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The smartphone market is peaking
It's not just Apple taking a tumble in the smartphone market, apparently. IDC has published estimates for first quarter market share which not only suggest that shipments are virtually flat (up a mere 0.2 percent), but that the mobile landscape is changing rapidly. While Apple was the only company in the top five manufacturers to see a big hit, Samsung shrank slightly as well... and even the Chinese contingent is shaking things up a bit. Huawei is still sitting comfortably in third place, but Lenovo and Xiaomi are out of the top ranks -- instead, it's the popular but not-quite-household names like Oppo and Vivo (both owned by BBK) that are storming up the charts.
Detachable tablet sales are taking off
The tablet market might be tanking as a whole, but there's apparently one major bright spot: tablets with detachable keyboards. While IDC estimates that slate shipments were down almost 14 percent year-over-year in the fourth quarter, shipments of detachables more than doubled to 8.1 million. That's about 12 percent of the entire space, folks. Analysts suspect that many people want to treat tablets as PC replacements, and they're willing to pay a premium to make that happen.
PC shipments see their steepest drop ever
Windows 10 might be pretty popular, but it wasn't popular enough to rescue the PC business. IDC estimates that computer shipments actually fell 10.6 percent in the fourth quarter of 2015, making it the steepest year-over-year drop in history. In fact, shipments were scarcely any better than they were in the summer, when sales are supposed to be slower. Gartner's figures are slightly better, although the 8.3 percent drop is nothing to write home about.
Latest IDC wearable numbers show Xiaomi's continued surge
While there was no change in the top two spots for the Q3 2015 IDC wearable numbers, Xiaomi made a staggering jump. In terms of market share, Fitbit is still in the top spot with a 22 percent market share and 4.7 million units shipped in the quarter. The company's numbers were padded by the fact that a number employers are giving their workers Fitbit devices, including Target's order of 335,000. Apple remains at number two, where it debuted in Q2. Cupertino shipped 3.9 million units, aided by both the release of WatchOS 2 and its gadgets going on sale in more locales.
Windows 10 didn't stop PC sales from dropping this summer
Windows 10 may have breathed new life into your PC, but it didn't do anything to juice PC sales this summer. Both Gartner and IDC estimate that computer sales dropped several points year-over-year (between 7.7 and 10.8 percent) in the third quarter, right when the new Windows arrived. That's one of the steeper drops in recent memory, in fact. Not that it comes as a complete surprise. As the analyst firms explain, Microsoft's fast-tracked release left many PC makers shipping existing systems with Windows 10, which weren't going to drive demand as much as brand new models. You're not going to buy a months-old laptop just because it's running new software, are you? The big question is whether or not the wave of new Windows 10 PCs launching this fall will make a difference -- if there's still a sharp decline, the industry is really in trouble.
HTC cuts 15 percent of workforce amid weak sales
As expected, smartphone maker HTC has announced more layoffs, and the cuts are brutal. The company will let 15 percent of its workforce go (over 2,000 employees), due in large part to falling revenues and profits. Last week the company reported shaky financial results, which it chalked up to worse-than-expect sales of its HTC One M9 flagship. It's also facing an ever-tightening smartphone market and more competition, especially from Chinese companies like Xiaomi and Huawei. The layoffs are part of a company-wide realignment, and CEO Cher Wang -- who took the reigns from Peter Chou in March -- tried to put a positive spin on it.
Xiaomi retakes the smartphone lead in China as Apple slips
It looks like Apple's time at the top of China's smartphone heap was short-lived. Researchers at Canalys estimate that local brand Xiaomi has once again become the country's smartphone market share leader, snagging 15.9 percent of shipments during the second quarter of the year. In fact, Apple is down to third place -- one of Xiaomi's fastest-growing rivals, Huawei, claimed the runner-up spot with 15.7 percent. Samsung and Vivo rounded out the top five.
