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Apple Achieves 1.1 Percent Market Share, What Next?

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iphone-salesApple (s aapl) made good on a target set by Steve Jobs when he originally announced the release of the original iPhone in June of 2007. He wanted the iPhone to take 1 percent of global cellphone market share by the end of 2008, and according to at least two different market research firms, Apple has met, and surpassed that goal. That number puts it pretty much on par with HTC, who makes a large number of different handsets, and ahead of Sharp, who also offers many different models.

For the sake of reference, consider that Nokia still dominates the space, taking a whopping 38.6 percent. Research in Motion (s RIMM), makers of BlackBerry devices, also still outshine Apple, with 1.9 percent, which is up from 1.1 percent in 2007. So yes, technically, BlackBerry gained as much ground as the iPhone did in the same period, but Apple was also only really selling one device, while RIM has an entire line of products aimed at different categories of consumers. Also, the iPhone was only sold in 2007 from June forward, so Apple had less time to sell their product.

Now that they’ve reached their initial target, the next logical step would be to try to overtake RIM, their closest competitor. RIM has just released the Blackberry 8900, an updated version of their mid-level handset, targeted at users who don’t need the power of the Bold but do prefer the full QWERTY keyboard over the BlackBerry’s Pearl’s truncated keypad. To make big strides in the mobile handset market, Apple should aim for the Pearl and Curve market space, either by introducing a simplified, lower-cost iPhone Nano, or by releasing a brand new iPhone model, but keeping the 3G around at a discounted price.

8 Responses to “Apple Achieves 1.1 Percent Market Share, What Next?”

  1. Andrew, it seems everything you stated is what you want to happen as oppose to what will happen.

    I won’t even to bother to argue the nonsense about ipod/iphone sales.

    This is typical of armchair analyst, knowing what’s best for multi-billionaire companies without thinking they must have some sort of intelligence to be a massive multi-billion company in the first place.

  2. @ckd: While it’s true that no individual brand of lower-priced MP3 player has killed the iPod, the fact remains that the iPod only really dominates the US market (70% US market share). For the rest of the world it’s a different story. In fact, the most popular MP3 players out there are the standard cell phones with flash memory slots, which are found everywhere. That’s probably one of the reasons why Apple decided to develop a phone in the first place. iPod sales have actually gone flat since last year. However, iPod earnings are up because Apple’s getting high markup from sales of the new iPod Touch.

    iPhone sales over the holidays were below expectations, and as the world economy remains at a standstill, sales are likely to peak earlier than Apple expected. They will be forced to come out with a new iPhone model sooner, because the latest 3g touchscreens are significantly more powerful and have longer battery life than the iPhone 3G.

  3. The iPhone has one major hurdle – the Apple business model itself. Apple insists on high product markup, across the board. Each new iteration of the iPhone is going to be designed to maintain markup. That means that when the lower priced touchscreens begin to flood the third world markets Apple’s going to eat their dust. High-priced commodities are always relegated to a small niche market. Apple will make money, but at the expense of global market share. Their lack of variety will hurt them eventually, because right now they stand out as the ‘touchscreen phone’ that everyone’s heard about. Once the competition starts releasing their own versions at lower prices, the iPhone’s current appeal will inevitably be drowned out, because the novelty of the technology is more appealing to the globe than the phone itself.