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Summary:

Apple is winning the smartphone race and climbing the ranks of overall cell phone makers, according to new numbers released Thursday. But now that Apple has passed Nokia to become the No. 1 smartphone maker worldwide, what benefits does that honor bring to its customers?

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Apple is winning the smartphone race and climbing the ranks of overall cell phone makers, according to new numbers from IDC and Strategy Analytics released late on Thursday. So now that Apple has passed Nokia to become the No. 1 smartphone maker worldwide, what benefits can its customers hope to receive?

1. An ever-growing software library

Apple’s iPhone has been a hit with developers since before official third-party app support even launched. But now that it has the top honor among hardware makers, it’s more or less guaranteed that high-quality iOS software development will be of a level that competitors find even harder to match. Having the widest reach and being the most viable route for making money will do that.

2. Greater component control leads to lower prices

Apple’s ability to command good prices from suppliers grows as its smartphone business expands. It can place even larger orders, more effectively stocking its own coffers and leaving competitors high and dry. This means that the supply-level savings it can command will either trickle down to the consumer or, maybe more likely, that Apple will be able to equip future iPhone models with more-sophisticated technology sooner than its competition, who don’t benefit as much from a high-volume business that can offset per-unit costs.

3. Continuing efforts to stay on top

Apple wasn’t the only star of the show in yesterday’s reports. Samsung’s growth, especially when measured year over year (from 5.0 to 17.5 percent market share), was nothing short of astounding. If it remains on course, it could take away Apple’s newly won crown as the world’s top smartphone maker. But that’s a big if. First, Apple is set to deliver the iPhone 5 within the coming months, which is sure to change the mobile landscape once again. Second, Apple has expressed interest in pursuing lower-cost additions to the iPhone line, which would surely broaden its appeal. Recent rumors suggest such a device may arrive soon, and the timing is right; pre-paid plans are becoming more popular, and a cheap iPhone would likely have a considerable effect on Samsung’s advance.

For Apple, reaching the top spot is a virtue unto itself, in terms of the value to the brand and to stockholders. But it’s also a win for anyone who owns an iPhone now or is planning to own one in the future. For that reason, Apple fans should hope this victory isn’t short-lived.

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  1. Again with the market share comments…. What a lack of understanding.

    If everyone is selling exactly the same thing, sure. But Apple took 66% of the profit in the smartphone market this quarter. 66%. 4 of the companies making lots of phones LOST MONEY. The three others that did not, shared the remaining 33%…

    Just a thought.

  2. Michael W. Perry Friday, July 29, 2011

    Add another that is of mixed value: Increase scrutiny by government agencies here and abroad, particularly in Europe, home of the now troubled Nokia and Asia, home of many cell phone makers.

    Your “component control leads to lower prices” will be one of the more powerful reasons to intervene. Government agencies won’t look kindly on Apple getting a part for $49 when everyone else is paying $64. And they’ll be even less happy if Amazon can’t produce enough tablets to meet demand because Apple has bought up supplies of key components.

    High technology CEO geeks don’t seem to have a sense of history. They spent too much of their youth geeking and too little reading good books. They think history begins with them. Apple’s attempts to use its near-monopoly position (i.e. demanding 30% for in-app linking), is simply repeating the moves that got IBM, AT&T and Microsoft in trouble.

    Sadly, there’s perhaps noting worse in the long run for a business than to continue to be headed by a founder/CEO who has spent almost no time as a mere employee. Everyone needs a time in their life when they’re the underling being told what’s wrong with them. The sort of deference that a founder/CEOs gets isn’t good for either their egos or their business sense. The attitude that leads them to brave the impossible early in their careers later leads them to defy good business ethics, which creates corporate foes who bring in the feds.

    As Microsoft’s clash with the Department of Justice illustrates, being able to bully employees and crush competitors doesn’t mean you can whip the federal government, much those in far-away Europe. And by keeping virtually all its business in one city, Apple is making the same mistake that Microsoft made. In a clash with the feds, both have only the congressional delegation of one state to run interference for them. That’s not enough.

    Steve Jobs’ early retirement may help, but it may not change Apple’s closed and hubristic culture. It’s likely that even over a relatively short term ‘Apple’s magic’ will fade, much as it did with Microsoft. Never forget that fifteen years ago, it seemed that everything Microsoft touched turned to gold.

    It is said that one of Rome’s Caesars hired someone to accompany him in his chariot during a victory parade in Rome, where he was being adored by hundreds of thousands of cheering people. That someone was to continually whisper in his ear that he was mortal, that he was not God, that he too would die.

    We need that in our technological industry and not just at Apple. Someone also needs to be whispering into the ears of the executives at Amazon, Google, and many others.

  3. Boscu I. Boscowitz Friday, July 29, 2011

    It is depressing that a company which has shifted from a its former major focus on quality in the intellectual sense with some attention to style to a new stance of going aggressively and successfully for the consumer/superficial lowest common denominator. Obvious case in point: FCP X

    And worse yet, the controlling strong arm approach in the iOS world is disturbing. I hope you are right that they have long-term competition. I sure hope there’s something outside the Apple garden for the rest of us when it comes to free speech in the larger sense.

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