Apple versus Samsung: Could the iPhone lose US market share?

Apple versus Samsung: Could the iPhone lose US market share? (Part 1 of 5)

Why new models helped Apple gain share in the US smartphone market

Apple gains share in the U.S. smartphone market

Recently, Comscore came out with a report for the three months ending January 2014, when Apple (AAPL) gained share in the U.S. smartphone market. Apple’s market share increased by a full percentage point from an average of 40.6% in October 2014 to an average of 41.6% in January 2014. Apple’s main contender, Samsung, also gained some market share, while Motorola and HTC lost some ground in this market, as the below graph shows. Motorola was recently sold by Google (GOOG) to Lenovo in a $2.9 billion deal.

US Smartphone marketEnlarge Graph

It’s important for Apple to gain market share in the U.S.

Market share gains in the U.S. smartphone market are always a good news for any smartphone maker. This is especially true for Apple, as it gets the majority of its sales from the U.S. As you can see in the below chart, Apple’s revenue contribution from the Americas was 35% as of the fiscal quarter ending December 31, 2013. So the U.S. market is very important for Apple, and even a 1% market share gain becomes important for the company.

Apple's revenue contributionEnlarge Graph

New models contributed to Apple’s market share gains

The U.S. smartphone market works on the principal of selling smartphones at a highly subsidized price for a two-year contract with smartphone users. Smartphone makers tie in with telecom providers such as Verizon (VZ), AT&T (T), and Sprint (S), which then act as a medium to sell smartphones at a subsidized price. We could attribute the market share gains for Apple to the September 2013 release of the iPhone 5S and iPhone 5C models in the U.S. and other markets. However, Samsung also recently announced its release of the competing Galaxy S5 smartphone.

Could Samsung’s Galaxy S5 threaten Apple, and could Apple could be losing the market share gains it made in the last quarter? To learn more about Samsung’s new release, the Galaxy S5, and its potential, read on to the next article in this series.

The Realist Discussions

  • JayTee

    The actual answer is that the latest iPhone is still relatively new. As it ages, Android will grow until the next iPhone. IPhone share peaks in November, December, and January then falls until the next model hits.

    Android is less cyclical as it is composed of more models being released throughout the year.