Apple Inc’s (NASDAQ: AAPL) stock is down from its 52-week high of $279 to $256. One of the most significant reasons that although the iPhone, especially the latest version, is selling remarkably well its popularity may not be sustainable.
Those rapid sales could be undercut, and may be in the process of being eroded already, by the popularity of Google Inc. (NASDAQ: GOOG) Android-powered phones. The Android operating system is the software foundation of the most successful smartphones from Motorola Inc (NYSE: MOT) and huge Chinese handset company HTC. Thanks to the Motorola Droid, which uses the OS, Motorola avoided smartphone oblivion. Android is free for the phone companies, and open sourced so they can make modifications.The latest comScore figures on smartphone platforms in the US shows Android moving from 9% market share in May to 13% in June. Apple’s share was down from 25.5% to 24.5%. Research In Motion (NASDAQ: RIMM) fell from 42.1% to 41.7%. Many analysts argue that RIM and its BlackBerry are the largest losers due to the ascent of Android because the company owned the high-end of the handset business for so long.
Apple’s success still relies on the Mac and the iPod. The iPad tablet is too new to the market for analysts to be able to opine with any assurance about the device’s contribution. What is certain is that the iPhone is the cornerstone of Apple’s current business. And, there is some danger that its exceptional popularity may falter.
| Top Smartphone Platforms 3 Month Avg. Ending May 2010 vs. 3 Month Avg. Ending Feb. 2010 Total U.S. Age 13+ Source: comScore MobiLens |
|||
| Share (%) of Smartphone Subscribers | |||
| Feb-10 | May-10 | Point Change | |
| Total Smartphone Subscribers | 100.0% | 100.0% | N/A |
| RIM | 42.1% | 41.7% | -0.4 |
| Apple* | 25.4% | 24.4% | -1.0 |
| Microsoft | 15.1% | 13.2% | -1.9 |
| 9.0% | 13.0% | 4.0 | |
| Palm | 5.4% | 4.8% | -0.6 |
*May data does not include the impact of Apple’s launch of iPhone 4, which
became available in June.
Handset sales favored Samsung over the same period. It had 22.4% of the market in May. LG had 21.5%. The South Koreans have the US market by its neck. Nokia (NYSE: NOK), the world’s largest handset company, with 39% of global share, only has and 8.1% share in the US. No wonder most analysts believe that its mammoth business is in such distress. Its stock has fallen from a 52-week high of $16 to $8.50.
Douglas A. McIntyre
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