Another Apple Market Share Rant

May 2nd, 2012

There are published reports this week that claim that Samsung sold more smartphones than Apple in the last quarter, reclaiming a number one position. Good news for Samsung; that is, if the news can be believed. You see it’s not based on any actual sales information from Samsung. According to one of those reports, “Since Samsung doesn’t report unit numbers, IDC and its competitors have to estimate how many devices the company sells.”

But those estimates aren’t even consistent. IDC estimated 42.2 million smartphone shipments for Samsung, compared to Apple’s 35.1 million number. Yet another firm, Strategy Analytics, pegged Samsung’s smartphone shipments at 44.5 million units, but IHS iSuppli said it was “only” 32 million. That figure, if true, would leave Apple in the lead, a position they earned in the previous quarter.

Now when you see estimates with that much variation, you have to wonder whom to believe. Besides, that Samsung might have shipped over 40 million units doesn’t tell us how many they actually sold to real people. That company wouldn’t be the first to flood the market with product to pad their totals. Besides, if Samsung’s smartphones really outsold the iPhone by such a huge margin, why aren’t they touting those numbers to the skies? Why keep it all a secret?

That behavior sounds suspicious, even if it’s normal corporate behavior. Certainly Apple doesn’t break down sales in as detailed a fashion as analysts might want, but at least you get actual totals for a product category; well, mostly. I don’t recall much being said about the third generation Apple TV.

Forgetting the uncertainty over whether Apple is number one or number two among smartphone makers, the real issue is whether it really matters. Just how many sales does Apple have to report to remain competitive in the markets in which they participate? Back in 2007, Steve Jobs said he’d be happy if the iPhone had 1% of the cell phone space by the end of 2008. As of the last quarter, the iPhone stands at 8.8%, although that, too, is based on an IDC estimate. So make of that what you will.

The same market share argument is being made about the iPad, which is consistently described as Apple’s market to lose. As more and more competitors appear, how will the iPad fare? Would the reports that makers of Android tablets plan to move to the low end hurt Apple, particularly among people for whom a starting price of $399 is perhaps a little too high? But it’s also reported that half of the current Android OS tablet sales may be attributed to the Amazon Kindle Fire. Yes, it’s an Android device, although the interface has been thoroughly customized by Amazon, so the connection is not readily apparent. For better or worse, the Android version Amazon uses is rather old as far as a mobile OS goes.

But some tech pundits suggest that Apple shouldn’t worry about Android as much as they should worry about that onslaught of Windows 8 tablets that’s due later this year. Of course, that assumes that Windows 8 ships on time, and even then, there’s no evidence whatever that Microsoft will find a silk purse in the sow’s ear this time. It’s not as if that highly-touted Metro interface has shown any serious traction on Windows Phone devices. Yes, Microsoft’s alliance with Nokia is said to signify a whole new ballgame. But Nokia’s stock has fallen to the junk level, and the new Windows Phone handsets, particularly the Lumia 900 being touted by AT&T, may be the only hope for the platform. If the Lumia 900 doesn’t demonstrate long-term success, how long will tech pundits and industry analysts tolerate the situation before they begin to recognize reality?

Oh yes, we don’t have any sales figures for the Lumia 900, just claims of sellouts the first week the smartphone went on sale for AT&T, with no specifics whatever. And nothing since then. Even a few hundred thousand units the first week would seem encouraging, so what is AT&T hiding? Well, I suppose the truth will be out there when they reveal their next quarterly results. Or will they pull a Samsung and hide the true figures?

I suppose the Mac may be considered the lone “vulnerable” area in Apple’s hardware arsenal, although sales were still somewhat higher than last year, and growth is ahead of the PC market. At the same time, the entire product lineup is in serious need of a refresh, and you will likely see new desktop and note-book Macs any day now. That should really boost the quarterly numbers for a while, and Apple has plenty of space to grow, considering the ongoing dominance of Windows.

But the greatest obstacle to moving Macs likely includes not just Intel’s processor roadmap, but the fact that more and more people regard an iPad is a suitable replacement for a PC. There’s no doubt there’s growing cannibalization from both the Mac and Windows markets.

However, this is all inside baseball. The real indicator of Apple’s ongoing success is year-to-year growth. If they continue to report substantial increases, they have to be taken seriously, even if there may be a company here and there that may — I said may — report higher sales in a particular product category.

If Apple’s sales flatten over time, and Apple has difficulty sustaining a decent market share on their key product lines, there’d be reason for some concern. But that doesn’t appear to be an immediate danger, even if some commentators want to convey a different impression.

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