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Uh Oh: iPhone Market Share Slips

After claiming 27% of US smartphone market share in the last quarter of 2007, the iPhone has slipped to 20% for the first quarter of 2008. Where have all the iPhone buyers gone? Apparently to RIM and Palm (why!) who saw their market share increase in the same period. For Palm, the gains can be credited to the rise in popularity of the Centro and for RIM, well no one doubts their powerhouse status around these parts.

There could be plenty of reasons why iPhone market share has slipped. For one, the shortages could be a big part of the puzzle here, people aren't buying iPhones because there aren't any iPhones to buy. Another reason could possibly be educated consumers who realize that the iPhone 3G is imminent thus delaying their purchase. Not to kick the iPhone when it's down, but the price and carrier-locked nature of the iPhone could also play a role in its diminished market share.

Regardless, the iPhone is still driving smartphone interest and increasing the market's sales and its competitors are posting lower market share than a year ago. My personal take? I want to see device-by-device sales numbers. The iPhone is a one man army against multiple fronts from RIM and Palm yet still manages to be more than competitive. Narrow down the numbers and specifying the models could paint an entirely different picture.

Or maybe not. iPhone 3G to the rescue? What do you think?

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Uh Oh: iPhone Market Share Slips

7 Comments

Having one model on one carrier per country, that is often out-of-stock in major markets like NYC, on the cusp of a new model release that gets rock-star level attention from the media can result in a post-holiday quarter dip in share?
Seriously?
;)

BTW the numbers do not add up without US sales figures explicitly reported
iPhone: 1.7M on 6 carriers world-wide (rumors: smaller than expected European sales, larger than expected gray-market sales)
BlackBerry: 2.18M ?# carriers world-wide (rumor: broad & enthusiastic acceptance world-wide)

I personally feel it is a direct reflection on the 3G rumors and the —months long in some places— shortage that many stores are having. You can't increase your market share without selling phones, and if there are no phones to be sold...
I am more curious to see the Q3 and 4 market share/sales reports after the release of the 3G version. Especially in 3G heavy Europe where EDGE was one of Apple's largest hurdles. Europe is also a finicky place where Nokia has a dominance and their "good" phones, like the n95, don't require your first born child as payment.
Only time will tell how this turns out, but in all honesty, Apple doesn't need to dominate. They make good products and will continue to make good products, regardless of market share. Just look at their iMac line for a good example. It sells well enough, but it can't really match the sales of a common PC. That doesn't make it an inferior (far from it actually) product by any means, and I enjoy owning one just as much as I would if it were the number 1 seller. Apple has pretty much always catered a higher end product to a higher end user, and that can hurt overall sales figures.
This even holds mostly true for the iPod. Yes, it is pretty much the strongest selling MP3 player line ever, but that is for 2 reasons. The first is that it has numerous models catering to several price points. The second is that many uninformed people automatically associate MP3 player to iPod, and buy one without realizing that there are other alternatives.
Ok, I am drifting... My original point was just that the Q1 earnings are reflective of certain factors and Q2 will probably be more of the same. I don't think any real assessment of Apple's success (or lack thereof) can be determined until Q3/Q4 reports come out.

I know that for me the biggest reason has been the looming release of a newer version of the phone. I decided to buy one probably 6 months ago but decided to wait it out.

The only reason the Palm Centro is doing well is price. Its dirt cheap and just like in the desktop computing world, people buy devices, no operating systems. I would imagine very few know what OS, or even care, each device runs otherwise they wouldn't be buying Palm.

So, unsurprisingly, US market share reflects total sales:
Fiscal 2007 third quarter ended June 30, 2007
Quarterly sales: 270,000
http://www.apple.com/pr/library/2007/07/25results.htmlhttp://www.apple.com/pr/library/2007/10/22results.html
Fiscal 2007 fourth quarter ended September 29, 2007
Quarterly sales: 1,119,000
http://www.apple.com/pr/library/2007/10/22results.html
Fiscal 2008 first quarter ended December 29, 2007
Quarterly sales: 2,315,000
http://www.apple.com/pr/library/2008/01/22results.html
Fiscal 2008 second quarter ended March 29, 2008
Quarterly sales: 1,703,000
http://www.apple.com/pr/library/2008/04/23results.html
The unavailability in Apple stores probably didn't hit hard until (calendar) Q2 and I'd guess that that's probably not the major cause. iPod sales are very seasonal with a big peak in the holiday season quarter and the figures so far are consistent with the same being true (to some extent at least) for the iPhone.

As they say, there are lies, damn lies, and statistics! Year over year, Palm's share of the market was down from 23 percent to 13.4% and RIM's from 48.7% to 44.5%. In other words, Palm's share of the market was down by over 40% and RIM's by just over 9%. The iPhone's share, meanwhile, has gone from zero to 19%.
If I were RIM or Palm I would be taking little comfort from these figures, particularly with iPhone 2.0 on the way.