Apple Inc. Makes Big Gains in Market Share in the U.S.

As its largest market, the U.S. is key to Apple's (NASDAQ: AAPL  ) success. Fortunately, Apple's doing incredibly well in its home market. Sure, Samsung may be gaining market share among smartphone manufacturers in the U.S., but not as fast as Apple, according to a new report from NPD.

iPhone 5s.

Apple's soaring U.S. market share
Measuring installed base, iPhone ownership in the U.S. increased to 42% in the fourth quarter of 2013, compared to 35% in the year-ago quarter. Apple's seven-percentage-point gain easily trumped Samsung's gain from 22% to 26% during the same period. The only other manufacturer to gain market share on a year-over-year basis was LG, which registered a very small gain. All of the other top manufacturers NPD tracks saw a decline in market share. NPD bases its estimates on a survey of more than 5,000 U.S. consumers age 18 and older.

NPD isn't the only study to paint such an optimistic picture of the iPhone in the U.S. ComScore estimated in December that Apple had a 40.6% share of the installed base of smartphones in the U.S., while Samsung came in second at 24.1%.

The news that Apple is doing well in the U.S. shouldn't come as a surprise. Two separate reputable studies project Apple to gain market share in the U.S. over the coming years.

In April 2013, Yankee Group's Carl Howe projected that Apple will continue to gain market share in the U.S., with its platform eventually even surpassing Android. He cited the iPhone's impressive retention as one of the driving forces in his Markov projection. He explained Apple's potential eloquently:

Think of the Apple and Android ecosystems as two buckets of water. New smartphone buyers -- mostly upgrading feature phone owners -- fall like rain into the two big buckets about equally, with a smaller number falling into Windows Phone and BlackBerry buckets. However, the Android bucket leaks badly, losing about one in five of all the owners put into it. The Apple bucket leaks only about 7 percent of its contents, so it retains more of the customers that fall into it. The Apple bucket will fill up faster and higher than the Android one, regardless of the fact that the Apple bucket may have had fewer owners in it to begin with.

In another estimate, Asymco's Horace Dediu recently projected  that Apple's installed base could grow as large as 68% of Americans (aged 13 and older) by 2017.

The global picture
Globally, Apple's market share story isn't quite as optimistic. Apple's share of shipments in China during the August through October period in 2013 fell from 18.9% to 15.5% this year, according to Kantar Worldpanel. Among the other countries Kantar Worldpanel tracked, the iPhone share of shipments on a year-over-year basis also fell slightly in Germany, France, and Italy.

Notably, Apple's smaller year-over-year share of shipments in key markets like China doesn't mean Apple's iPhone shipments are slowing -- it just means Apple's growth in iPhone shipments in those countries is lagging the growth of the overall smartphone market.

While Apple's global markets are important, the Americas market is still Apple's biggest business driver. In the company's most recent quarter Americas revenue accounted for 37% of the company's revenue. Its second-largest operating segment, Europe, accounted for 21.3% of the company's revenue. That's why investors should be keenly interested in Apple's success in the U.S. Any negative turn in local sentiment toward Apple's products could meaningfully hurt the company's results.

Good news?
Definitely. Apple's U.S. customer base is the most familiar with the company's products. U.S. consumers' continued enthusiasm for Apple's iPhone illustrates the loyalty of Apple's customers -- a crucial facet of the long-term thesis for Apple stock.

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Read/Post Comments (14) | Recommend This Article (8)

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 January 20, 2014, at 11:16 AM, Zebraz1944 wrote:

    Come on guys - market share growth from 35% to 42% equals "12%"??

  • Report this Comment On January 20, 2014, at 11:56 AM, CraigWPowell wrote:

    "Is Apple Making A Comeback? A Historical Perspective" article with this heading

    published on Seeking Alpha on August 7,2013, by:

    I KNOW FIRST RESEARCH

    http://seekingalpha.com/article/1614472-is-apple-making-a-co...

    At publication day AAPL price was $464

    today AAPL@557, +20% gain in the period

    IMO it is still very beginning of AAPL road to the North in 2014

  • Report this Comment On January 20, 2014, at 11:58 AM, FrederickBoyle wrote:

    LOL, I stopped reading the article after that math.

    I really need to stop checking in on this site, MF is nothing but a marketing site for newb investors with articles written by fresh grads from finance looking to get clicks to pay off their student loans

  • Report this Comment On January 20, 2014, at 11:59 AM, CraigWPowell wrote:

    My typo AAPL @540.67, it is $76 gain per share

  • Report this Comment On January 20, 2014, at 1:03 PM, dwilh51183 wrote:

    EVERYONE WANTS TO OWN AAPL. ITS THE STATUS SYMBOL OF CHOICE.AAPL IPHONE'S HAVE 350% GREATER RESALE VALUE AFTER THEY ARE 2 YEARS OLD, SO BASICALLY YOU USE THE PHONE FOR FREE OR MAKE A PROFIT. WITH AAPL'S NEW PRICING STRUCTURE AND LEASE PROGRAMS, IPHONE'S ARE VERY AFFORDABLE ESPECIALLY IF YOU GET 3-4 PEOPLE ON A FAMILY PLAN. THAY ARE 95 CENTS TO BUY THE 5C FOR 2 YEAR PLAN. GREAT DEAL

    AWESOME PHONE

  • Report this Comment On January 20, 2014, at 3:32 PM, TMFDanielSparks wrote:

    Thanks for the catch on the error guys! Sorry about that. It's been adjusted.

