1 More Way Samsung Is Beating Apple -- for Now

Quite a few commenters weren't keen on the idea of grouping smartphones, tablets, and traditional PCs all together in one big computing bucket. Well, I'm not the only one who looks at the computing landscape through this lens.

Market researcher IDC has now released its latest report on connected device shipments in 2012, with the definition of connected devices including smartphones, tablets, desktop PCs, and portable PCs. When looking at the big picture, there were a total of 367.7 million connected device units shipped in the fourth quarter, bringing the full-year total up to 1.2 billion.

That total represents 29.1% growth in connected devices for the year, with quite literally all of that growth coming from mobile form factors.

Stop me if you've heard this one before
With smartphones now dominating the landscape in unit terms, in part due to their lower price and broad use cases, Apple (NASDAQ: AAPL  ) and Samsung are the top two connected device vendors, much like how the frenemies are the top two smartphone vendors.

In the third quarter, Samsung had a wide lead over Apple, with a total 21.8% market share of connected devices. At the time, Apple was only able to garner 15.1% of the broader market since many consumers were putting off purchases in anticipation of Apple product launches in the fourth quarter such as the iPhone 5, which garnered no shortage of media attention.

By year's end, the iPhone 5 and iPad Mini helped Apple surge to close most of the gap and finished the year neck-and-neck with its South Korean supplier.

Connected Device Vendor

Q4 2012 Units

Q4 2012 Market Share

Samsung

77.9 million

21.2%

Apple

74.8 million

20.3%

Lenovo

24.3 million

6.6%

Hewlett-Packard (NYSE: HPQ  )

15.1 million

4.1%

Sony (NYSE: SNE  )

11.1 million

3%

Source: IDC.

That's less than a 1% lead that Samsung was enjoying in the fourth quarter of 2012, although it was still ahead of Apple by 2.6% for the entire year. What's so striking is that much on the smartphone operating system front, the hardware market is becoming a clear duopoly.

With mobile platforms, Google (NASDAQ: GOOGL  ) Android and iOS now power 91% of smartphones shipped. With connected devices, Apple and Samsung were 41.5% of the market. That combined share is less, which is inevitable since the hardware industry is much more competitive than operating systems.

Sony has come out of left field and was able to rank within the top five smartphone vendors in the fourth quarter also, which was enough to earn it the No. 5 spot in the broader connected devices market. Even though its Xperia lineup of Android smartphones doesn't make headlines in the U.S., that doesn't mean they can't hold their own in emerging markets or in its home market of Japan.

Still, traditional PCs remain part of the picture, as evidenced by HP's ability to rank within the top five, despite lacking any meaningful mobile hardware offerings. HP may be about to step back into the tablet ring after its webOS debacle two years ago, as rumors continue to swirl that the PC giant is exploring an Android tablet. The shoe fits, since HP also recently launched its first Chromebook, so its relationship with Google is alive and well.

IDC doesn't believe that PCs can keep up with mobile device growth, in part because devices are cheaper and more expendable. Tablet average selling price, or ASP, fell 15% in 2012 to $461, which is undoubtedly a consequence of the consumer shift toward smaller form factors. That trend should continue into this year, especially with the introduction of the iPad Mini, as the iPad remains the dominant tablet out there.

With Apple and Samsung still locked in a heated battle for device supremacy, what could potentially tip the scales in favor of Cupertino? A low-cost iPhone. That's what.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2013, at 8:24 PM, tychicum wrote:

    Samsung makes a very nice toilet seat and Apple doesn't even have an entry in the market.

    The SAMSUNG Digital Bidet Toilet Seat Dryer SBD-935 is one of a kind!!!

  • Report this Comment On February 23, 2013, at 1:59 PM, ViewRoyal wrote:

    Here's another way that Samsung is beating Apple.

    As reported in Fortune today: Samsung smartphones have 3-times more technical problems than iPhones do.

    ;-)

  • Report this Comment On March 27, 2013, at 8:22 AM, st0815 wrote:

    So Apple in their strongest quarter was still behind Samsung in 2012. They had their newest products competing against the older Samsung products, but still Samsung increased it's market share from 14.6% in Q4 2011 to 21.2% in Q4 2012, while Apple stayed almost constant at 20.3% vs 20.1%.

    Now Samsung brings the S4 to the market which will be an improvement to the S3. How likely is it that it will stay at 21.2% with an improved product competing against Apple with the same product?

    Now on the plus side - a steady market share translates to a huge amount of growth, given that the market grew by close to 30%. A company which can keep hold of that market share is in an extremely good position. There are risks however, among them the push on margins.

    I currently don't own Apple stock, but I'm considering buying a small position again - however being an Apple cheerleader is anything but a helpful basis on which to make financial decisions. A bit more emotional detachment please - just because I like the device doesn't mean I need to buy the stock and vice versa.

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