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Apple woes continue into second week

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Bad news generally comes in threes so Apple execs should not be surprised to learn iOS lost ground yet again on Android through the last quarter.

Last week, CEO Tim Cook gave an overview of the quarters activities which was less than enthusiastic and the team also decided to put the launch of its AirPods on hold. Telecoms.com was waiting for the third instalment of bad news on Friday, but alas it didn’t come. Never mind, Strategy Analytics came to the rescue this week with the estimation Android accounted for 88% of global market share over the course of Q3, at the expense of iOS and smaller rivals.

“Android’s domination of global smartphone shipments remained strong in Q3 2016, with a record 88% of all smartphones now running Google’s OS. Android’s gain came at the expense of every major rival platform,” said Neil Mawston, Executive Director at Strategy Analytics.

“Apple iOS lost ground to Android and dipped to 12% share worldwide in Q3 2016, due to a lackluster performance in China and Africa. BlackBerry and Microsoft Windows Phone have all but disappeared due to strategic shifts, while Tizen and other emerging platforms softened as a result of limited product portfolios and modest developer support.”

Apple still has a dedicated following, which does not seem to be the problem, it would appear those sitting on the fence or new customers are simply finding better deals. China is a prime example. Once a market where the iPhone was seen as a status symbol, Apple commanded a strong position is an increasingly affluent market, however recent months have seen the Huawei and Samsung claw away at this promising position.

With the US market also seemingly peaked for smartphone penetration, and cash-strapped consumer no longer willing to invest in new handsets as frequently, it would appear this former cash cow is starting to dry out for Apple. Smartphone sales did grow year-on-year, but it is not a throwback to the glory days, there are still big hurdles to overcome.

“Global smartphone shipments grew 6% annually from 354.2 million units in Q3 2015 to 375.4 million in Q3 2016,” said Linda Sui, Director at Strategy Analytics. “This was the smartphone industry’s fastest growth rate for a year. Modest smartphone regrowth is being supported by emerging markets with relatively low smartphone penetration across Asia and Africa Middle East, particularly countries such as India and South Africa.”

The earnings call last week highlighted the team are generating more cash from the services division, 24% year-on-year growth, which is an area which Cook and co. will need to capitalize on should Apple wish to remain as a major player in the technology world. Telecoms.com is not sure as to whether this can replace former glories, so further diversification, like it’s new TV App, will probably be needed.

Apple will not disappear in the near future, there are simply too many iLifers around the world, but the signs are showing the company is loosening its grip. The brand may remain as one of the most respected in the eyes of the consumers, it is in fact the most valuable brand in the world according to Brand Finance, but this is not being directly reflected in the money being brought in quarter-on-quarter.

Global Smartphone OS Shipments and Market Share in Q3 2016

Global Smartphone Operating System Shipments (Millions of Units) Q3 ’15 Q3 ’16 Growth YoY %
Android 298.0 328.6 10.3%
Apple iOS 48.0 45.5 -5.2%
Others 8.2 1.3 -84.1%
Total 354.2 375.4 6.0%
Global Smartphone Operating System Marketshare (%) Q3 ’15 Q3 ’16
Android 84.1% 87.5%
Apple iOS 13.6% 12.1%
Others 2.3% 0.3%
Total 100.0% 100.0%
Total Growth Year-over-Year % 9.5% 6.0%
Source: Strategy Analytics

5 comments

  1. David Hiskiyahu 03/11/2016 @ 12:48 pm

    Am I alone with this thought – would be happy to switch from iOS to Android, but my relations with people which prefer Facetime keep me back on iOS.

    Once WhatsApp video calls become available, Facetime will become redundant, because everyone I know is on WhatsApp.
    What will WhatsApp video do to Apple?

    Will the impact be as significant as I think it will be?

    David.

    • Jamie Davies Jamie Davies 09/11/2016 @ 1:49 pm

      Hi David – could be a killer blow from Facebook/WhatsApp – does kind of rely on whether Facebook/WhatsApp is able to negotiate the brewing storm of data sharing – users favour WhatsApp because there isn’t any advertising/its free – will the data sharing saga turn users off WhatsApp in the long-run?

  2. Luis Quezada 09/11/2016 @ 5:50 pm

    ¿Really Jamie? Frankly I don’t understand how journalists continue to focus on smartphones marketshare by units, when everybody knows that the vast majority of android devices out there are mere dumb phones that can’t compare to the real smartphones in the high-end, where the iPhone absolutely dominates.

    Have you ever used one of the Samsung devices in the mid to low-end that comprises the bunch of unit sales they have?
    They are absolute crap. User experience is awful, they’re slow to death, poor screens, cameras that stink, let’s don’t talk about the responsiveness in general, can’t be upgraded to new android versions, etc. Of course they are cheap and not everybody can spend >$600 for a high-end phone, so I’m glad they exist, but let’s not compare those to an iPhone.

    You focus on device numbers and, as many other journalists, don’t know – don’t want – don’t bother, to do some research and write about the revenue and profit numbers of that market segment.

    Apple now owns practically the total of the profits from the smartphone industry, even as it’s market share in relative percentage seems to shrink and android to gain.

    http://www.investors.com/news/technology/click/apple-iphone-grabs-104-of-smartphone-industry-profit-in-q3/

    Almost every year has been the same history, regularly having only Apple and Samsung earning real money from their smartphones businesses, but Apple taking the whole lot of it.

    Sure Apple has to be worried with iPhone cash-cow sales decreasing in units every quarter, but they are still taking all the profits that market segment has to offer, growing from 94% in 2015 to 103% in 2016. I’m pretty sure Cook and Co. are not loosing sleep because of this, as many like you think. ;-)

    • Scott Bicheno Scott Bicheno 14/11/2016 @ 2:09 pm

      Good rant Luiz. We are fully aware that Apple has accounted for the majority of smartphone profits for years, but market share is still relevant and Apple’s is falling. Incidentally I would back my Galaxy S7 over an iPhone every time.
      The reason it’s relevant to look at marketshare by units is to observe trends, as any impartial market observer should want to do. Apple’s share is declining and that’s interesting. No need to take it personally dude.

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