iPhone SE could become Apple's emerging market play. Image source: Apple.

Slowly but surely, the global smartphone market is growing again. Growth has undoubtedly decelerated in recent years, even dipping into negative territory for the first time ever earlier this year, as developed markets reached saturation and sales in those regions transitioned toward upgrades instead of first-time purchases, but there are still many parts of the world where adoption is low.

Strategy Analytics has released its estimates for the third quarter on global unit volumes, and the market researcher estimates that worldwide shipments grew 6% in the third quarter to 375.4 million. Android continues to dominate the global landscape, and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) is growing its share at the expense of all other platforms. There were nearly 330 million Android handsets shipped, comprising 87.5% market share. Apple's (NASDAQ:AAPL) 45.5 million iPhones were good enough to grab 12.1% share -- down from 13.6% a year ago. All other platforms combined saw units fall 84%.


Q3 2015 Share

Q3 2016 Share










Data source: Strategy Analytics.

Specifically, unit growth is coming from emerging markets where adoption remains low, such as India and South Africa. Given Android's dominance at lower price points, it makes sense that the search giant is capturing these first-time adopters. Within the confines of Apple's premium pricing strategy, it's also trying to make iPhones more affordable, but the pricing disparity is still dramatic. Strategy Analytics notes that Apple didn't fare well in China or Africa last quarter.

A second opinion

The figures are comparable but slightly different than IDC's estimates that came a week ago. IDC pegged third-quarter units up just 1% to 362.9 million, with Apple grabbing 12.5% share. While Apple reported a 30% drop in Greater China revenue, local rivals like OPPO and vivo in the Middle Kingdom are enjoying breakneck growth. OPPO saw unit volumes surge 122% while vivo shipped about twice as many phones. Huawei also grew 23%, as its peers catch up.

Apple losing global smartphone market share isn't really a new phenomenon, and it has never been the company's goal to ship the most units. The iPhone maker is still the most profitable handset manufacturer in the world, precisely because it refuses to compete on price alone. That being said, it's still discouraging to see Apple miss some opportunities in emerging markets, an area where it has long been weak.

Maybe not now, but the iPhone SE has potential over time. At $400, the iPhone SE is the lowest price point that Apple has ever launched an iPhone at. That's still quite pricey in many emerging markets, where you can buy an Android smartphone for as low as $100, but think of the iPhone SE's $400 as a starting point. Over time, if Apple keeps the device in production and lowers the cost as it ages even further, it can become competitive.

Still, with these estimates out, you have to wonder what Apple is talking about when it brags about high levels of Android switchers on every earnings call.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.