The Q4 Results for Apple are now out. Apple finishes the quarter selling 16.2 Million iPhones. That seems like amazingly strong growth from Q3 (from 14.1 Million) ie 15% growth in just one quarter. But the industry grew far faster than that. Apple market share is receding.
We heard rivals like HTC, Samsung and Motorola report growth in one quarter from 30% to 50%. My model for the total industry growth suggests about 31% growth from Q3 to Q4. So where Apple had a market share of 18% in Q3 (historically, calendar quarter Q3 is Apple's best quarter which reflects its new iPhone launch sales), that has dropped to around 15% for Q4. Apple is doing well, but is not growing market share in smartphones, in fact it is bleeding market share again. We do not know the exact number until we have the final count of all smartphones sold in Q4.
For the full year, Apple finishes 2010 so tantalizingly close to RIM, less than one million smartphones behind (950,000 in fact) but Apple was not able to pass RIM yet, and RIM finishes 2010 in yet another year as the world's second largest smartphone maker (behind Nokia obviously). Apple finishes the year with 47.5 million iPhones sold. My model currently gives them about 15% market share for the full year (but that too needs the final numbers obviously before we know).
Note that in 2008 the Apple iPhone was gobbling up smartphone market share had 10% market share, which grew strongly to 15% in 2009. The perception by many especially in the USA, was that Apple was still growing in 2010, but the truth is, that Apple's 2010 market share growth has stalled. Now the growing smartphones are on the Google Android and Samsung bada OS platforms. Apple iPhone will finish this year at about 15%. I wonder how many analysts will bother to point that out. There seems to be a considerable dis-connect with what is market reality, and what is market perception, about Apple.
We also now know the final rankings of the first Top 5 in smartphone handset manufacturers (Nokia first, then RIM, Apple 3rd, HTC 4th and Samsung 5th) but do not know the full numbers yet for all of them until we hear from the remaining Q4 results. In smartphone handsets, Apple held its 3rd ranking. We also now know the final rankings for the first Top 6 of smartphone operating systems (Symbian first, Android second, RIM third, iPhone iOS fourth, the discontinued Windows Mobile fifth and the brand new bada sixth). Apple lost one ranking, Android leapfrogged both Apple and RIM to second place. I will be reporting all final 2010 numbers once we have heard from all.
In the Conference Call, Apple also reported on total cumulative iOS device shipments at 160 million units of iPhones, iPod Touch devices and iPads. Because we know iPhone and iPad numbers, we can calculate out the Touch numbers as well, which split out as 90 million iPhones, 55 milllion iPod Touch devices and 15 million iPads. While the iPad and Touch are not phones and don't count in the smartphone market shares, they are of interest to Apple related developers, similar to how Playstation Portable is of relevance to Playstation developers or Android TV and tablet sales may be of interest to Android developers etc. That is nothing extraordinary. The number of 160 million is misleading, because Apple (of course) reports only their cumulative shipments, not the installed base, which is a smaller number. Similarly we could list Nokia as having shipped over 3 Billion phones haha, while their active user base is only about 1.3 Billion. We can safely assume all iPads are still in use but not all iPod Touch devices and certainly not all iPhones. I use the best info I can find, and my current model shows iPhone active installed base at 68 million, iPod Touch devices at 44 million and obviously all iPads in use ie 15 milllion. That gives the iOS family an active installed base of about 127 million (not 160 million). I don't mean this as criticism of Apple, only as clarification for those who visit my blog, as I try to give the most clear numbers possible. If you want to know how many iPhone branded smartphones are in use today, I count it at 68 million. If you want to know how many iOS devices of any kind are in use, that would be 127 million. If you want to record for history how many they have shipped since the beginning, including devices no longer in use, that number would be 160 million.
Apple is by far the most profitable company in mobile (in all of technology in fact). It is performing very well as a corporation, and for a former PC company, it has executed a shift into smartphones brilliantly (something none of its other big 5 rivals, HP, Dell, Acer, Toshiba and Lenovo) have yet to do. Apple also has excellent growth in iPads, and keeps selling iPods and Macs. These other devices are very relevant to Apple as it builds an eco-system around iOS. For the smartphone market, however, the other devices are as irrelevant, as motorcycle sales are to Honda in counting its market shares as a car manufacturer. Only the iPhone unit sales are relevent, if we compare Apple to other smartphone makers (as I do on this blog).
This blog is NOT a blog about financial analysis, so we don't care to argue here what might be Apple's stock market value or compare its financial performance to rivals. I acknowledge clearly that Apple is the most profitable tech company in the world. Whoop-te-doo. This blog focuses on digital convergence, and the PLATFORM of the smartphone is the point here. So we focus (whether you agree on this as a valid view or not, its my blog and my rules) on market share - that is of interest to developers,and to readers of this blog. The iPhone market share is NOT GROWING. It has stalled a year ago (as I reported first, here) and been stagnant ever since. This trend in the iPhone market share is of great interest to those who develop apps and services. You can go to other sites to debate stock market valuations, I won't allow that discussion here.
Also one needs to keep in mind, that Apple is no longer the 4th biggest total mobile phone handset maker (something that it was briefly in Q3). For the full year 2010, Apple can not finish higher than 5th (Nokia, Samsung, LG and RIM are sure to finish the year selling more mobile phones than Apple), and may end up 6th or 7th, as we get the other final results from other handset makers.
Apple's full year 2010 handset market share of all mobile phone handsets (not just smartphones) is roughly 3.5% - which is very much in line with what is historically the market share of the Macintosh PC, and also very well in line with the iPhone's position atop the price pyramid of all handsets, as I report in the TomiAhonen Phone Book 2010.
For those who are curious if my forecast of the 'iPhone market share peak' is still viable, that magic number is 307.2 Million. If the total full-year 2010 unit sales of smartphones is less than 307.2 Million, in that case I would have been wrong. We will know in February when we hear the final numbers from Gartner, IDC, Canalys and Strategy Analytics (we use the average of their numbers here).