Analyst: Apple’s iPhone Market Share Is Small, But Valuable
Are mobile industry watchers overemphasizing the importance of market share? In a recent note to investors obtained by Apple Insider, Needham & Co. analyst Charlie Wolf argued that Apple’s (NASDAQ:AAPL) iOS mobile platform is in a better position than Google’s (NASDAQ:GOOG) Android, despite the relatively small size of Apple’s share of the overall mobile phone market.
As noted by Wolf, Apple’s share of the combined feature phone and smartphone market in 2012 was 9.2 percent. Although the analyst believes that Apple’s share will increase this year, it will still likely remain below 10 percent. Similarly, according to data from market research firm Gartner, Apple’s share of the worldwide smartphone market was 12.1 percent in the third quarter. Meanwhile, Android secured an 81.9 percent share of the smartphone market. However, Wolf pointed out that Google’s Android trails Apple in other, more important, metrics.
“Observers, seduced by the simplicity of the metric, have elevated market share as the sole driver of financial performance to a position that far exceeds reality,” wrote Wolf in a research note obtained by Apple Insider. “Indeed, there appears to be no correlation between market share and the viability of a platform. In surveying the variables that determine the viability of a platform, we would argue that the breadth and depth of the platform’s application library and ecosystem play a far more important role than does market share.”