Wednesday, March 9, 2011

Tracking the Smartphone Sweepstakes

By Barron's

ComScore released its most recent survey of 30,000 U.S. mobile subscribers yesterday, which indicated that there has been little grand shift in share between the major cellphone manufacturers.
Apple news has paraded all over the headlines, and not just the electronic gadget ones, with the release of the new iPad 2 last week.
That company's lock on the supply chain has helped to acquire short-in-supply, high-demand component parts and deliver product at consistently lower price points that have its main competitors thinking twice about their own pricing strategy.
And while attention has shifted to larger mobile devices, what of the iPhone in Apple's home market? And what's to be expected?
As is the company's custom, comScore (SCOR) released press  discussing the findings of its most recent survey of 30,000 U.S. mobile subscribers during the three-month average period ending January 2011.
In comparing this three-month average with the average of three months ending October, comScore found that there were little changes in market share between the major cellphone manufacturers, and Samsung [of South Korea] retains the lead in the U.S. with 24.9%, up 0.7% from 24.2% in October.
LG [of South Korea] followed with 20.8%, then Motorola Mobility with 16.5%, then Research in Motion (RIMM) with 8.6%, and finally Apple in fifth position with 7.0%. In addressing the U.S. market, Apple brings only smartphones and not the feature phones that the other leaders have to complement the product offering, and this shortcoming is reflected in Apple's paltry share.
Keep in mind comScore's standings are attained by surveying 30,000 users, a small percentage of the June 2010 tally of 292.8 million total of U.S. users according to the Cellular Telecommunications Industry Association (CTIA).
Although small, the sample is clearly significantly relevant. That said, we continue to prefer the data provided by Gartner (IT) as that data have a more concrete foundation behind actual manufacturer phone shipments.
Although the data might not be exactly precise, [they] did show that Apple's share of the market at 7.0% was relatively stable compared to the 6.4% in October. Interestingly, the 0.6% that Apple's share increased almost matched Research in Motion's 0.7% share decline from October to January.
It is especially interesting when considering an article published in ARN, a subsidiary of International Data Group (IDG) Publications, which claimed that Research in Motion expects a backlash to the iPhone's trendiness. According to Research in Motion, the popularity of Apple's iPhone is sparking a trend for users to move away from the handset.
The article cited a few anecdotes that implied that few cellphone newcomers would want the same phone their 60-year-old uncle is using. We are inclined to go by the data here in the U.S., given that the North American market is leading mobile phone development these days, and we clearly haven't seen data that support Research in Motion's claim.
Certainly Apple stands with small phone share, but the company's leading smartphone platform maintains great standing as an operating system as comScore's survey indicated that Apple retained the No 3 spot in the U.S. market with 24.7%...which was up 0.1% from 24.6% in October.
This small change substantiates the slight increase comScore said Apple's hardware increased on the quarter-over-quarter basis that share is measured.
We note the focus of this report is primarily to call attention to what should happen as Apple adds network operators outside its exclusive deals to its distribution channel.

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