IDC: Apple Mobile Shipments Making Gains On Samsung

Apple's global smartphone shipments almost surpassed those of longtime mobile leader Samsung in the fourth quarter, a recent study by market research firm IDC revealed.

According to IDC, Samsung remained the leader in the worldwide smartphone market with a fourth-quarter 20 percent market share, but Apple's 19.85 percent share loomed closely behind.

IDC analysts pointed to the Cupertino, Calif.-based company's record-smashing holiday quarter as the driving factor behind its success, particularly on the heels of the September launches of the iPhone 6 and iPhone 6 Plus.

[Related: Apple Reports Record iPhone Sales, But iPad Sales Plummet]

"Beyond the record-setting quarter, a few impressive things stand out with regard to Apple," said Ryan Reith, program director of IDC's Worldwide Quarterly Mobile Phone Tracker, in a release. "First, at a time when average selling prices (ASPs) for smartphones are rapidly declining, Apple managed to increase its reported ASPs in the fourth quarter due to higher-cost new models. Second, the growth of iPhone sales in both the U.S., which is considered a saturated market, and China, which presents the dual challenges of strong local competitors and serious price sensitivity, were remarkable."

Meanwhile, South Korea-based Samsung is crumbling under pressure on one end from Apple's popular large-screen smartphones, and on the other end from low-cost Chinese manufacturers like Xiaomi and HTC.

IDC said Samsung shipped 75.1 million units in the fourth quarter of 2014, while Apple shipped 74.5 million in the same quarter, falling behind by a mere 200,000 units.

Michael Oh , of Boston-based Apple partner Tech SuperPowers, stressed that Samsung's Android operating system and services don't compare to the "cleaner" Apple user experience.

"I think primarily Samsung phone users are moving to Apple and the iPhone due to two factors," he said. "One is Samsung competing against two competitors: Both against Apple and the iPhone experience, and also against the Android experience with other manufacturers, like HTC. Two, when you're looking at what you're competing against, the Android operating system with Samsung services and apps are just not as clean as the Apple experience."

Apple's earnings call, which announced its sales of 74.5 million iPhones in the holiday quarter Tuesday evening, overshadowed Samsung, which posted mobile division profit as $1.8 billion in the fourth quarter, down 64 percent from $5 billion in the same quarter the previous year during its Wednesday earnings call.

Apple CEO Tim Cook applauded the strong unit sales during Apple's earnings call, emphasizing that the current iPhone lineup experienced the highest Android switchover rate, over the last three launches in the previous three years.

Samsung, meanwhile, has made several moves over the past few months in response to its continual mobile profit plunge, such as firing several high-ranking mobile executives and announcing the cut of one-third of its smartphone models.

Looking forward, Mobility Communications Business Vice President Park JinYoung said during Samsung's earnings call that the company expects its smartphone and tablet demand to continue to fall, but announced the release of devices Galaxy A5 and Galaxy A3 as possible profit-strengthening factors.

Samsung and Apple took the majority of the fourth-quarter smartphone market shipment shares, with the next highest shareholder, Lenovo, coming in third with only 6.5 percent shares.

NEXT: Migratory Customer Behavior Key Role In Shifting Mobile Shipments

Douglas Grosfield, president and CEO of Cambridge, Ontario-based Xylotek Solutions, said that Samsung needs to quickly focus in an industry where "the flavor of the day for consumers changes in a heartbeat."

"Samsung has gone through some major changes in the past few quarters, seeing limited success in several of their smartphone offerings, and great sales levels for others," he said. "They have a tendency to throw a lot of rice against the wall and see if any of it sticks. Apple has had some challenges adjusting to the loss of Steve Jobs, and Tim Cook has done a great job getting Apple on track while filling some awfully big shoes … This marks the first time they have had so many model options for a new generation of the iPhone, which says to me they recognize the need to have more diverse offerings, as they have not been immune to customer attrition either."

He stressed that consumers' unique functional needs and hunger for innovation played a key role in shipment outlooks for various companies.

"In our experience, consumers and the corporate markets alike migrate back and forth between platforms as the technology in each distinct camp drives innovation and functionality that meets their current needs," Grosfield said. "Frankly, much of the migratory customer behavior is driven as much by marketing prowess as by the differences in the technology itself."

PUBLISHED JAN. 29, 2015