While investors are waiting for Apple (AAPL 1.27%) to report fiscal first-quarter 2014 numbers this evening, Kantar Worldpanel released market share sales numbers over the weekend that show some signs of iPhone sales losing steam around the world.
A bit of good and bad news
It's no surprise that Android's market share continues to grow, considering that Google (GOOGL 0.55%) gives away the operating system for free and there are hundreds of device makers using the OS on their phones. But Apple investors should look to the company's footing in key three sales markets -- the U.S., China, and Great Britain -- as good news in light of Android's expanding territory.
Kantar's Dominic Sunnebo said in statement, "Apple has lost share in most countries compared with this time last year, but importantly it has held strong shares in key markets including 43.9% in USA, 29.9% in Great Britain and 19% in China."
However, in a separate report earlier this month, Kantar said Apple had fallen to 43.1% of U.S. smartphone sales for the three months ended in November, which was down 9.9% year over year. So though its share increased slightly from November to December, it's still down more than 9% from the year-ago period.
Part of Apple's drop may come from the company's focus on high-end devices, while other companies sell a wide range of cheaper Android phones. While Apple has added the cheaper 5c, and many carriers offer the older iPhone 4S for a low cost or even free, Apple's devices are simply priced higher than Android devices. Apple sells the several-year-old 4S on its website for the unlocked price of $450, which is still $50 more than the recently released unlocked Moto X. Apple's pricing keeps the company's premium brand image, but it also inhibits the company from grabbing lots of market share in the low-end device range.
Rising competition
While market share gives investors a small glimpse into smartphone trends in different countries, it's the factors behind market share shifts that investors should really focus on.
For Apple, the rise of small smartphone vendors in China should be a bit troubling. Companies such as Xiaomi have made tremendous gains against Apple and are the cause of market share shifts in the country. Kantar said in its latest report:
In December, Xiaomi overtook both Apple and Samsung to become the top selling smartphone in China -- a truly remarkable achievement for a brand which was only started in 2010 and sells its device almost exclusively online.
Though Apple has a strong position in China, and just launched the iPhone on China Mobile, that position is nowhere near secure. Xiaomi's continued gains in the country will come at the cost of market share for both Apple and Samsung (NASDAQOTH: SSNLF).
Apple will also need to deal with Samsung and Google's recent agreement to share patents. The deal was just announced this past weekend and the details were sparse, but it's generally understood that the two companies will use the agreement to strengthen their place in mobile, which could ultimately hurt Apple.
Foolish thoughts
It's true that market share doesn't paint a full picture of how a company is doing, but it does lend a certain insight. In this case, investors can see that Apple is losing some footing in the U.S. and that strong competitors like Xiaomi will continue to press against the company in China. And with Google and Samsung teaming up even more than before, Apple may be looking at increasing competitive pressure in both countries.
