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Samsung's Universe Includes Growing Galaxy Market Share
Samsung's Universe Includes Growing Galaxy Market Share
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
OCTOBER
29
2013

Apple may have posted a record quarter for iPhone sales, but the sheer volume doesn’t compare to what Samsung is seeing with its Galaxy line. Of course, neither company is complaining about its sales these days.

The smartphone market is exploding, growing 38.8 percent year-over-year in the third quarter of 2013. So says market research firm IDC’s latest Worldwide Quarterly Mobile Phone Tracker.

Vendors shipped 258.4 million smartphones in the quarter. That’s a new record for units shipped in a single quarter, beating the last quarter by 9 percent.

"The third quarter was up substantially over the previous quarter, which was also a record quarter for shipments, showing the real momentum of the smartphone market," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Price points have declined significantly, driven largely by low-cost Android solutions. This has helped China to become one of the fastest growing smartphone markets in the world, accounting for more than one third of all shipments last quarter. We expect this trend to continue going forward."

Samsung Still the Big Winner

The Android smartphone platform has created opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market, IDC reports. Vendors from outside the top five continue to control nearly half the worldwide smartphone market in terms of shipments.

But the big winner here is Samsung. Samsung maintained its leadership position, shipping more units than the next four vendors combined, according to IDC. Samsung's flagship models received the lion's share of attention, with more carriers adding the Galaxy S4, continued demand for the Galaxy S III, and the introduction of the Galaxy Note 3.

Apple's total volumes speak to the early success of the iPhones 5s and 5c, and the softening demand of older devices prior to the new models launching. The iPhone 5s lived up to the hype of the gold case and the fingerprint sensor, and the iPhone 5c with an array of colors. At the same time, limited usability on the fingerprint sensor and higher-than-expected pricing on the iPhone 5c drew mixed reactions. Still, IDC said, this did not prevent Apple from enjoying a record 9 million units shipped when they debuted.

Do the Numbers Lie?

We asked Michael Disabato, managing vice president of network and telecom at Gartner, for his take on the numbers. He told us the real story is not how many smartphones vendors shipped. The real story is how many smartphones the network operators actually sold.

“Take the number that network operators sold and subtract the number that was shipped and you have the number that is sitting on the shelf,” Disabato said. “People say, Android has more market share than iOS and I say, ‘So what?’”

Disabato wants to see like items compared to like items. In other words, he wants to know how many Android smartphones and how many iOS smartphones are actually in the consumers’ hands -- not just on store shelves.

“Samsung likes to say how many smartphones it shipped but they were not shipped to people that are using them. They were shipped to the wireless carriers,” Disabato said. “How many Samsung devices did the major network operators sell? That’s what you want to know.”

Beyond Samsung and Apple

"Beyond Samsung and Apple at the top of the rankings is a tight race of vendors trying to break out from the pack," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "In the third quarter of 2013, Chinese vendors Huawei and Lenovo moved past LG, and not far behind are two more Chinese companies, Coolpad and ZTE. Any of these vendors could change position again next quarter. But in addition to having close shipment volumes, they all have one key ingredient in common: Android. This has been a huge factor in their success, but it also speaks to the challenges of differentiation on the world's most popular platform."

Case in point: Huawei returned to the list of top five vendors after a one-quarter hiatus, narrowly beating out Lenovo and LG in IDC’s report. Less than a million units separate Huawei from the next two vendors, underscoring how tightly contested the market has become following Samsung and Apple.

Lenovo posted the largest year-over-year increase among the leading vendors, enough to push past LG to claim the number four position worldwide. LG slipped to fifth place, but nevertheless posted strong double-digit year-over-year smartphone growth of 72.2 percent, IDC said.

"Looking ahead, we anticipate strong momentum going into the fourth quarter, and another record quarter and year in the worldwide smartphone market," said Llamas. "With already strong growth in the third quarter and multiple vendors launching flagship models, the market will be poised to reach one billion units for the year. It's a significant milestone considering the market shipped just half a billion units in 2011. Moving forward, what remains to be seen is how the various companies and platforms will stay differentiated and relevant in the increasingly competitive market."

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