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INSIGHT: Why Apple can’t rest on record iPhone results

INSIGHT: Why Apple can’t rest on record iPhone results

“While Apple’s ascent is remarkable, it also serves as a stark reminder of how quickly fortunes can change.”

Apple has overtaken former market leader Microsoft – which includes Nokia's devices unit – to become the second largest manufacturer of mobile handsets in the world.

Nokia led the mobile handset market for over a decade but is now pushed out of the top two.

Apple's record iPhone results are also entirely premium smartphones while Microsoft's smartphone shipments represent just 21% of its 50 million handset shipments.

The mobile handset market is highly competitive with market leader Samsung holding 23% of the global handset market volume in Q3 - this compares to 12% of Nokia/Microsoft and 9% for Apple.

Chinese brands Xiaomi, TCL-Alcatel and Huawei as well as LG rounded out the top seven brands with approximately 4% market share respectively.

Apple now sits behind only Samsung in handset shipments, with Samsung still to report Q4 shipments, despite Apple only having entered the mobile phone market late in 2007.

“This is a very impressive achievement for a company with the highest average selling price per handset in the industry,” says Daniel Gleeson, Senior Analyst, mobile devices, IHS.

“Apple sells premium devices for over $600 each whereas the average selling price of a Nokia handset was 93% less at just $45.

During Nokia’s heyday it would regularly post quarterly shipment numbers in excess of 100 million, peaking at 133.5 million units in Q4 2007.

In that same quarter, Apple posted just 2.3 million shipments of its fledging iPhone product. It took Apple until Q2 2011 to ship more than 20 million in a quarter, when it also surpassed Nokia’s smartphone shipment volumes.

“Today's mobile handset market leaders, Samsung and Apple, do not have an unassailable position,” adds Wayne Lam, Senior Analyst, Mobile Electronics, IHS.

“Samsung is showing signs of weakness with its handset shipments flat for the past two years. Apple too must be wary of new competitive threats if it is to maintain its position.

“Both leaders risk losing share to the fast growing brands from China such as Xiaomi, Lenovo and Huawei.”

While Apple’s ascent is remarkable, Lam says it also serves as a stark reminder of how quickly fortunes can change.

“Nokia seemed impervious for many years at the top of the market, but has now hit a spiral of decline which led to Nokia to sell its devices business unit to Microsoft in 2014,” he adds.

“Motorola and Blackberry are two other brands that have suffered dramatic falls from grace in the past few years.”

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