Is the iPhone Dropping Fourth Quarter Market Share From ‘Razr Burn’?

Is the iPhone Dropping Fourth Quarter Market Share From ‘Razr Burn’?

Is the iPhone, Apple’s iconic handset, growing a bit long in the tooth? Probably not. But that seems to be the message from researchers reporting the iPhone lost market share during the fourth quarter, accounting for 16.6 percent of the market, down from 18.1 percent of smartphone sales in the third quarter.

Although iPhone sales were up 18 percent in the quarter, the entire smartphone market increased 26 percent as Motorola’s Android phones and Nokia helped boost sales, according to ABI Research. Ironically, ABI believes Apple’s iPhone could be encountering the same slump as Motorola’s once very popular Razr.

Michael Morgan, an ABI Research analyst, describes the effect as “Razr burn.” Two years after Motorola launched the Razr in 2004, the handset’s popularity and sales dropped. The original iPhone was introduced in 2007.

The iPhone last lost market share in the fourth quarter of 2008. This loss of market share comes amid record iPhone sales and profit. “To lose market share in a record quarter, that’s got to sting a little bit,” said the analyst.

What stings is that iPhone sales almost always fall in the fourth quarter after a jump in third-quarter demand. Why? The fourth quarter usually follows a third-quarter introduction of a new product. This was the case with the 3G, the 3GS and likely with the next iPhone version.

In a closed employee meeting last week, Apple CEO Steve Jobs is alleged to have said Google was out to “kill” the iPhone. Although his comments did not include any timing, Jobs reportedly said the next iPhone upgrade will be of “A+” quality.

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But is this recent analysis of fourth quarter smartphone market share anything to cause worry? Record iPhone sales in the fourth quarter, record profits for Apple and the usual ebb-and-flow of financial reports should keep iPhone users and Apple secure.

[Via Wall Street Journal, 9to5Mac]

About the author

Ed Sutherland

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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  • Joe

    “Jobs reportedly said the next iPhone upgrade will be of’ ‘A+’ quality.” So, everyone was a-twitter about the Next Big Unknown Thing from Apple and now the next upgrade is ‘A+’ awesome, so why wouldn’t people hold off on buying their first or upgraded iPhone? Also, my 3G phone still works great. A little speed and a compass might not be enough as people roll off their two-year contract cycles.

  • DaveW

    People are touting these numbers without really explaining how they define ‘smartphones’.

    As some commentators have pointed out some of those Nokia phones are more accurately ‘feature’ phones and hardly of the level of the iPhone. David Pogue suggested that there should be a new category for phones of iPhone level called ‘app phones’. Nokia’s OVI store barely functions with many apps not running on all phones. TechCrunch calls it a complete disaster. So if apps don’t work well on many of these Nokia phones how ‘smart’ phone are they?

    These kind of numbers always depend on definition and are always suspect. For example for PC numbers, netbooks and PC used as cash registers, weighing machines etc are counted but iPod Touches which are mini computers capable of running 140,000 apps are not. Apple sold more Touches and iPhones than all the netbooks by all manufacturers but due to the way its counted Apple’s PC market share is still small. Will the iPad a BIG iPod Touch be counted in PC numbers? If iPads are counted as PCs then why are Touches not counted, just due to size? If iPads are not counted then what are they? How does that affect PC market share? See numbers are wonky.

  • nabil2199

    @DaveW: you tell me how a fart app is more advanced than a python interpretter or SSHd

  • DaveW

    @nabil2199,

    all you can say is fart apps. It’s pointless arguing with people who think 140,000 apps are fart apps.

    But just to humor you: can you give me statistics from a reputable source to prove your point?

    Supporting MY comments:
    DailyMobile : “is the OVI Store a complete disaster”

    Washinton Post “Today sees the worldwide roll-out of Nokia’s Ovi Store, the company’s response to Apple’s App Store (and other centralized content stores for mobile phones and OS’es), and no doubt the company is watching the launch unfold on a global scale with watchful eyes. Here’s the thing: the launch is an utter disaster and I assume (hope) Nokia executives are outraged with the way things are going.”

    TechHerald “Ovi Store labelled ‘FAIL’ after launch disaster. much of the content is proving inaccessible, and individual pages either crawl or don’t load at all.”

    Zdnet : “Nokia Ovi Store fails in many ways, buy with extreme caution”

    etc etc.

    —-
    And about definition of smart phones.

    David Pogue New York Times:
    “What should we call these iPhone-like, touch screen Wi-Fi phones with music and video, real Web browsers, e-mail, sensors (light, tilt, location, proximity), and, above all, app stores? These machines can download thousands of free or cheap add-on programs – “apps” – and become GPS units, musical instruments and medical equipment.
    “Smartphone” is too limited. A smartphone is a cellphone with e-mail – an old BlackBerry, a Blackjack, maybe a Treo. This new category – somewhere between cellphones and laptops, or even beyond them – deserves a name of its own.”

    Mossberg of the Wall Street Journal calls them ‘super smart phones’ and there’s only a handful of phones including the iPhone’ in this category.

    a lot of Nokia etc phones fall into this old ‘smart phone’ category and is not in iPhones league.

    See I can back up my contentions, so where’s your stats about 140,000 iPhone OS apps being fart apps?

  • nabil2199

    @DaveW: so for you to be a smartphone you need a touchscreen, but no open development platform? what would you call phones that can do what the iphone can only dream of?
    I must concede that fart app is a gross simplification, the fact that you can’t have interpreters, IPC and lots of things that are taken for granted in any modern computer system make the iphone IMHO an elaborate feature phone, nothing like what a n900 is.
    P.S. sorry for the bad english, english is my 3rd language and I’m exhausted :D

  • iFanboy

    NABIL?

    Rest, dear brother

    {it’s very important you do, as Hue knows too well}