Last year, Strategy Analytics made the prediction that we may have approached “peak Android” for how big a market share the operating system may be able to attain in the U.S. market. Fast forward to today, and it’s clear that Android is continuing to grow worldwide — although its biggest OEM, Samsung, may be the one that has reached a ceiling of sorts. Figures out today from Gartner indicate that in Q3, Android accounted for nearly 82% of all smartphone sales in the period, and while Samsung has continued to remain in the lead, it is doing so with a flat marketshare of 32%.
Overall, there were 455.6 million mobile phones sold in Q3, up 5.7%, and smartphones are very much fuelling growth these days. Devices based on Android, iOS, Window Phone, BlackBerry and so on accounted for 250 million handsets, or 55% of the total. In comparison, last year’s 171 million smartphone sales in Q3 worked out to a share of just under 40% of the total.
It’s also a rise sequentially. In Q2, when smartphone sales overtook feature phone sales for the first time (by Gartner’s count, at least) the analysts gave Android a 79% share of the market. IDC also pegged Android share in that quarter as nearing 80%.
We are on track for 1.81 billion mobile phone sales for all of 2013, the analysts predict. But it also points out that there will be a little softness at the blurry edges of the category: those who are looking at larger screens may just opt for smaller tablets instead. “We will see several new tablets enter the market for the holiday season, and we expect consumers in mature markets will favour the purchase of smaller-sized tablets over the replacement of their older smartphones,” writes Anshul Gupta, principal research analyst at Gartner.
Some other notable points:
Overall mobile sales. Samsung’s smartphone prowess continues to mean overall leadership in the mobile market. It’s now at nearly a 26% market share in mobile, up three percentage points over the year. Despite all the doom and gloom at the once-might Nokia, the company remains number-two in overall rankings, albeit still a declining one. It sold 63 million units for a 13.8% market share, down nearly six percentage points on a year ago.
Apple, with its smartphone-only line of iPhone devices, is up by one percentage point to 6.7% of sales, or 30 million units. Remember, though, that this period precedes sales of the new iPhone 5 models, and the crucial holiday sales period. The key quarter to watch, to gauge how well Apple’s newest devices are doing, will be the one that we are in right now. “While the arrival of the new iPhones 5s and 5c had a positive impact on overall sales, such impact could have been greater had they not started shipping late in the quarter,” writes Gupta. “While we saw some inventory built up for the iPhone 5c, there was good demand for iPhone 5s with stock out in many markets.”
Smartphones. So why the lacklustre market share performance for Samsung? Part of it has to do with the relative strength of other players, of course, but Gartner also points to something else, too: Design, and some of the criticisms that have stayed with Android over the years that it is simply not as user-friendly as platforms like Apple’s iOS — or too clever by half, could be another way of putting it. (For reference on what it means to design a truly intuitive phone, read this essay/letter about Nokia and Apple.)
“While Samsung has started to address its user experience, better design is another area where Samsung needs to focus,” writes Gupta. “Samsung’s recent joint venture with carbon fiber company SGL Group could bring improvements in this area in future products.”
But Samsung’s flat 32% market share does not tell the whole story for the company in smartphones: they continue to grow handset sales in real terms, with 80 million smartphones sold in Q3 compared to 55 million a year ago.
Apple, in contrast, also grew in real terms to 30 million smartphones (up 6 million) but market share was down two percentage points to 12%. Interestingly, while Windows Phone is now a number-three in the platform rankings, its 3.6% share is so small that its biggest OEM, Nokia, is not showing up in the smartphone vendor rankings (Huawei, which mainly makes Android devices, pips it a 11.7 million units).
Nevertheless, Gartner is bullish on Windows Phone. “The winner of this quarter is Microsoft, which grew 123%,” writes Gupta, who says that the Microsoft deal to acquire the devices and services business is a good thing because it will “unify effort and help drive appeal of [the] Windows ecosystem.”
The other notable player in smartphones at the moment is Lenovo, which passed LG for the number-three spot with 12.9 million smartphones sold. If you are in the U.S. or Europe and surprised to hear about the success of Lenovo, that may be because most of its growth was down to its success in its home market of China, which accounts for 95% of its sales.
Regions. Indeed, Asia Pacific, and China specifically, remains a juggernaut for sales overall and the driving force behind Android in particular. Gartner estimates that a full 41% all Android sales in Q3 were attributable to mainland China, versus 34% a year ago. It remains a very national shop, with the exception of Samsung (which is in the lead) among companies like Whitebox Yulong (9.7% market share) and Xiaomi (4.3% of sales, rising well from 1.3% a year ago). Asia Pacific saw a 77.3% increase in mobile sales, Gartner notes, while other regions like Western Europe and the Americas are back to growth as well.