Apple Global Smartphone Sales to Close in on Samsung

The remarkable success of the new Apple Inc. (NASDAQ: AAPL) iPhone 6 series and the new smartphones it likely will release in 2016 should allow its sales to close rapidly on arch rival Samsung, based on a forecast of global sales for 2016. Samsung’s fortunes in the smartphone market have slipped for two years, and the stumbles have already cost it in revenue and profits. But even with the shipment improvement, Apple’s shareholders may not be satisfied.

According to research firm TrendForce, the worldwide market for smartphones has cooled off, which means market share will be more important to success:

Looking ahead to 2016, TrendForce expects the smartphone market to remain saturated. Annual shipments are estimated to grow 7.3% to about 1.4 billion units.

The overall trend of sales will squeeze Samsung’s position from beyond the pressure from Apple:

“Double-digit shipment growth is a thing of the past for vendors as the global market has begun to plateau in 2015 after years of growth” said TrendForce smartphone analyst Avril Wu. “While Samsung has kept its shipment title through the year, it is struggling against Apple in the high-end market and being pushed out of the mid-range and low-end segments by Chinese competitors. Facing challenges on two fronts, Samsung’s smartphone business will operate in an increasingly difficult situation in the near future. Closely trailing Samsung in global shipments is Apple, which remains as the dominant and most profitable vendor in the high-end market. As for Chinese brands, they are expanding overseas to gain market share. Huawei’s shipments surpassed 100 million units this year and became the third leading vendor on account of its export efforts. Xiaomi and Lenovo are also branching into the emerging markets.

However, Apple’s growth is expected to challenge the entire market. TrendForce expects it to ship 260 million iPhones next year, which will give it a global share of 18.5%. Samsung’s shipments are expected to reach 310 million, which will drop its share to 22%. TrendForce reports that the primary reasons for Samsung’s problems go beyond Apple, “due to Chinese competitors undercutting its prices.”

Apple’s investors should be cheered by the shipment expectations. Apple shipped 48 million iPhones in its most recently reported quarter. Presumably Apple should do better than that in the current quarter, which includes holiday sales. Wall Street may not even look at market share if total sales are lackluster.

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