How Long Will Apple’s iPhone Reign Last?

How Long Will Apple’s iPhone Reign Last?

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Apple sold a record 37 million iPhones in the fourth quarter — 17 million more than it had ever sold in any  other quarter. By last December, 44.5% of all smartphone buyers in the United States were choosing iPhones, up from 25.1% last October. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

Is this popularity a good thing? Maybe, maybe not.

"All of a sudden, every teenage girl has an iPhone," said Mr. T. Michael Walkley, an analyst at Canaccord Genuity. "The real danger is that Apple becomes so mainstream that there is a breakaway by consumers to something new," reports the New York Times.

Indeed, those in the market for a device other than the iPhone have plenty of alternatives. Apple's rivals, which include Samsung, Huawei, ZTE and others using the Google Android operating system "are making smartphones for much less, and the iPhone is becoming ubiquitous, threatening its cachet."

Many competitors have displayed their new models at the Mobile World Congress in Barcelona, a phone trade show, to highlight their smartphones' unique features. One standout debut was Nokia's 808 PureView smartphone that boasts a 41-megapixel/1080p camera.

Competitors are also working to keep prices below that of Apple's iPhone. Apple was not present at the trade show.

Given the competition, Mr. Walkley is cautious about Apple's ability to retain its position as the lead supplier of smart phones over the next 5-10 years.  Mark Newman, the director of mobile research at Informa Telecoms and Media, adds "Apple is focused on defending the high end of the market… Competitors, such as the Galaxy from Samsung, are starting to catch up. I think it is inevitable that the margin pressure increases."

But before supposing that Apple's days are numbered, consider that the company has billions of dollars earmarked for continuing innovation and marketing. The company has yet to see any major branch of the brand go on the decline. 

Business Section: Investing Ideas

Interested in exploring the smart phone market? Below we've listed 10 of the biggest players in the industry.

Do you think the iPhone reign will last?

 

Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:

List sorted by market cap.

 

 

“1. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $487.08B.

 

“2. Microsoft Corporation (MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $264.14B.

 

“3. Google Inc. (GOOG, Earnings, Analysts, Financials): Is the world's most popular search engine. Market cap at $198.3B.

 

 

“4. AT&T, Inc. (T, Earnings, Analysts, Financials): Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $179.83B.

 

 

“5. Vodafone Group plc (VOD, Earnings, Analysts, Financials): Provides mobile communications in Europe, Africa, the Asia Pacific, the Middle East, and the United States. Market cap at $143.74B.

 

 

“6. Verizon Communications Inc. (VZ, Earnings, Analysts, Financials): Provides communication services. Market cap at $107.98B.

 

 

“7. QUALCOMM Incorporated (QCOM, Earnings, Analysts, Financials): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $107.3B.

 

“8. Siemens AG (SI, Earnings, Analysts, Financials): Operates in the industry, energy, and healthcare sectors worldwide. Market cap at $91.93B.

 

 

“9. NTT DOCOMO, Inc. (DCM, Earnings, Analysts, Financials): Provides wireless telecommunications services, packet communications services, and satellite mobile communications services in Japan. Market cap at $74.34B.

 

“10. Nokia Corporation (NOK, Earnings, Analysts, Financials): Provides Internet and digital mapping and navigation services worldwide. Market cap at $22.22B.

 

 

(Written by Rebecca Lipman, list compiled by Eben Esterhuizen, CFA)

 

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6 Responses to “How Long Will Apple’s iPhone Reign Last?”

  1. APPL's domination will end when it will end. How does one predict a shift in taste? Look at Lululemon or coke or mcD's. Or Starbucks. Apple is capable of shifting its strategy to adjust for changing demand.

  2. donklo says:

    As long as Apple continues to innovate its phones the brand loyalty will follow. If it lags behind of course people who are used to the best will experiment, but in the meantime, people are enjoying the iPhone as their first smart phone and loving it. That's what they know. They are starting to hear that other companies make good phones too, but since we only use one phone the iPhone is a daily reminder to its users about how great it is. And when it starts in sales earnest in China, a country with 4 times the population of the U.S. I predict continued growth at strong levels.

    • @Kalimero111 says:

      Let me remind you about one fact: China GDP per capita is 10 times lower than USA, so for the average Chinese person the iPhone is 10 times more expensive than it is for U.S. citizen. So would you buy iPhone if it was 10x the price it is now? Don't you think that iPhone would sell in China already if it could? So it doesn't matter if China has 4 times the population of U.S. And I really think that everyone is just underestimating Steve Jobs contribution to Apple's development. People will get bored of iPhone sooner than anyone thinks.

  3. Laughing_Boy48 says:

    None of us know what the future holds and Apple can certainly change course or adjust its tactics. With the amount of money that Apple has, there are many choices that Apple can make if they choose to Besides, even five years is pretty far off when it comes to predicting the smartphone industry. As long as Apple continues to build high-quality products and good customer service, they should be able to stay in business for at least another five years. Honestly, don't consumers want good products and good service. Do most consumers only want some product just because it's cheap. I think those that are predicting the demise of Apple are those who want to see Apple collapse. Otherwise, Apple certainly seems to have a lot of momentum at this point and doesn't seem near the verge of collapse.

  4. Dann Berg says:

    I think it's going to be very difficult for a competitor to make a product superior to the iPhone in the foreseeable future. That being said, I think the quality of the iPhone will drop over the next few years (without Steve Jobs around anymore) which will make it easier for competitors to make products that are closer in quality to the iPhone.

  5. @Infostack says:

    Apple is the only one with a truly digital ecosystem model. And they have a low-end strategy, it's called used and selling the last generation while they sell the new one.

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