Apple is now the world’s largest manufacturer of smartphones in revenue terms according to research firm Strategy Analytics. The California based vendor unseated Nokia from the top spot after both companies released sales figures for the first three months of 2011.

Reported total revenue for the iPhone,  for the first quarter in 2011, was $11.9bn compared to Nokia’s $9.4bn for the same period. Apple shifted a staggering 19 million handsets worldwide, over double the previous year’s 8.8m unit sales for Q1. The average price of an Apple handset sold to network operators is said to be in the region of $640 in comparison with Nokia’s $90 average per handset.

Apple… has gained [market] leadership of the smartphone market in just four years.

Apple’s successful strategy of introducing a new generation version of their market leading iPhone every 12-18 months has caused unprecedented demand for a single smartphone model. A combination of Apple’s unique application ecosystem, design and iTunes integration has meant it has gained leadership of the smartphone market in just four years.

Apple’s closest competitors have all attempted to replicate its fast-paced product development process, but neither Nokia nor Blackberry (manufacturer Research in Motion) have come close.

…Nokia will continue to suffer…

Nokia is ramping up its offensive on Apple’s success having signed an agreement with Microsoft whereby Nokia will manufacture handset hardware that will run Microsoft’s Windows software. Nokia says it will start distributing the new collaborative handset in 2012 but with demand for the iPhone 4 so strong, and the expected release of the iPhone 5 in September, Nokia will continue to suffer from a market perception that they are simply not capable of keeping up with Apple.

Speaking after Nokia’s Q1 results were released CEO Stephen Elop said he remains confident his company will be able to get back on track, “In the first quarter, we shifted from defining our strategy to executing our strategy. On this front, I am pleased to report that we signed our definitive agreement with Microsoft and already our product design and engineering work is well under way”.

…a “complete train-wreck” and “utterly useless”…

Research in Motion’s Blackberry had hoped to gain smartphone market share on the back of sales of the company’s new tablet PlayBook as it requires a Blackberry handset to be tethered to it to gain access to email and calendar functions. Critics have branded the PlayBook, RIM’s answer to Apple’s iPad, a “complete train-wreck” and “utterly useless” for the very reason RIM thought it would increase sales of the Blackberry: the PlayBook cannot be used without one. Fallout from its tablet offering, which only began shipping last week, has distracted RIM from developing their smartphone product beyond a touch screen Blackberry and looks likely to dampen any attack on the iPhone’s market-share.

Nokia and RIM’s woes leave just Google’s Android phones to compete with the iPhone. The Android platform is used by HTC, Samsung and Motorola handsets and is seen as the main threat to Apple’s new found dominance of the smartphone market. Android phones which accounted for just 23% market share in 2010 are expected to reach 39% in 2011 and 50% by the end of next year.

Android’s success is attributed to cheaper handset prices and a clean operating system…

“Apple’s proprietary ecosystem of hardware, software and services has proven wildly popular and hugely profitable” says Neil Mawston, Strategy Analytic’s director. “However, rivals are chasing hard, particularly the Android vendor community, whose global installed base of smartphones we estimate will exceed that of Apple’s by the end of 2011”.

Android’s success is attributed to cheaper handset prices and a clean operating system which has become a favourite with consumers who are familiar with Google’s open source software such as Gmail and GoogleDocs.

…Apple has received patent approval for a “teardrop” shaped profile…

Apple will attempt to further cement its leadership of the market with a rumoured September release date for the iPhone 5. While the physical handset was not expected to look much different from the iPhone 4, industry sources say Apple has received patent approval for a “teardrop” shaped profile, similar to that of the MacBook Air. Other features expected in the iPhone 5 include a rumoured 8-megapixel camera, an extended home button capability and the long awaited near-field communications technology which will enable mobile payments turning your iPhone into a credit card.

Releasing a new generation iPhone with added features every year has been Apple’s strategy to gain market share over the last four years and from the industry rumbling about the iPhone 5 it looks like their strategy isn’t about to change any time soon.

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