  • Report this Comment On January 20, 2014, at 7:54 PM, kowkow wrote:

    The problem for Apple is that their real competition isn't a single manufacturer like Samsung - it is the Android OS. The worldwide market share of Android continues to grow without a hitch, while iOS continues to fade. That, combined with the fact that there are superior Android phones for much less money, is the reason that Apple's earnings are now declining for the first time in years. They're not going away, but the iPhone and iPad are gradually going the way of the Mac... wildly popular with their fan base, but a niche rather than mainstream player.

  • Report this Comment On January 20, 2014, at 8:27 PM, VegasSmitty wrote:

    Of all the people I know, not one owns an iPhone, so where are all these being sold?

  • Report this Comment On January 20, 2014, at 8:51 PM, aeosfool wrote:

    "Of all the people I know, not one owns an iPhone, so where are all these being sold?"

    I don't know who your friends are, but over 90% of mine own iphones and not one has switched to android, but that is just antidotal evidence.

    The reason, Android is growing faster than ios around the world is that many low feature entry level low cost phones have the zero cost android software on it...at least a version of android. I suspect ios will gain as those with android want more and upgrade when the time comes to ios...when the market expands rapidly like it has, there is usually a lot of cheap stuff making up the growth numbers. When a market gets more mature, ios will like reign supreme with those upgrading lie it is today in the US and Japan. Also, China is about to get a lot more competitive like Japan did last year and the cost of iphones are about to come down due to higher subsidies and creative financing.

  • Report this Comment On January 20, 2014, at 11:27 PM, Renee wrote:

    It's funny how you travel through Europe or Australia, and when you see someone using an iPhone, you're surprised. When you come back to the US, everyone has one and you get used to the sight again.

    I would say that about a third of my friends have iPhones, and most of those won't switch to anything else. Most of the other two thirds have Android, and would consider switching to something else, but very few would switch to Apple (they would consider Blackberry or one of the new OSs being developed, but refuse to go to the 'limited'/'constricted'/'ancient-feeling' iOS)

  • Report this Comment On January 21, 2014, at 7:15 AM, pbcla wrote:

    The majority of the folks I associate with all use iPhone or iPad. I like how all my Apple devices integrate. That's pretty much it. Apple is overbearing on developers (of which I am one). But so be it. That's where the money is in the app stores.

    Yes, Android phones can be spectacular or cheap. That's why they sell well world-wide. Not many in China making $3,000 a year are going to be able to afford an iPhone. Nor will they buy a Ferrari or name brand clothes or DVD's that aren't a knock-off. So I'm not sure the # of devices really means much as far as which is "better." That's a debate that can't be solved. In the end, It's about money and profit. Apple is raking in the money on devices and in app and media sales.

    I don't get the people who treat this like their religion, fuming if someone doesn't like their device. I have a Nexus 7 2nd Gen and other Android devices but just prefer the simplicity of iOS. Sorry I don't like your religion. It's just a computer. Who cares?

  • Report this Comment On January 21, 2014, at 9:30 AM, nitewing wrote:

    I love the religion comparison and couldn't agree more with your comment "pbcla" - -

    It's as though people are campaigning for their individual platform, as though that's going to affect their satisfaction with it! Buy what you want and let others do the same without the feud. I like Porsche, you like Ferrari...he likes Ford, she likes Chevy. We both lay down our money and choose what we want.

    In the end, I think those who continue to berate Apple are actually those who are betting against the stock (or FOR an Android company's stock) or they are bitter because they didn't invest in AAPL 10 years ago.

  • Report this Comment On January 21, 2014, at 9:34 AM, kowkow wrote:

    The headline makes it seem like good news for Apple. Read carefully. Apple's share grew 20%, Samsung grew almost the same, but Android phones together grew *more* than iOS. And that's just in the US. Worldwide, Android share continues to climb steadily while iOS keeps slipping. That's why Apple has, for the first time in years, *declining* profits.

    The reason behind Apple's slide is that while consumers still like their products, but are opting for more choice, plus they're realizing they can get superior devices for much less money.

  • Report this Comment On January 22, 2014, at 8:07 PM, adobbins wrote:

    I'm an AAPL shareholder, have Macs, iPods and iPad, but bought a Moto X from Republic Wireless (Android 4.3.2). After using it for the last month, I think the UI could be better, but I bought it because the phone is adequate (quite nice in fact) and inexpensive, made in the U.S., and the plans are inexpensive and flexible. I think it makes sense to own both AAPL and GOOG although not sure I would buy in at the present prices.

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