How Much Has the iPhone 5 Release Delay Hurt Apple Smartphone Sales?

The iPhone 4S is a nice piece of work, with a substantial performance improvement and feature set enhancement over the iPhone 4. The form factor, while a carryover from the previous model, is a classic, and while Apple opted to stick with the smallish (but very high resolution 3.5″ Retina Display, many users actually prefer the compact footprint for handholding and pocketing the smaller screen facilitates.

So far, the iPhone 4S has been a surprisingly strong seller, and deservedly so, but there are indications that the four month longer delay than many had been anticipating in rolling it out, plus the fact that it turned out to be an upgrade of the preceding model, however substantial, has blunted Apple’s smartphone market share advance in traditional markets.

Foe example, The Register’s Paul Kunert reports that smartphone sales trends “went backwards” in the UK during Q3/2011, with buyers abandoning both Nokia and Apple, with market analysts at Canalys reporting a decline in smartphone shipments of 7 percent and a market share realignment that saw beleaguered RIM’s
BlackBerry bucking expectations and taking back the UK smartphone sales top spot from Apple and Samsung roaring up from behind with a 178 percent sales increase in an otherwise soft UK market.

Meanwhile, according to the latest market report from Strategy Analytics, entitled “Samsung Becomes World’s No.1 Smartphone Vendor in Q3 2011,” global smartphone shipments grew 44 percent year-over-year in the third quarter of 2011 to reach a record 117 million units sold, but with Samsung displacing Apple in top spot as the world’s number one smartphone vendor. That iPhone 4S release delay and iPhone: 5 no-show coming home to roost?

Alex Spektor, Senior Analyst at Strategy Analytics, notes that “Samsung shipped 28 million smartphones and overtook Apple to become the worlds largest smartphone vendor by volume with 24 percent market share. Samsung’s rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution. Samsung has demonstrated that it is possible, at least in the short term, to differentiate and grow by using the Android ecosystem.”

Strategy Analytics Director Neil Mawston comments that: “After just one quarter in the top spot, Apple slipped behind Samsung to second position and captured 15 percent share. Apple’s global smartphone growth rate slowed to just 21 percent annually in Q3 2011, its lowest level for two years. We believe Apple’s growth during the third quarter was affected by consumers and operators awaiting the launch of the new iPhone 4S in the fourth quarter, volatile economic conditions in several key countries, and tougher competition from Samsung’s popular Galaxy S2 model.”

Another Strategy Analytics Director, Tom Kang, observes that “Nokia reached 14 percent global smartphone share in Q3 2011, more than halving from 33 percent in Q3 2010. The transition from Symbian to Microsoft as Nokia’s main smartphone platform has clearly been a very challenging process this year. The recent launch of the new Microsoft Lumia portfolio has helped to raise Nokia’s profile, and Nokia will be hoping the partnership with Microsoft can drive at least an L-shaped recovery in its global smartphone market share over the next few months.

That’s a big part of the reason why I’m increasingly of a mind that we’ll see an iPhone 5 (or maybe iPhone 6) unveiled at Apple’s June 2012 World Wide Developers Conference (WWDC), likely with the quad-core A6 CPU expected to debut in the next iPad refresh next March, and a completely redesigned form factor that will feature a somewhat larger display (although probably not as large as some of the Android competition).

Adding fuel to that line of speculation, Taiwanese industry-watcher journal Digitimes reported Thursday that Apple is planning to completely overhaul all of its product families, including iPad, iMac, and MacBook, along with the iPhone in 2012, with the first step to be finalization of order volumes pertaining to key parts and components for the next-generation iPad in by December, according to the customary unnamed sources in the upstream supply chain. However, Digitimes reporters Yenting Chen and Steve Shen think the next-generation iPhone and iMac are unlikely to be revealed until the second half of 2012, so if the insiders are right, my WWDC prognostication could still be a bit premature, but I would guess that the next iPhone rollout will definitely come by the iPhone 4S’s first anniversary in October. I’m still favoring WWDC, but what do I know?


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