Apple announced earlier this week that its smartphone sales have continued to rise, growing 6.6 percent year-over-year to 37.4 million this past quarter. That might sound like good news for Cupertino—until you look at the comparable figures for Samsung. Reuters cites an IDC report showing that the South Korean giant’s sales leapt from 60 million to 70.7 million phones over the same period, more than Apple and its next three largest competitors combined. And of the top five smartphone makers by volume, Apple is the only one that has lost market share over the past year.
Apple can still point to its healthy profit margins, though they’re less healthy than they used to be. The iPhone is a top-end device, whereas Samsung boosts its volume by selling cheaper models alongside its flagship offerings. But quantity matters too. That’s because Apple is not just competing with Samsung for customers, it’s competing with Samsung and all the other Android-phone manufacturers for the attention of app developers. If the current trend holds, Samsung’s market share will soon double Apple’s. Eventually, more developers will start to wonder whether it’s worth it to build apps for two different operating systems if one is clearly establishing dominance.
There are some bright spots for Apple. iPhone users still use their phones more heavily than their Android counterparts. And AllThingsD’s John Paczkowski cites a Yankee Group survey that finds iPhone customers significantly more loyal to their brand than Android owners, which opens the door for Apple to turn things around with the right product. The Wall Street Journal recently reported that Apple is already working on a less-expensive iPhone that could launch later this year. That seems like the right move. But it also highlights once more how Apple is no longer the sole agenda-setter in the smartphone market. For once, it is the company playing catch-up.
Worldwide smartphone sales and market share in the first quarter of 2013, via IDC and the Associated Press:
Apple’s slice of the pie is shrinking.