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iPhone Cedes Sales Crown to S III

iPhone Cedes Sales Crown to S III

Samsung seems to have found a sweet spot with the Galaxy S III. A combination of design and marketing piqued the world's interest and made it the best-selling smartphone in the third quarter. However, that period also was when the iPhone 5's release was imminent. The strength of both competitors should spur innovation and keep the market flush with new designs.

By John P. Mello Jr. MacNewsWorld ECT News Network
11/09/12 5:00 AM PT

The Samsung Galaxy S III knocked the iPhone from the world smartphone throne in the quarter that ended in September, but its reign may be short-lived. However, its design and marketing success could mean a perennial battle for the top of the heap.

Samsung shipped 18 million Galaxy S IIIs in the third quarter, and for the first time it became the world's best-selling smartphone, according to a report released Thursday by Strategy Analytics.

By contrast, Apple shipped an estimated 16.2 million iPhone 4S units during the period for a 9.7 percent share of the market.

While the S III's capture of 11 percent of the market was impressive, timing may have had something to do with the handset's comparative gains against Apple, as consumers delayed iPhone purchases during the period to await the release of the iPhone 5.

The S III has proven to be wildly popular with consumers and operators across North America, Europe and Asia, Strategy Analytics Executive Director Neil Mawston said. He predicted, however, that the S III won't be wearing the smartphone crown for long.

Timing Thing

Apple's iPhone 5, which went on sale at the end of the third quarter, has been selling well, Mawston explained, and it should reclaim the mantle of world's most popular smartphone in the quarter ending in December.

The S III appears to have hit its stride at the end of the iPhone 4S's product cycle, said IDC Senior Research Analyst Ramon T. Llamas.

"It's a timing thing," he told MacNewsWorld. "Moving ahead of the iPhone 4S is a testament to Samsung, but it's also a reflection of timing the market," he added.

These lead changes go back and forth with product cycles, explained Yankee Group Vice President Carl Howe.

"I think in Q4, you'll see iPhone regain its lead because of very strong iPhone 5 sales," he told MacNewsWorld. "In fact, intent to buy Apple smartphones in the U.S. exceeds that of all Android smartphones at present. We expect that to show up in market share in Q4."

More Samsung Marketing

Because the iPhone 5 is the newer phone, it should sell better than the S III in the fourth quarter, Llamas explained, but S III sales should remain strong.

"Around the time that the iPhone 5 came out, the Galaxy III sold well, too, because when people walked into a store and couldn't find an iPhone 5, they walked out with an S III instead," he said.

Galaxy S III sales were also boosted during the period by marketing, he added. He maintained that Samsung promoted S III more heavily during the quarter than Apple promoted the iPhone 4S. "When you put a lot of emphasis on one device and not a lot of emphasis on another, chances are you're going to see the one promoted more have more success," he reasoned.

Samsung has also taken a more commanding control over the look and feel of the S III than it has with its past smartphone models, said Reticle Research Principal Analyst Ross Rubin. That's improved its consumer mindshare.

With the Galaxy S II, he explained, the carriers had more to say about what their models of the phone would look like and even how it would be branded.

"The S III is essentially the same across all carriers and has that Galaxy S III branding," he told MacNewsWorld. "That has helped strengthen the brand in the minds of consumers."

Innovation Through Competition

To compete with Apple, Samsung and other Android smartphone makers have taken a page out of their competitor's playbook, Rubin said. "Handset makers and carriers are devoting more attention to fewer models, particularly because they've seen diminishing returns after stocking a fourth or fifth Android device."

That makes things simpler not only for the handset makers, but also for the carriers. "It's tough to compete for attention in a carrier's store with five or six handsets," Rubin reasoned.

The ascension of the S III during the third quarter is another sign that Android has become a legitimate competitive threat to Apple, according to Creative Strategies President Tim Bajarin.

That's a good thing for both companies, he told MacNewsWorld. "Their competition keeps both of them innovative."


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