Shipments of 'white box' tablets overtake iPads
The hottest-selling tablets aren't likely to be iPads or Galaxy Tabs these days -- if anything, they're the cut-rate slabs you see in the back of the drug store. Strategy Analytics estimates that shipments of generic "white box" tablets (which typically run Android) overtook iPads in the first quarter of this year, claiming 28.4 percent of the market versus Apple's 24.3. The analysts largely chalk this up to consistently tepid iPad sales, but they also suggest that small, budget-minded tablet makers are having a field day. That's not totally surprising. Low-cost Android gear also dominates the smartphone market, and a lot of these tiny outfits operate in China, where price is more of a concern. You don't need a $500 slate just to watch video in bed, after all.
Giant phones are finally a big deal in the US
Extra-large phones have been hot stuff in some countries for a long while, but not so much in the US. The country must have had a change of heart in the past few months, however. Kantar Worldpanel estimates that gigantic devices jumped from 6 percent of American smartphone sales in the first quarter of last year to 21 percent in early 2015. Why? If you ask Kantar, the launch of the iPhone 6 Plus was partly responsible -- it racked up 44 percent of all supersized phone sales despite being just a few months old. The analyst group isn't saying much in public how other brands were doing, although it's safe to say that category pioneer Samsung grabbed a large slice of the pie thanks to high-powered behemoths like the Galaxy Note 4.
The PC market is shrinking again as companies stop upgrading
It's not a good time to be a PC maker... especially if you cater to the corporate crowd. Both Gartner and IDC estimate that the computer market shrank between 5.2 to 6.7 percent in the first quarter of 2015, in part because many companies stopped upgrading from Windows XP. Simply put, many of the businesses that wanted to modernize already have -- they're not propping up the market like they were for a good chunk of 2014. IDC goes so far as to claim that this was the lowest volume of PC shipments since the start of 2009, which is no mean feat given that the world was still reeling from an economic collapse at the time.
Apple now ships more smartphones than Samsung, if you ask Gartner
When we last checked in on the battle for the top spot in the smartphone market, Apple and Samsung were neck and neck. If you ask Gartner, though, it isn't quite so evenly matched. The analyst group estimates that Apple managed to edge past Samsung in the fourth quarter of 2014, shipping 74.8 million phones to Samsung's 73 million. That isn't exactly a cavernous gap, but it's been a long time since any research firm unambiguously declared Apple the biggest vendor -- over three years, if you're wondering. Having said this, the changing of the guard isn't completely surprising. Apple had two brand new iPhones in the fall to goose its sales, while Samsung was grappling with both surging Chinese competitors (including chart rivals Lenovo, Huawei and Xiaomi) and a flagship phone that was getting long in the tooth.
Apple is now the fifth-largest PC maker in the world, if you ask IDC
Apple is historically a small player in the PC world compared to many of its peers, but it may have just entered the big leagues. IDC estimates that the company jumped to 6.3 percent market share in the third quarter of the year, making it the fifth-largest PC builder worldwide -- a feat it hasn't managed in decades. It's still no major threat to heavy-hitters such as Lenovo (20 percent), HP (18.8 percent) and Dell (13.3 percent), but IDC believes that a combination of slight price cuts and improved demand in "mature" markets like North America have helped it grow in a computer market that's still shrinking.
Apple's own stats show iOS 8 upgrades have slowed to a crawl
Despite the introduction of custom keyboards, Notification Center widgets and lots more, Apple users aren't taking to iOS 8. According to stats displayed on the company's developer portal, the proportion of iPhone and iPad owners currently running the latest version on their devices stands at 47 percent, only an increase of 1 percentage point from two weeks ago. By this point last year, iOS 7 uptake was already hovering around 60 percent, according to analytics firm Fiksu. We can only speculate, but it seems likely a combination of very large install files, the bungled point updates, and the dropping of iPhone 4 support could be reason enough for many users to stick with what they know, for now. Or maybe they're just paranoid.
