

And LG rounded out the top 5 for the year, coming in at 59.2 million units (24 percent growth) and a market share of 4.6 percent.

All other vendors shipped 587.3 million units, representing growth of 44.2 percent for vendors outside of the top 5 for the full year.

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