Tuesday, May 10, 2011

Apple's iPhone Sales Report - Weak Economy Helps Apple, Hurts Rivals

Apple's iPhone gained significant market share, despite most rivals stumbling due to the faltering economy, highlighting that consumers are still willing to buy the iconic device, even when times are tough.

IPhone sales jumped 15 percent in the first quarter, according to research firm iSuppli, due in large part to the launch on Verizon, the largest carrier in the U.S. Meanwhile, rivals like Motorola and Nokia saw their shipments drop by 16 and 15 percent, respectively, pushing Apple Compaq nc6400 battery hp 484170-001 battery  to overtake Nokia and become the world's largest phone maker.

That's not surprising, and the anticipation surrounding the iPhone 5 suggests that consumer demand for Apple's products won't be dying down soon.

The Cupertino, Calif.-based firm's gains are even more impressive, considering Apple only sells two models -- the iPhone 4 and 3GS -- through AT&T and Verizon. Nokia, Motorola and Research in Motion, meanwhile, all offer several different devices in different price points on various carriers. Verizon alone carries five BlackBerry models.
But Apple has seen the growing surge of Android products slowly chip away at its market share. Google, unlike Apple, gives away its software to handset makers for free. The result is a large portfolio of products across a vast range of price points.

Google has largely gobbled up market share where Apple is not -- the mid-tier and low-end segments, especially large in emerging markets.

But according to analyst Michael Walkley at Canaccord Genuity, the heavily-discounted iPhone 3GS is outselling some new Android handsets Hp pavilion dv9000 battery  compaq 484170-001 Battery  , such as the HTC Inspire and Motorola Atrix, suggesting Apple would do well selling a cheaper, smaller version of the iPhone.

In February, Apple had reportedly started developing such a device, with a similar set of features as the iPhone 4 -- such as a 1-gigahertz chip and retina display -- but priced considerably cheaper in the $200 range. The device may arrive as soon as mid-year, or be delayed or completely scrapped, according to people familiar with the matter, since Apple routinely works on projects that may or may not reach the market.



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The poor economy may work in the Cupertino, Calif.-based company's favor, as rivals see sales slip due to shifting consumer spending habits and elastic demand. Meanwhile, Apple's brand though a bit pricey, is less affected by the slumping economy, underscoring its continued momentum in the smartphone sector.

The industry as a whole saw a 1.5 percent decrease from the last quarter, the biggest decline since the start of 2009. ISuppli expects the smartphone market to surge by 60 percent for 2011, suggesting things may get better for Apple, and to the relief of competitors as well.

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