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Mobile phone market share shifts to Apple in 4Q 2012

Shipments Share 4Q12 02.14.2013Enlarge Graph

The iPhone 5 introduction in the fourth quarter of 2012 helped shift some market share to tech giant Apple (AAPL) in the most recent International Data Corporation (IDC) survey released last week. While the shift was marginally in favor of AAPL, the mobile phone industry is still composed of just 3 major players including Samsung, Nokia (NOK), and the aforementioned tech giant from Cupertino (AAPL).  These market share shifts tend to relay long term trends of the competitive dynamics within the mobile industry.

Shipments Share 2 4Q12 02.14.2013Enlarge Graph

As outlined in our recent article Smart phone shipments continue to gain on feature phones in 4Q, the composition of the global mobile phone industry is changing. What was once predominantly a feature phone market with 71% market share in units shipped just 5 quarters ago has now become a market with more equality with a 52% share for feature phones and a 48% take for smart phones.

With Samsung and Nokia both having substantial feature and smart phone offerings, these companies’ overall market share was relatively unchanged between 3Q and 4Q 2012, with losses in feature phone volume and share being made up with smart phone gains. Samsung held its share flat between quarters at 24% of total mobile phones shipped, while Nokia dropped 1 percentage point from 19% in 3Q to 18% in 4Q, as its overall business mix is still weighted to the feature phone market.

Apple was the only real standout mover in IDC’s new market share numbers, moving up from 6% of global share in 3Q 2012 to 10% at the end of the year. Whilst this market share sounds small for a market leader in the category, the 10% number is largely a result of Apple not having a feature phone product which blends its overall market share to below that of Samsung and Nokia. The iPhone 5 launch near the end of 2012, most definitely had an impact on the almost doubling of AAPL’s market share and with a rumored launch of a stripped down, cheaper iPhone, AAPL is likely to make continued advances up these statistics.

What is transparent from the IDC survey is that Samsung, Nokia, and Apple are the early leaders in the mobile phone category, the only 3 companies with over 10% market share comprising 52% of the global mobile market in aggregate. There are 7 players with under 4% share including Blackberry (BBRY) which registers at a 2% market share because of the substantial decline in its product life cycle and no feature phone category to boost results. With Apple stock now having reset investor expectations as outlined in our article Apple’s declining growth leads to shareholder disappointment and the rumored announcement of a lower end smart phone, AAPL’s market share and stock price could head higher from current levels in unison.

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