Most new Android phones sell for less than $200
Want to know a big reason why Android smartphones are virtually ubiquitous these days? Because many of them are very affordable, that's why. IDC's latest market share estimates show that 58.6 percent of Android phones shipped in the second quarter cost less than $200, many of them from surging Chinese manufacturers like Huawei, Lenovo and Xiaomi. Simply speaking, many in China and other developing countries can't (or won't) justify buying the expensive phones that thrive in regions like Europe and North America. It's no wonder that Samsung is losing the battle at the moment, then -- while the company has budget handsets, it's heavily invested in high-end hardware like the Galaxy S line.
Xiaomi, not Samsung, makes China's smartphone of choice
Xiaomi has been a significant contender in the phone world for a while, but it's now safe to say that the Chinese device maker has joined the big leagues. Canalys estimates that Xiaomi shipped more smartphones than Samsung in China during the second quarter of the year, making it the top vendor in its home country. Simply put, Xiaomi is a champ at making cheap yet desirable handsets -- its budget Redmi series has done a lot to boost sales, and even range-topping devices like the Mi3 (and now Mi4) are much more affordable than alternatives from the likes of Apple and Samsung.
Why IDC sales estimates are complete BS
Just last month we detailed why relying on marketshare predictions from research companies like IDC and Gartner often lead to disastrously off-base conclusions. Even more jarring is that these research firms can't even manage to put together semi-accurate sales figures during a current quarter. Just last week, Mac sales data provided by both IDC and Gartner during Apple's June quarter were laughably off the mark AppleInsider covered this in detail last week: Apple reported "strong double digit growth" in its Mac sales in the U.S., directly contradicting the earlier estimates published by IDC and Gartner that stated Apple's U.S. Mac sales fell year-over-year in the June quarter and calling into question the legitimacy of market estimates that the tech media uncritically presents as factual. How is it possible that these research firms are so damn wrong so damn often? Well, Philip Elmer-DeWitt earlier this week published a first-hand account from a former IDC employee who detailed some of the shenanigans that often go into producing the marketshare estimates and sales figures that are so often misrepresented as accurate snapshots of a particular market. Not surprisingly, it seems like the IDC folks do as little work as possible and aren't afraid to fudge the data when their findings would create "gross distortions." "So, the mantra became, preserve the growth rates; to hell with the actual numbers. Even the growth rates are fiction. The fudge is in the 'others' category, which is used as a plug to make the numbers work out. In fairness, we did do survey work, calling around, and attending white box conferences and venues to try to get a feel for that market, but in the end, the process was political. I used to tell customers which parts of the data they could trust, essentially the major vendors by form factor and region. The rest was garbage. ... "The industry itself was aware of these issues, but agreed to maintain the fiction because it was convenient. Most vendors kept their own numbers, but referred to IDC for public purposes. Thing is, real executives got real compensation based on our numbers. There were other games played, but that's for another time. Shameful.
Samsung's phone market share takes a bruising as Chinese rivals surge
Samsung warned that its smartphone sales weren't that great this spring, and now we have the numbers to show just what the company meant. IDC estimates that Samsung's smartphone shipments saw a rare year-over-year drop in the second quarter, taking it from a lofty 32.3 percent market share down to 25.2 percent. That's still enough to give it a comfortable lead, but a shock for a company which is used to growth. The cause, analysts say, is the rapid rise of Chinese brands that cut directly into Samsung's low-end business. Huawei claimed 6.9 percent of the smartphone space after doubling its shipments, thanks in part to heavy discounts on phones like the Ascend P7; Lenovo jumped to 5.4 percent on the back of both budget phones at home as well as rapid expansion abroad.
Apple tops the smartphone industry in brand retention
New research data compiled by Morgan Stanley Research (and relayed by Business Insider) reveals that when it comes to brand retention in the smartphone industry, Apple remains the top dog. On average, Morgan Stanley found that 90% of iPhone owners remain loyal to Apple as compared to 77% for Samsung and 58% for Nokia. The following chart exemplifies why analysts who put all of their eggs in the marketshare basket often make laughable predictions about Apple's prospects in the smartphone market. While marketshare data -- which by itself is prone to manipulation -- tells us how the smartphone market looks today, brand retention is an important metric in assessing what marketshare data may look like in the future. It's hard to take an analyst who is so quick to claim that the iPhone has peaked seriously. Not only does Apple have a proven track record of innovating and attracting new customers, its ability to keep existing customers within the Apple ecosystem outpaces its competitors.
