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Another Strong Quarter for Samsung and Apple; Will It Last?

Another Strong Quarter for Samsung and Apple; Will It Last?
By Adam Dickter

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Apple and Samsung are generally fighting over the high end of the market, said wireless analyst Ramon Llamas. "There are reports of the high end of the market being saturated, but expectations are that a billion smartphones will ship this year," he said. "With that kind of growth, I don't think the high end will be saturated."
 


Strong sales of Apple's iPhones and Samsung's Galaxy S 4 devices are keeping the top two smartphone devices in a solid lead over rivals, second-quarter financial results show.

This week Cupertino, Calif.-based Apple announced sales of 31.2 million iPhones, a record for the second quarter and a sharp increase over last year's 26 million, fueled by the bargain of owning a 2011 iPhone 4S for just $99 with a two-year contract from major carriers, or a 2010 iPhone 4 for free with the same deal.

Strong Samsung Growth

South Korean manufacturer Samsung's numbers are more impressive since sales of its Android-powered Galaxy S 4 model alone are believed to have reached 26 million units, with total sales of 71 million smartphones, also including the Galaxy Note, Prevail and Exhibit. According to an analysis by one tech news publication, those numbers seriously trump South Korea's LG, with just 12.1 million smartphones sold, and Canada's BlackBerry (formerly Research In Motion), with 6.8 million.

Nokia, the primary maker of phones running Microsoft's Windows operating system, sold 11.1 million smartphones.

A report last month from research firm comScore showed a slight growth of 1.7 percent from Samsung in the three months from February to May among U.S. subscribers, from 21.3 percent to 23 percent, and a more modest gain for Apple, going from 38.9 percent to 39.2 percent. Motorola, LG and HTC all lost share slightly.

Looking at mobile operating systems, Android, for which Samsung is the primary vehicle, continues to outpace Apple's iOS, 52.4 percent to 29.2 percent, comScore said. BlackBerry was at 4.8 percent while Windows was at 3 percent.

"For BlackBerry it's a slow burn," said Ramon Llamas, a wireless analyst at IDC Research, who sees opportunity ahead for the struggling smartphone pioneer. "They have more device releases and higher distribution planned worldwide. Will there be a 'phablet'? Probably. Will there be a next-generation Z10? Probably. My hope is that we will see something in time for the holiday season. It's hard to believe they could leave that alone."

As for Finland-based Nokia, Llamas sees increasing quality in the Lumia devices, with an eventual shift toward screen sizes of 5 inches and above, and believes the company will eventually shift its full focus to that line. "I like the progress Windows has made," he said.

High-End Saturation?

As far as the battle between Apple and Samsung, Llamas told us the two giants are generally fighting over the high end of the market.

"There are reports of the high end of the market being saturated, but expectations are that a billion smartphones will ship this year," he said. "With that kind of growth, I don't think the high end will be saturated."

Still, Llamas sees it as a mistake to assume that Samsung and Apple devices will totally dominate the market by year's end.

"The Moto X is a very high-end device," he said, referring to Motorola Mobility's coming flagship smartphone, expected to be released next month.
 

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