Samsung Smartphone Smothers Apple iPhone in Global Sales

24/7 Wall St.

Apple Inc. (AAPL) has maintained a lead in smartphone sales in the United States. However, its luck has run out worldwide as Samsung's models continue a surge in popularity. The trend suggests that Apple's iPhone may never gain the high ground in the smartphone industry again.

According to research firm Canalys, Samsung's worldwide market share rose to 34% in the third quarter. Apple was in second place, posting a figure of only 15%. The report on third-quarter sales showed Huawei, Lenovo and LG in the next three places. Over a quarter of a billion smartphones were sold worldwide in the period. That figure shows just how massive Samsung's opportunity is as sales in the sector continue to grow unabated. It also shows the damage Apple may suffer if its sales continue to be eclipsed. The market, of course, has already figured that out, driving Apple's shares from more than $700 to their current price of $525.

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Canalys reported that Samsung's sales have been helped by its dominance in large screen smartphones, somewhere in size between the Apple iPhone and iPad. The firm's report showed:

Shipments of large-screen smart phones, 5" and above, reached their highest ever level, accounting for 22% of shipments or 56 million units. This trend continues to be driven mainly by Samsung, which dominates the large-screen segment. Breaking this down further, 66% of the 56 million smart phones had a 5" display, 31% had screens between 5" and 6", while just 3% had 6" or larger screens.

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Those screen sizes show that there is a market Apple has not been able to unlock.

Apple picked up some ground in China. It will still need more strategic partners there to have any chance to advance further. This means Apple has no choice other than to set a deal with China Mobile Ltd. (CHL), because the huge carrier's competitors have nowhere near its sales. Apple has had the upper hand in most carrier negotiations. Its desperate need to do better in the People's Republic has taken that advantage away. Canalys reported just how important the China market is:

At a regional level, Greater China (China, Hong Kong and Taiwan) again grew the most, by 64%, with nearly 100 million units shipping. Greater China now accounts for 39% of the global market.

The data show that Samsung had the number one position in every major geographic market around the world, another sign of how high the wall that Apple has to climb is.

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The only real surprise in the report was that Microsoft Corp.'s (MSFT) tiny place in the operating system market has shown signs of improvement. The world's largest software company has been working on bettering its mobile OS for years, with all that effort being unsuccessful. But its desperate situation has begun to become less dire:

In terms of platforms, the Android and iOS shares were static sequentially, but Microsoft increased its share of the market to 4%. It increased its shipments by 185% to 9.2 million units against Q3 2012, which helped to place it as the second biggest OS in 19 countries.

Second place must look good for a product that has been close to death for so long.

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