John Paczkowski

Recent Posts by John Paczkowski

The iPhone Lost Market Share in Q4? Who Cares?

In its fourth quarter, Apple shipped some 8.7 million iPhones–nearly double the number shipped in the same quarter a year earlier and 18 percent more than it shipped in the previous quarter. Impressive gains by any measure. Interesting to learn, then, that the device actually lost market share.

According to ABI Research, the iPhone’s share of the worldwide smartphone market in Q4 2009 slipped to 16.6 percent from 18.1 percent in the previous quarter.

Now, while it’s certainly ironic to lose market share in a record quarter, it’s important to keep a few things in mind.

First, counting units sold is just one measure of a device’s success at market. Another measure worth considering is profits relative to revenue. And according to some analysis we’ve discussed here before, Apple (AAPL) claims an inordinate share of the handset industry’s profits.

Second, iPhone sales typically spike in the third quarter–the first full quarter after the latest iPhone launch (in this case, the 3G S), and then taper off slightly after that. They did so after the 3G debuted, and they’ll almost certainly do so again when the company launches the device’s next iteration.

Finally, the fact that Apple has managed to claim 16.6 percent of a market in which it had no presence whatsoever three years ago and that it did so with a single device is astonishing.

So, does loss of market share signify the beginning of a decline in the iPhone’s popularity or the profits it generates for Apple? Not likely.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work