Apple: Does Samsung's Smartphone Market Share Gain Matter?

Apr. 30, 2015 9:15 AM ETApple Inc. (AAPL)INTC, SSNLF, TSM90 Comments

Summary

  • IDC has reported that Samsung shipped the most smartphones in the March quarter.
  • Samsung gained market share compared to the December quarter, while Apple lost share.
  • In this article, I look at the question of whether this change in market share is significant for the long term.

It came as a surprise to almost no one when IDC reported that Samsung (OTCPK:SSNLF) had "regained the lead" in global smartphone sales in the March quarter. Apple's (NASDAQ:AAPL) decline in smartphone market share relative to Samsung may not be as important as assumed, however. Other factors such as mobile device profitability and investments in product development may play a greater role in determining the outlook for these two companies.

A Closer Look at Smartphone Market Share

It has become commonplace to question IDC's accuracy and impartiality in reporting Apple sales, but I've chosen not to go there. Such "shoot the messenger" exercises are unproductive. And when IDC reported a virtual tie between Apple and Samsung in smartphone sales for the December quarter, I was more than happy to celebrate the news.

I also did a little dancing on Samsung's smartphone grave, which may have been premature. As of the December quarter results, I declared victory for Apple in the smartphone war with Samsung. Samsung came back in the March quarter with sales and market share increases in its smartphone business. But these were quarter over quarter increases rather than year over year.

I still believe Apple will ultimately triumph, but that's a little hard to prove at this juncture. So let's take a closer look at the market share results and do some comparison of quarterly results, in order to put IDC's information in perspective. As I usually do, I massage the IDC data a little to generate a "top five vendor" market share number rather than the total market share calculation that IDC uses.

This is one of the ways that my thinking about market share has evolved over the past year. IDC and other research firms naturally count all Android devices sales, usually lumped into an "other" category, even though many of

This article was written by

Mark Hibben profile picture
19.24K Followers
Balanced, expert investing strategies from a technologist's perspective
Mark has a masters in Electrical Engineering from USC, is an independent iOS developer, and blogs about technology trends and companies, the focus of his investments.

Disclosure: The author is long AAPL. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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