Apple iPhone Losing Market Share to Rivals

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Smartphone buyers may have picked up 31 million Apple iPhones in the second quarter, but that pales in comparison to the 72.4 million units sold by Samsung.

iphonesThe Apple iPhone fell way behind the market growth rate in the smartphone space in 2013's second quarter, according to IDC, which claims the popularity of cheaper devices is prompting market fragmentation.

The global smartphone market grew annually by more than half in Q2 – the highest year-on-year growth rate in five quarters, according to the analyst's Worldwide Quarterly Mobile Phone Tracker.

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Apple Inc's shipped 31.2 million iPhones over the quarter, posting annual growth of 20 percent – the lowest of the top-five vendors and well behind the market rate of 52.3 percent. IDC said some buyers may have held off in anticipation of a next-generation product launch this autumn, but that Apple is likely to accelerate growth again in future if it brings out cheaper models and carries on addressing the pre-paid markets.

The iPhone maker kept its second-place position behind Samsung, which held on to the top spot, taking almost a third of the market after shipping 72.4 million units, up 44 percent year on year.

Growth at the top was dwarfed by competitors LG and Lenovo, whose shipment levels both grew in the triple digits in Q2. ZTE's shipments swelled 58 percent year on year, while shipments in the "others" category jumped by 61 percent over the same period.

Kevin Restivo, senior research analyst at IDC, said the market is fragmented and that there is ample opportunity for other smartphone vendors to gain traction.

"The smartphone market is still a rising tide that is lifting many ships," he said.

For Q2, vendors in the "others" category shipped 100.8 million units between them, far more than Apple, Lenovo, LG and ZTE's collective total of 64.7 million.

Ramon Llamas, research manager at IDC's mobile phone team, said, "While Samsung and Apple accounted for significant share of the overall market, they were not the only vendors active in the high end of the market, and recent device introductions and upcoming launches signal more vendors targeting this space.

"Comparisons will certainly be made to the flagship Galaxy and iPhone models, but clearly the competition refuses to be shut out altogether." Samsung boasted record quarterly profit in its Q2 today, with profits swelling annually by half to $7 billion on sales which jumped 21 percent to $51.7 billion over the same period.

Earlier this week, Apple's third fiscal quarter results left the market underwhelmed, as the vendor reported flat revenue and declining client sales. It saw sales rose 0.8 percent annually to $35.3 billion, while net income slumped 21.8 percent to $6.9 billion.

Editor’s note:  As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

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