Apple Rivals Reel from iPhone Frenzy

      January 29, 2014 11:55

      The release of new iPhone models regularly wreaks havoc on the sales of rival smartphone makers. The trend has become more and more distinct every year and is proving a serious headache especially for Samsung.

      Apple on Monday said its fourth-quarter sales totaled a record US$57.6 billion, with net profit at $13.1 billion. The stellar earnings were due to the release of the iPhone 5S, iPhone 5C and iPad Air.

      Apple sold 51 million iPhones from October to December, up more than 50 percent compared to the third quarter. It also sold 26 million iPads over the same period. Both were new quarterly records.

      According to market researcher Strategy Analytics, Apple's global smartphone market share rose from 13.4 percent in the third quarter to 17.6 percent in the fourth.

      Rival Samsung was impacted the most as sales of its flagship Galaxy S4 smartphones lagged behind expectations, causing fourth-quarter operating profit to plummet 18 percent compared to the previous quarter.

      Galaxy S4 sales fell from 8.84 million units in the third quarter to 8.6 million in the fourth quarter, resulting in Samsung's global smartphone market share falling from 35 to 29.6 percent.

      It was the first time since the release of the Galaxy S1 in 2010 that Samsung saw both sales and market share drop.

      Previously sales of Samsung's smartphones increased steadily even if its market share retreated after Apple unveiled new models, because the overall market was still growing. But as the market became saturated, Samsung has taken a direct hit from the impact of Apple's new products.

      Samsung is not alone. Lenovo and LG saw their sales volume rise in the fourth quarter but their market shares declined. Only Huawei was able to increase its market share slightly from 5 to 5.7 percent.

      Analysts say Samsung will experience even tougher competition with Apple in the future. Apple is apparently planning to introduce a large-screen model this year which could eat into sales of Samsung's Galaxy Note.

      But Apple also faces its own challenges. It will come up against intense competition when Samsung's Galaxy S5, LG's G Pro 2 and Huawei's Ascend Mate 2 hit the market in the spring.

      Despite the stellar earnings, Apple's shares fell more than eight percent in after-hours trade following the announcement.

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