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How Apple Won Christmas 2014 — and the Year in Mobile

Yuval Rosenberg

Apple capped off a strong comeback year with a very merry Christmas. The iPhone 6 and other Apple smartphones and tablets accounted for 51.3 percent of all such devices activated in the week through December 25, according to data released Monday by app analytics provider Flurry. That was nearly triple the share of runner-up Samsung, which represented 17.7 percent of new activations. Microsoft’s line of Lumia phones and related devices, shown as Nokia in the chart below, was a distant third.

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Christmas Day is an annual highpoint for new gadgets and related app downloads. Flurry based its activations figures on data from more than 600,000 apps it tracks. “While the holidays in general and Christmas in particular are not the sole indicator of the smartphone market share and trends, it is safe to say that Apple’s newly released iPhone 6 and iPhone 6 Plus have had a blockbuster holiday season, despite a lackluster holiday season for the consumer electronics industry,” the analytics firm said.

In many ways, it was also a blockbuster year for Apple and CEO Tim Cook, who quieted questions about his leadership and Apple’s capacity for innovation without Steve Jobs. Those criticisms had been getting louder as analysts, investors and consumers grew increasingly restless waiting for Apple’s next big thing, some catalyst to excite shoppers all over again and revive a stock price that sagged through 2013.

Cook also found his leadership voice in other ways this year; he came out as gay in an essay in BusinessWeek in October. “It’s been tough and uncomfortable at times, but it has given me the confidence to be myself, to follow my own path, and to rise above adversity and bigotry,” he wrote of being gay. “It’s also given me the skin of a rhinoceros, which comes in handy when you’re the CEO of Apple.”

A rising share price doesn’t hurt when you’re CEO, either, and Cook finally had that, too. The stock spiked in April after Apple announced blowout quarterly earnings and shareholder-friendly moves like a dividend hike and additional share buybacks.

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Then Apple finally went big, in a couple of ways, when it unveiled the iPhone 6 and 6 Plus, along with the Apple Watch, on Sept. 9. Flurry’s Christmas week analysis said the iPhone 6 Plus had helped popularize so-called phablets — phone/tablet hybrids — in the mobile market. In the week leading up to Christmas, 13 percent of new devices activated were phablets, up from 4 percent a year ago. That growth came at the expense of tablets, which slipped from 33 percent of new activations in 2012 to 22 percent this year. “If Christmas is a bellwether for the year ahead, we should expect strong performance from iOS devices and a continued shift to the once-derided phablet form factor,” Flurry said in its blog post.

AAPL Chart

AAPL data by YCharts

As the phones fly off the shelves, Apple has also used them to make a potentially bigger play with its Apple Pay contactless payment service, which launched Oct. 20 and saw 1 million credit cards registered in its first three days, according to Cook. The service accounted for 1 percent of digital payment dollars in November, ITG Investment Research reported earlier this month.

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That’s a “strong showing,” in the words of the ITG release, but Apple still has a long way to go to reach the size of digital payment leaders like PayPal. Cook and Co. are still signing up partners — Chevron said this week that it’s working to accept Apple Pay at its gas pumps — and some retailers have opted to try their own payment service instead of signing on to Apple’s, but the early adoption trends suggest the CEO could eventually have more to crow about.

Until then, Cook can at least point to a resurgent stock — up 40 percent for 2014 — and his new title as CNN Money’s CEO of the Year…plus, once again having the hottest gadgets on the market at Christmas.

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