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Apple overtakes Samsung in US mobile market
February 03, 2013
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WASHINGTON: Apple passed Samsung Electronics to become the top mobile-phone maker in the US for the first time, scoring a victory in the companies’ battle for global dominance of the mobile-device market.

Apple sold 17.7 million mobile phones in the US during the fourth quarter, a 38 per cent jump from a year earlier, research firm Strategy Analytics said in a statement. That gave it 34 per cent of the market, topping Samsung, which sold 16.8 million handsets for a 32 per cent market share. Total shipments grew 4 per cent in the quarter to 52 million phones.

The US market is a stronghold for Apple as it faces intensifying competition from Samsung and other smartphone makers using Google Inc. (GOOG)’s Android operating system. Samsung, which also makes cheaper handsets with less sophisticated functions, is the global leader in mobile phones with more than 100 million units sold last quarter.

“Apple’s success has been driven by its popular ecosystem of iPhones and App Store, generous carrier subsidies, and extensive marketing around the new iPhone 5 model,” said Neil Mawston, an analyst at Strategy Analytics in London.

LG Electronics remained the third-largest vendor in the US, shipping 4.7 million mobile phones for a 9 per cent market share, Boston-based Strategy Analytics said.

Slowing Growth

Apple introduced the iPhone in 2007, and the product became the Cupertino, California-based company’s biggest source of revenue as consumers embraced its touch screen and ability to download games and other applications. Apple has fueled demand by introducing a new version approximately every year, and cutting the price of older models at the same time.

Still, broader product portfolios from Samsung and other rivals have begun to eat into Apple’s growth globally. Last month, Apple posted the slowest profit growth since 2003 and the weakest sales increase in 14 quarters, fueling concern about Chief Executive Officer Tim Cook’s ability to keep producing hit products more than a year after the death of co-founder Steve Jobs.

Even in the US, Samsung may regain the top spot in 2013 by releasing new mobile-phone models such as the Galaxy S4, Mawston said. While Apple relies on just the iPhone, Suwon, South Korea-based Samsung’s offering includes cheaper, more basic phones, as well as larger-screen, more expensive devices.

Tablet Rivalry

Apple’s grip on the multi-billion-dollar tablet computer industry is showing the first signs of loosening, as arch-rival Samsung doubled its market share in the last quarter.

The Silicon Valley company’s share of global tablet sales fell to 44 per cent in the final three months of the year, down from 52 per cent a year earlier. Samsung, the South Korean company that makes Galaxy tablets, more than doubled its stake to 15 per cent, according to research firm IDC.

Although Apple’s tablet sales rose over the period, the ground gained by Samsung underlines the increasing threat the US company faces in a market it reinvented with the introduction of the iPad in 2010.

Worldwide tablet sales rose 75 per cent to 52.5 million over the quarter, IDC said, as consumers ditched desktop PCs for the growing selection of tablet devices on sale.

The haemorrhaging of the PC market is forcing companies from Microsoft to Hewlett-Packard to sharpen their efforts to win a share of the tablet market that IDC forecasts will have sales of almost 300 million by 2016. While others battle to gain a foothold in the market, it is the clash between Apple and Samsung that has taken centre stage over the last 12 months. Apple scored a victory over its Korean rival last year when a US judge ruled that Samsung had infringed patents protecting the design of the iPhone.

A separate report said offered encouragement for Apple after showing that last quarter it toppled Samsung as the biggest seller of mobile phones in America.

Helped by the introduction of the iPhone 5 in September, it took 34 per cent of the market, eclipsing Samsung’s 32 per cent, according to Strategy Analytics.

Japanese giants Panasonic and Sharp have offered a reminder of the struggles now facing the consumer electronic companies that once dominated the industry.

Fierce competition in the television market, strategic errors and the strong yen hitting export markets resulted in Panasonic racking up losses of $6.8 billion in the first nine months of the year, double 2011’s figure, the company said recently.

Sharp, which has put its Osaka headquarters up for sale, said it lost $4.6 billion.

Patent Fight

A US appeals court recently rejected Apple Inc’s request to revive its bid for a sales ban on Samsung’s Galaxy Nexus smartphone, dashing the iPhone maker’s attempt to recover crucial leverage in the global patent wars.

Apple had asked the full Federal Circuit Court of Appeals in Washington, D.C., to revisit a decision in October by a three-judge panel of the same court. The panel rejected Apple’s request to impose a sales ban on Samsung’s Nexus smartphone ahead of a trial set for March 2014.

The fight in appeals court comes after Apple won a $1.05 billion verdict last year against Samsung in a US District Court in California. The same trial judge will preside over the legal battle surrounding the Nexus phone, which involves a patent not included in the earlier trial.The fight has been widely viewed as a proxy war between Apple and Google Inc. Samsung’s hot-selling Galaxy smartphones and tablets run on Google’s Android operating system, which Apple’s late co-founder, Steve Jobs, once denounced as a “stolen product.” In its October ruling against Apple, the appeals court raised the bar for potentially market-crippling injunctions on product sales based on narrow patents for phone features. The legal precedent puts Samsung in a much stronger position by allowing its products to remain on store shelves while it fights a global patent battle against Apple over smartphone technology.

US District Judge Lucy Koh, in San Jose, California, who has presided over much of the Apple/Samsung litigation in the United States, cited the appeals’ court decision in a December order rejecting Apple’s request for permanent sales bans on several Samsung phones. Apple has appealed Koh’s ruling.

Apple wanted the full Federal Circuit of Appeals, made up of nine active judges, to reverse the earlier ruling. But in a brief order, the court rejected Apple’s request without detailed explanation or any published dissents.

Several experts had believed that Apple faced long odds, as the legal issues in play were not considered controversial enough to spur full court review.

Apple could still appeal to the US Supreme Court. However, the high court has made it more difficult for patent plaintiffs to secure sales injunctions in recent years.


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