Apple sold a record 37 million iPhones in the fourth quarter -- 17 million more than it had ever sold in any other quarter. By last December, 44.5% of all smartphone buyers in the United States were choosing iPhones, up from 25.1% last October.
Is this popularity a good thing? Maybe, maybe not.
"All of a sudden, every teenage girl has an iPhone," said Mr. T. Michael Walkley, an analyst at Canaccord Genuity. "The real danger is that Apple becomes so mainstream that there is a breakaway by consumers to something new," reports the New York Times.
Indeed, those in the market for a device other than the iPhone have plenty of alternatives. Apple's rivals, which include Samsung, Huawei, ZTE, and others using the Google Android operating system "are making smartphones for much less, and the iPhone is becoming ubiquitous, threatening its cachet."
Many competitors displayed their new models at the Mobile World Congress in Barcelona, a phone trade show, to highlight their smartphones' unique features. One standout debut was Nokia's 808 PureView smartphone that boasts a 41-megapixel/1080p camera.
Competitors are also working to keep prices below that of Apple's iPhone. Apple was not present at the trade show.
Given the competition, Mr. Walkley is cautious about Apple's ability to retain its position as the lead supplier of smart phones over the next 5-10 years. Mark Newman, the director of mobile research at Informa Telecoms and Media, adds "Apple is focused on defending the high end of the market... Competitors, such as the Galaxy from Samsung, are starting to catch up. I think it is inevitable that the margin pressure increases."
But before supposing that Apple's days are numbered, consider that the company has billions of dollars earmarked for continuing innovation and marketing. The company has yet to see any major branch of the brand go on the decline.
Business section: Investing ideas
Interested in exploring the smart phone market? Below, we've listed 10 of the biggest players in the industry.
Do you think the iPhone reign will last? (Click here to access free, interactive tools to analyze these ideas.)
4. AT&T: Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $179.83B
5. Vodafone Group: Provides mobile communications in Europe, Africa, the Asia Pacific, the Middle East, and the United States. Market cap at $143.74B
6. Verizon Communications: Provides communication services. Market cap at $107.98B
8. Siemens: Operates in the industry, energy, and health care sectors worldwide. Market cap at $91.93B
9. NTT DOCOMO: Provides wireless telecommunications services, packet communications services, and satellite mobile communications services in Japan. Market cap at $74.34B
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Rebecca Lipman and Eben Esterhuizen does not own any of the shares mentioned above.
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