The High-End Smartphone Market’s Saturated? Not for Apple.

Published on July 24, 2013
by John Paczkowski

TimCookJazzHandsIf the lucrative high end of the smartphone market is nearing saturation, as some observers have recently argued, Apple isn’t seeing it.

Reporting third-quarter earnings Tuesday after market close, Apple said it shipped 31.2 million iPhones during the period. And while that number was down from the 37.4 million the company shipped in the second quarter of this year, it was up significantly from the 26 million it shipped in the year-ago quarter.

Indeed, according to CFO Peter Oppenheimer, that 20 percent increase in iPhone sales from a year earlier beat Apple’s internal expectations. And that’s a metric that belies — to some extent — concerns about just how much room for growth remains in the smartphone market’s higher end. Certainly, Apple seems to think that there’s plenty left. Speaking on a conference call with analysts Tuesday afternoon, CEO Tim Cook dismissed the idea that the high-end smartphone market is nearing saturation.

“I don’t subscribe to the common view that the higher end of the smartphone market has peaked,” Cook said. “I don’t believe that, but we’ll see.”

In the meantime, Apple will continue to focus on the high-end smartphone market, where Cook said there are still plenty of catalysts for growth — not just new products and services.

“We have all sorts of opportunities to increase distribution from carrier relationships to expanding our retail stores,” Cook said. “We also have room for market expansion in enterprise. I think we’re at the very front end of that, and so I think we have lots of growth opportunities.”

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