Apple Finally Beats Samsung as the Largest…

The Mac maker is celebrating another victory in the battle for world domination. World domination of the smartphone market, that is. According to a new report by Strategy Analytics (via TechCrunch), Apple AAPL surpassed Samsung as the world's largest smartphone vendor in the fourth quarter. While this development isn't too surprising, it is somewhat impressive. Whereas Samsung has given Apple a few headaches by dominating the world market, it has done so with dozens of different smartphone models. Apple, on the other hand, essentially only makes one cellular device: the iPhone. There may be older versions still on the market, but the same can be said for Apple's competitors, who also sell old and new models simultaneously. Samsung is also in the habit of launching several new phones within a very short period, a strategy that Apple has currently avoided. This gives Samsung the advantage in terms of variety since it expands the company's market potential. For Apple to come out on top anyway and sell more iPhones than all of the Samsung devices combined is pretty darn amazing. And Apple did so without the iPhone 5, instead relying on a revised version of the iPhone 4! “Global smartphone shipments grew 54 percent annually to reach a record 155.0 million units in Q4 2011,” Alex Spektor, Associate Director at Strategy Analytics, said in a company release. “Apple overtook Samsung to become the world's largest smartphone vendor by volume with 24 percent market share. Apple's global smartphone shipments surged 128 percent annually to 37.0 million units, as distribution of the iPhone family expanded across numerous countries, dozens of operators and multiple price points.” “While Apple took the top spot in smartphones on a quarterly basis, Samsung became the market leader in annual terms for the first time with 20 percent global share during 2011,” added Neil Mawston, Executive Director at Strategy Analytics, who was also quoted in a company release. “With global smartphone shipments nearing half a billion units in 2011, Samsung is now well positioned alongside Apple in a two-horse race at the forefront of one of the world's largest and most valuable consumer electronics markets.” As if that weren't enough quotes for you, Tom Kang, Director at Strategy Analytics, had this to say: “Nokia's NOK global smartphone market share halved from 33 percent in 2010 to 16 percent in 2011. A lackluster touchscreen smartphone portfolio and a limited presence in the huge United States market caused Nokia's shrinkage last year. Nokia's partnership with Microsoft MSFT will be very much in focus during 2012, and the industry will be watching closely to see how swiftly the two companies can expand in the high-value 4G LTE market that is rapidly emerging across the United States, Japan and elsewhere.” In its report, Strategy Analytics focused on just three smartphone manufacturers – Apple, Samsung and Nokia – and lumped the rest into a simple “other” category. Nokia's decline may be enormous, but its worldwide success is not to be ignored. With 77 million units shipped in 2011, Nokia is still one of the largest smartphone manufacturers in the world. Regardless, the growth is clearly with Apple and Samsung. In 2010, Samsung reportedly shipped just 23.9 million smartphones. But according to Strategy Analytics, the company shipped 97.4 million in 2011. Similarly, Apple shipped only 47.5 million iPhones in 2010, but sent 93 million of them to retailers in 2011. These figures are important for a variety of reasons. First, it shows that while Apple nearly doubled iPhone shipments in 2011, Samsung nearly quadrupled the shipments of its smartphones. This could be due to market limitations; there may not have been enough buyers for Apple to quadruple iPhone shipments. It may also be due to the fact that some consumers chose to skip the iPhone 4S in favor of the iPhone 5, which is due for release this year. Or it could be a true victory for Samsung, indicating that the company is able to grow much faster than Apple. Additionally, it's worth noting that Apple and Samsung are the leading companies responsible for raising global smartphone shipments. While Strategy Analytics' vague “other” category shows that competing manufacturers shipped 220 million units in 2011 (compared to 128 million units in 2010), Nokia's shipments dropped by 23 million. Previous reports indicate that Research in Motion RIMM shipments have been dropping as well. This leaves…who, exactly? Motorola MMI? Could Motorola be responsible for the remaining increase? Not likely. But it's safe to assume that HTC played a role in smartphone shipment growth, along with the rising threat of Chinese manufacturers like Meizu. Fourth, we need to look at the overall smartphone shipments for 2010 and 2011. Two years ago, smartphone manufacturers shipped 299.5 million units; in 2011, they shipped 488.5 million units! This is enormous. But it should make you wonder if we are headed for a bit of a downturn as sales even out. Not everyone who purchased a phone in 2011 is going to be ready to replace theirs in 2012. Surely this year will benefit from the consumers who are looking to upgrade beyond their 2009 and 2010 models. But are they enough to produce another record-breaking year? The most likely outcome seems to be this: both Apple and Samsung will continue to raise shipments, but the percentage increase in 2012 will not be as great as in 2011. However, both companies should easily eclipse the 100 million unit mark. The rest of the smartphone industry will continue to suffer. HTC should maintain its profitability, but don't expect to hear good things from Nokia or Research in Motion. Follow me @LouisBedigian