Analyst: Samsung Smartphones to Outpace Apple’s iPhone in 2013

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Apple rival Samsung will widen its market share lead over the iDevice maker in the mobile smartphone industry during 2013, according to market research firm Strategy Analytics, which spoke with Reuters early Friday. The Korean company’s broader product lineup with a wide range of features and prices will give it the edge over Apple’s relatively limited iPhone options.

Samsung 2013 Smartphone Lead

"We expect Samsung to slightly extend its lead over Apple this year because of its larger multitier product portfolio," Neil Mawston, executive director at Strategy Analytics, told Reuters.

In response to Samsung’s diversity advantage, the firm sees Apple considering the release of a a smaller, less expensive “iPhone mini,” as the Cupertino company did with its popular iPad tablet late last year.

Overall, the worldwide smartphone market is expected to grow 27 percent in 2013 to 875 million shipments, a steep decrease from 2012’s 41 percent growth as many large markets have stabilized their adoption rates, according to Mr. Mawston.

Of that total, Samsung is expected to ship 290 million smartphones, up from 215 million last year and a 35 percent increase year-over-year. Meanwhile, Apple will ship 180 million iPhones in 2013, an increase of 33 percent over 2012’s numbers.

With these new shipping estimates, Samsung is expected to take a 33 percent share of the overall global smartphone market in 2013, compared to Apple’s 21 percent share. Samsung and Apple took 31 and 20 percent of the 2012 market, respectively.

These predictions may change depending on the release cycles of the two companies, which are not yet known. Apple historically released a new iPhone each year, but component delays and a desire for a faster response to the market lead many to believe that Apple will adopt a 6-month release schedule going forward, with incremental “S” iPhones arriving each spring or summer, and major revisions scheduled for each fall or winter.

Regarding Samsung’s schedule, the company’s most popular smartphone, the Galaxy SIII, will be due for an update at some point during the first half of 2013, but the features, price, and schedule for the release are unknown at this time. Due to the nature of its business, Samsung may also unexpectedly introduce completely new product lines that will further diversify the market.

Apple is not expected to act on an “iPhone mini” project as long as its product line remains relatively simple and highly profitable, but another year of gains by Samsung may force Apple’s hand in the relatively near future, according to Mr. Mawston:

We think Apple will have to launch an 'iPhone Mini' at some point over the next three years to address the hundreds of millions of prepaid users worldwide that cannot afford the current iPhone. The iPhone 5 is growing fast and profitably right now, so there is little incentive for Apple to launch an 'iPhone Mini' this year. We expect the iPhone Mini to be more likely next year, in 2014 when ... Apple will be forced to discover fresh growth streams.

Samsung is expected to announce its first quarter earnings early next week, with Apple following by reporting its quarterly results on Wednesday, January 23 at 5:00 PM EST. The Mac Observer will provide live coverage of Apple’s report.

Teaser graphic made with help from Shutterstock.

Comments

Constable Odo

I’m really puzzled over Wall Street’s insistence that Apple has to keep up with Samsung in production rates.  I’ve never heard anything like Mercedes-Benz, BMW or Porsche needing to keep pace with Ford or Toyota for increased number of sales.  Apparently, Wall Street feels there is no room for a company that’s number two in market share.  As long as Apple increases its iPhone sales YOY, what difference does it make if Samsung is selling cheaper smartphones in higher numbers to BRIC nations.  It didn’t do Nokia any good.

These so-called analysts always have their own agenda when it comes to what Apple should do.  If Wall Street wants to continue to downgrade Apple on loss of market share alone, then that’s the way it has to be.  It’s not necessarily going to stop Apple from making large amounts of revenue.  As an Apple shareholder, I’m not entirely happy that Apple’s share price is now highly dependent on market share but I think Apple should stick to running the company based on profits.  As long as Apple remains internally wealthy as a company, it probably doesn’t matter how Wall Street values Apple.  Apple should just keep piling on reserve cash for years and divvy it out in dividends if Wall Street isn’t going to value Apple shares fairly.

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