The danger of using bogus IDC marketshare predictions to declare "Apple is losing to Android"
As anyone who follows the tech market closely can attest, marketshare predictions rarely play out as anticipated. To borrow a phrase from the political sphere, you might say that marketshare predictions are like cologne; fun to smell but dangerous to drink. Yet the blogosphere, for reasons that often defy explanation, are quizically all to eager to drink the empty and often contradictory marketshare predictions trotted out by an assortment of research firms. Normally it's easier to let comically vapid predictions pass on by, but when I stumbled upon a widely dissmineated Business Insider article that was picked up by both the AP and Yahoo Finance, I figured it was time call BS on the outlets that refuse to take IDC predictions with the requisite grain of salt. The article in question has a typically linkbait-esque headline, titled "The iPhone 6 Had Better Be Amazing And Cheap, Because Apple Is Losing The War To Android." I'll give you all a few seconds to finish rolling your eyes. Okay, welcome back. Now the basis for the article is an IDC research report which anticipates Apple's share of the smartphone market in 2014 will fall from 18% down to 14% while Android's share will increase from 78% to 80%. Looking even further out, IDC expects iOS marketshare to drop down even further by 2018 on account of growing Windows Phone sales. Now the problem with these marketshare predictions is that the technological landscape is moving far too fast for anybody to really make informed predictions about what the next five years will look like. It's why sportswriters don't predict who might win the NBA championship in 2018 -- there's simply no point. Players get traded, new stars emerge, the skill set of current stars may decline prematurely, injuries happen. In short, there are far too many variables and unknowns to take into account. The same applies with these smartphone marketshare predictions. As further proof, it's helpful to go all the way back to 2011 and see what IDC believed the 2015 smartphone market would look like. Funny, huh? In 2011, IDC's 4-year projection put Windows Phone marketshare at 20.9%. During the fourth quarter of 2013, Windows Phone sales occupied a 3.2% share. That's a huge miss, but not nearly as egregious as their prediction that BlackBerry in 2015 would enjoy a 13.7% marketshare. Today, IDC's marketshare forecast barely touches on BlackBerry as the handset maker's marketshare is now, by IDC's own estimation, at 0.6%. A lot can happen in four years. Think about it -- Tony Fadell now works at Google, Dr. Dre now works at Apple, and Steve Ballmer is no longer Microsoft's CEO but rather the owner of the LA Clippers. It's wild stuff, which is why following the tech industry is such an interesting endeavor. But in following the industry and churning out headlines that typically paint Apple as a company in dire need of help, outlets are doing their readers a disservice by not taking into account the quality of the messenger before relaying the actual message. As a final point, keep in mind that the fight for marketshare is obscenely overrated. Actual profits are much more important as marketshare figures are easily manipulated. To wit, RIM a few years ago began rolling out widespread "Buy 1 get one free!" deals for their devices. The result was an artificially inflated marketshare figure that belied the true market interest in BlackBerry devices.
Tablet demand hits a wall as many are happy with the devices they own
It looks like Apple wasn't the only tech firm to see its tablet business take a hit this winter; according to IDC, others suffered a similar fate. The analyst group estimates that overall tablet shipments grew just 3.9 percent year-over-year in the first quarter, a sharp contrast with the breakneck pace of the past few years. Amazon took a particularly severe blow, as its shipments dropped almost 50 percent. So what prompted the suddenly chilly market? If you believe researchers, many are happy with the devices they've got -- they either have a good-enough tablet or a big-screen smartphone that will do in a pinch. Simply put, there was no compelling reason to splurge on something new.
