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  • Apple — Destined to Become the Number One Smartphone Maker?

    November 14th, 2017

    For as long as Apple has been selling hundreds of millions of iPhones, it has always been compared to Samsung. That’s because Samsung sells more product than Apple, at least when it comes to smartphones. They certainly don’t beat Apple with tablets and smartwatches.

    The reason is simple: Apple builds a small number of iPhone models — though there are more of them this year with the addition of the iPhone X and keeping some older models in stock — while Samsung has loads of models ranging from the relatively cheap to high-priced gear. Indeed, the Galaxy Note 8 only costs slightly less than an iPhone X, but Samsung isn’t normally criticized for its pricing policies. Maybe it’s because of widespread discounts, or because it’s somewhat further removed from the magic thousand dollar threshold.

    Quarter after quarter, iPhones sell in greater quantities — often far greater — than any Galaxy smartphone, at least worldwide. And, no, I do not think total sales figures influence Consumer Reports magazine to grant Samsung smartphones slightly higher ratings even though, in several categories, the iPhone scores objectively better.

    Among smartwatches, Samsung Galaxy Gear also rates better than an Apple Watch, evidently because of a lower rating for “Readability in bright light.” Not having compared the two side by side, I couldn’t say. How about you, readers?

    In any case, there’s a published report that Samsung’s tenure at the top may be ending soon. According to estimated sales and market shares for the top six smartphone brands over the past year from TrendForce, after two quarters where Apple fell further behind Samsung, they might hit the number one spot this quarter.

    As you might surmise, that’s due to the apparent success of the iPhone X, which went on sale November 3rd, and remains backordered.

    In any case, Samsung’s share of the worldwide market has remained flat or eroded slightly over the past three quarters, according to TrendForce. It was 21.1% in the September quarter, whereas Apple, despite a slight sales increase, dipped to 11.5%.

    By the way, TrendForce is a Taiwan-based marketing intelligence firm that counts many major tech companies among its clients, including Amazon, Apple, Dell, Google, HP and Intel. But not, based on their posted client list, Samsung.

    For this quarter, TrendForce estimates the iPhone’s market share at 19.1%, and Samsung’s at 18.2%. I suppose there’s also the potential for keeping that status as Apple manages to sync iPhone X supplies with demand through early 2018.

    Now don’t forget that Apple doesn’t often sell more gear than other companies in any single category. The Mac has never been number one, not even close. The iPod did capture a big majority of the digital music player market, and I suspect that was largely due to the fact that competing products were, by and large, so bad.

    With smartwatches, the Apple Watch has been judged against Fitbit, even though they are only in the same category when you place them in a “wearables” category. Even then, with Apple’s claims of steady double-digit growth, the Apple Watch may now be ahead even when you keep the broader category.

    Up until now, the iPhone has been at the top of the heap only on the basis of individual models, not the company’s entire smartphone output. That this might be changing this quarter is indeed a stellar achievement for Apple, especially if you consider all the skepticism and fear mongering about the iPhone X (even when it was referred to as the iPhone 8) for over a year.

    In fact, you can only imagine that a product that has been denigrated so consistently would end up being a smash hit except in a perverse way, that publicity, good or bad, is somehow a positive thing. But now that the iPhone X has been reviewed favorably by a number of tech and mainstream media outlets, and has gotten high ratings from customers, its hit status seems assured.

    Published reports, in fact, have begun predicting what Apple might do next year. With the apparent success of Face ID, that means extending this biometric to other iPhones. According to industry analyst Ming-Chi Kuo of KGI Securities, who has a decent track record about such matters, Apple is going to offer an even larger version of the iPhone X next year, with a 6.5-inch display, plus a 6.1-inch version of the LCD iPhone Plus. By removing Touch ID, its bezel will also be narrowed.

    Now this may be a devil’s advocate view, but having played with the regular and Plus iPhones, I don’t consider the side bezels to be particularly wide. As a practical matter, slight side bezels are enough to allow you to hold the iPhone without your fingers encroaching on screen real estate. The 16:9 aspect ratio is compatible with widescreen videos, whereas the 19.5:9 aspect ratio of the iPhone X is non-standard, and if you subtract the height (width) of the notch, you end up with a somewhat smaller image than the Plus.

    Do I make any sense?

    I’m not suggesting the iPhone X is inferior to the other iPhones, though. The two models have different tradeoffs, and it’ll be up to Apple’s customers to decide which is better for them. Of course, having a narrower bezel means the same sized display can be packed into a smaller package, or the same size case will accommodate an even larger display. That might be what the rumored 6.1-inch iPhone will be. Will it become the iPhone 9?

    And if the iPhone does gain the number one spot in worldwide smartphone sales this quarter, when its market share returns to number two or less, and it will no doubt happen someday, we’ll hear more “Apple is dead” nonsense.

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