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iPhone smartphone market share dips in Q4

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By Charles Starrett

Contributing Editor
Published: Monday, February 1, 2010
News Categories: iPhone

The iPhone saw its share of the worldwide smartphone market shrink in the fourth quarter of 2009, according to a new report. Citing data from ABI Research, the Wall Street Journal reports that the iPhone’s share of worldwide smartphone sales dipped from 18.1% in the third quarter to 16.6% in the fourth quarter, despite the fact that iPhone sales increased 18% to 8.7 million units during the same time period. According to the report, the overall smartphone market grew 26% in the fourth quarter, with Motorola introducing its first Android-based phones and Nokia Oyj increasing sales by 4.6 million units. The last time the iPhone lost market share was in the fourth quarter of 2008, suggesting that the dip in worldwide sales may be a cyclical occurrence based in part on Apple’s traditional mid-year iPhone introductions, which offer opportunities for competitors to release new models later in the year.

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Comments

1

Hold on: “The last time the iPhone lost market share was in the fourth quarter of 2008, suggesting that the dip in worldwide sales may be a cyclical occurrence based in part on Apple’s traditional mid-year iPhone introductions, which offer opportunities for competitors to release new models later in the year.”

I’d love to have been able to use this sort of statistical “analysis” in grad school. The problem with this explaining away of a drop in market share is that it ignores the total growth in the market. Sure, it’s to be expected that as Nokia, Motorola, Blackberry, etc., put out a new model that there will be intense sales for the new model. In the majority of cases, though, this functions as a zero sum exchange, just like most iPhone sales do - new model comes out, people look at their contract, and upgrade to the new model. The market isn’t growing in these cases, and any change in market share comes about because of people switching phone makers. For the iPhone to be losing two consecutive fourth quarters in a row, it means there’s more than just new models afoot, it means the rate of new smartphone customers adopting these new, non-iPhone choices is out-pacing the rate of new smartphone customers adopting the iPhone, full stop.

Only if the iPhone were somehow making up this loss in the intervening quarters does the explaining away begin to make sense, but the iPhone is simply losing market share. Q4 2007, it was holding around 28% for the smartphone niche, two years later after losing market share in the Q4 new phone adoption rush two years running, it’s down to less than 17% of the smartphone niche. That’s a significant drop in market share and cannot be explained away so blithely.

Posted by Code Monkey in Midstate New York on February 2, 2010 at 8:22 AM (PDT)

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