updated 09:00 pm EDT, Mon June 20, 2011
Apple set to gain share when new iPhone released
The smartphone market is continuing to grow, and Apple is well-poised to continue stealing share from its rivals both strong and weak, Needham and Company technology analyst Charlie Wolf reveals in his latest Wolf Bytes newsletter for investors. He predicts that Android's recent decline in U.S. market share will fall farther when Apple releases an upgraded iPhone on both of its major carriers -- and perhaps others -- now expected sometime this fall.
The report corrals recent figures showing smartphone shipments up nearly 85 percent in each of the two recent quarter, increasing the smartphone share of the overall cell phone market from 17.8 percent to 28.1 percent over the course of the last year. Wolf identifies the next major battleground for smartphones as being the pre-paid markets in the Asia Pacific and other areas outside the U.S. and Europe, predicting that smartphone customers will lure "feature phone" customers away with better pre-paid options and price breaks.
Wolf's report features charts showing the ongoing implosion of RIM and Nokia's shares of the U.S. and European markets, with the Blackberry maker falling from 37.8 percent of the U.S. market a year ago to 13.8 percent in the quarter ending in March. Nokia's European share also fell more than 20 percent in the same period.
Despite what he calls a "arguably tepid" launch of the iPhone 4, Wolf credits it (and perhaps the long-awaited availability of the white iPhone model on both carriers) with the small gains made in market share by Apple in the smartphone space, matching the slight decline in U.S. market share by Android, which went from 52.4 percent to 49.5 percent. The iPhone's share of the U.S. market jumped from 17.2 percent in December 2010 to just under 30 percent in March.
Wolf tells investors that in his opinion, "this is just the beginning" of Android's share loss in the U.S., as the migration of subscribers and new customers should continue when the next model iPhone is released. He believes that in addition to being available through AT&T and Verizon, Apple may also make the next iPhone available to other carriers such as Sprint and T-Mobile.
Others have speculated that when the new model is released, the "original" iPhone 4 may stay on as a lower-priced alternative, just as the 3GS does now (despite signs that it is being phased out). The significantly higher revenue model of the iOS app market, plus the higher-quality apps available in larger numbers will continue to keep Android's ability to gain U.S. and European share at bay, Wolf says.