Apple Inc. Makes Big Gains in Market Share in the U.S.
As its largest market, the U.S. is key to Apple's success. Fortunately, Apple's doing incredibly well in its home market. Sure, Samsung may be gaining market share among smartphone manufacturers in the U.S., but not as fast as Apple, according to a new report from NPD.
Apple's soaring U.S. market share
Measuring installed base, iPhone ownership in the U.S. increased to 42% in the fourth quarter of 2013, compared to 35% in the year-ago quarter. Apple's seven-percentage-point gain easily trumped Samsung's gain from 22% to 26% during the same period. The only other manufacturer to gain market share on a year-over-year basis was LG, which registered a very small gain. All of the other top manufacturers NPD tracks saw a decline in market share. NPD bases its estimates on a survey of more than 5,000 U.S. consumers age 18 and older.
NPD isn't the only study to paint such an optimistic picture of the iPhone in the U.S. ComScore estimated in December that Apple had a 40.6% share of the installed base of smartphones in the U.S., while Samsung came in second at 24.1%.
The news that Apple is doing well in the U.S. shouldn't come as a surprise. Two separate reputable studies project Apple to gain market share in the U.S. over the coming years.
In April 2013, Yankee Group's Carl Howe projected that Apple will continue to gain market share in the U.S., with its platform eventually even surpassing Android. He cited the iPhone's impressive retention as one of the driving forces in his Markov projection. He explained Apple's potential eloquently:
Think of the Apple and Android ecosystems as two buckets of water. New smartphone buyers -- mostly upgrading feature phone owners -- fall like rain into the two big buckets about equally, with a smaller number falling into Windows Phone and BlackBerry buckets. However, the Android bucket leaks badly, losing about one in five of all the owners put into it. The Apple bucket leaks only about 7 percent of its contents, so it retains more of the customers that fall into it. The Apple bucket will fill up faster and higher than the Android one, regardless of the fact that the Apple bucket may have had fewer owners in it to begin with.
In another estimate, Asymco's Horace Dediu recently projected that Apple's installed base could grow as large as 68% of Americans (aged 13 and older) by 2017.
The global picture
Globally, Apple's market share story isn't quite as optimistic. Apple's share of shipments in China during the August through October period in 2013 fell from 18.9% to 15.5% this year, according to Kantar Worldpanel. Among the other countries Kantar Worldpanel tracked, the iPhone share of shipments on a year-over-year basis also fell slightly in Germany, France, and Italy.
Notably, Apple's smaller year-over-year share of shipments in key markets like China doesn't mean Apple's iPhone shipments are slowing -- it just means Apple's growth in iPhone shipments in those countries is lagging the growth of the overall smartphone market.
While Apple's global markets are important, the Americas market is still Apple's biggest business driver. In the company's most recent quarter Americas revenue accounted for 37% of the company's revenue. Its second-largest operating segment, Europe, accounted for 21.3% of the company's revenue. That's why investors should be keenly interested in Apple's success in the U.S. Any negative turn in local sentiment toward Apple's products could meaningfully hurt the company's results.
Definitely. Apple's U.S. customer base is the most familiar with the company's products. U.S. consumers' continued enthusiasm for Apple's iPhone illustrates the loyalty of Apple's customers -- a crucial facet of the long-term thesis for Apple stock.
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The article Apple Inc. Makes Big Gains in Market Share in the U.S. originally appeared on Fool.com.Fool contributor Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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