Samsung Extends Lead Over Apple in Smartphone Market: IDC

Samsung and Apple dominate the smartphone market, doubling their market share over the past two years, IDC reports.

The success of Samsung€™s latest Android-based smartphone, the Galaxy S III, has helped it extend its lead over Apple and its iPhone in the ultra-competitive smartphone market, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. The report found Samsung and Apple have more than doubled their combined market share over the past two years, shipping almost half of the world's smartphones.

Overall, the worldwide mobile phone market grew 1 percent year over year in the second quarter of 2012, as vendors shipped 406 million units in 2Q12, compared to 401.8 million units in the second quarter of 2011. Vendors shipped 153.9 million smartphones in 2Q12 compared to 108.3 million units in 2Q11, however, the 42.1 percent year-over-year growth was one percentage point lower than IDC's forecast of 43.1 percent for the quarter.

"Samsung and Apple have quickly become the global smartphone heavyweights though both employ somewhat different approaches to the market," Kevin Restivo, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker, said in a press statement. "Samsung employs a 'shotgun' strategy wherein many models are created that cover a wide range of market segments. Apple, in contrast, offers a small number of high-profile models. While both companies have expanded their geographic presence in pursuit of market share, the two companies will inevitably come into greater conflict as both try to generate additional gains."

The report raised doubts as to whether the market would continue to grow, noting that the 2Q 2012 growth rate was the lowest since the fourth quarter of 2009 and raised the possibility that worldwide economic woes could put the brakes on smartphone sales. However, due to the central role mobile phones play in people's lives as an essential communications link, IDC said it expects long-term smartphone shipment demand to grow through the years.

"With half of 2012 behind us, vendors are looking ahead to 2013 and how key markets €“ particularly Europe and emerging markets €“ will play out," Ramon Llamas, senior research analyst with IDC's mobile phone technology and trends team, said in a prepared statement. "Despite recent maneuvers to shore up several countries within the Eurozone, the effectiveness of these efforts remains to be seen. Meanwhile, emerging markets will continue to be strong contributors due to their sheer size and growth trajectory, but how much they can offset potential declines in other countries is unclear."

Samsung topped the 50 million unit mark and reached a new quarterly smartphone shipment record in a single quarter, thanks to the launch of its flagship Galaxy S III handset and continued success of its smartphone/tablet hybrid device, the Galaxy Note. Apple posted an expected sequential decline last quarter, similar to years past, IDC said, noting the decline was not unusual, as iPhone shipment volume is highest in the first two quarters after its release.

Nokia saw demand for Symbian and MeeGo units decline, reaching levels not seen since 2005, though the company almost doubled its Windows Phone shipments from the previous quarter and Lumia sales have remained steady, even though Microsoft's Windows Phone 8 announcement will prevent current Lumia owners from upgrading to the new mobile operating system. HTC€™s strong performance in the Asia/Pacific region allowed the company to rebound, while ZTE climbed into the smartphone top five for the first time, thanks to strong sales of entry-level smartphones in China.