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November 6, 2008 12:08 PM PST

Apple in second place as smartphones surge

by Tom Krazit
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The iPhone was the story in the worldwide smartphone market last quarter.

(Credit: Apple)

Apple's blowout quarter for iPhone 3G sales lifted it into second place among all smartphone vendors worldwide.

Canalys released market share stats on Thursday showing strong growth for the smartphone market even as the worldwide economic situation takes a turn for the worse. A total of 39.9 million smartphones were shipped during the third calendar quarter of the year, a 28 percent increase over last year's totals.

Nokia is still the leading vendor by a comfortable margin, holding 38.9 percent of the market. But shipments declined slightly, and market share fell 12.5 percent, compared to last year, as Nokia goes through a transition from older models to newer devices that are just getting out into the market, according to Canalys.

Apple was the big story in the smartphone market during the quarter, vaulting over Research In Motion to take second place, with 6.9 million shipments, or 17.3 percent of the market. And RIM had an excellent quarter, increasing BlackBerry shipments by 83 percent and picking up five points of market share.

Canalys thinks that RIM is in good shape to regain the second-place spot with the pending release of several new BlackBerry models, including the Bold, Storm, and clamshell Pearl. It's unclear whether Apple will be able to sustain that level of iPhone 3G shipments during the fourth quarter, given how new the company is to this market.

When the numbers were sorted by operating system, a similar picture emerged. Symbian is the market leader, due to its close association with Nokia, but Apple and RIM are the second- and third-place vendors, respectively. Symbian lost market share during the quarter that was snapped up by Apple, RIM, and Microsoft.

Despite the Apple juggernaut, Microsoft also posted solid gains during the quarter, increasing the number of Windows Mobile handsets shipped by 42 percent. However, Apple shipped more iPhones during the quarter than all the Windows Mobile devices shipped worldwide by Microsoft's partners, according to Canalys.

Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
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Add a Comment (Log in or register) Showing 1 of 2 pages (46 Comments)
by Ipopngraphics November 6, 2008 12:28 PM PST
Alex you're getting slow.... or this post has tweaked your brain into reality and you finally realize that Apple is working it's way up the market share percentages one fantastic device and one stellar operating system at a time...
Reply to this comment
by AlanHub November 6, 2008 11:03 PM PST
i own leopard and it is not the most amazing operating system, its ridden with bugs, most of which apple updates cannot keep up with.
by random truth November 7, 2008 2:29 AM PST
@AlanHub
When was this ever about mac os x?
by Penguinisto November 6, 2008 12:38 PM PST
Wow... just... wow.

I'm betting the MSFT apology choir will have a damned hard time spinning this one, and I'm further willing to bet that a lot of the professional naysayers in the tech punditocracy are about to get really quiet on the subject...

Good luck to RIM and Nokia on catching up in the next quarter or two. That said, the chances of RIM hitting it are the better of the two, and even there it's not looking good.

I think things are about to get very, very interesting in the next few months...

/P
Reply to this comment
by ballmerisanape November 6, 2008 1:10 PM PST
But.... Steve Ballmer said no one would by the iPhone.

and now you report:

"Apple shipped more iPhones during the quarter than all the Windows Mobile devices shipped worldwide by Microsoft's partners"
Reply to this comment
by t8 November 9, 2008 3:50 PM PST
Steve must be right and everyone else wrong. Apple must be sending in decoys to buy their phone and then putting them back on the shelves.
by Galaxy5 November 6, 2008 1:15 PM PST
Remember last summer, when al the "analysts" who are paid to know this stuff insisted Apple would have only a niche place in the nascent smartphone market?

How much do those guys get paid again? It's too much.
Reply to this comment
by brettdawson69 November 16, 2008 8:06 PM PST
I agree, but I do have to say that when the analysts looked at the iPhone, the price was $500 for a 4 gig and $600 for the 8 gig. The price has changed a bit, along with the size of the memory, and the addition of the app store.
by Perry_Clease November 6, 2008 1:55 PM PST
And to think Apple took the iPhone there without it having a user replaceable battery, no FM tuner, and no keyboard!
Reply to this comment
by NewsReader_ November 6, 2008 2:37 PM PST
Nice job Apple. Great device. Great end user experience. Excellent marketing.

The test now becomes whether they can sustain at this level. They have raised the bar and the other vendors will inevitably reach it and perhaps pass it. Can they raise it again or will they be a one-hit wonder?
Reply to this comment
by sapporobaby November 6, 2008 3:19 PM PST
This is a stupid survey. This should have a disclaimer that pertains only to the US. The rest of the world uses Nokia.

By the way, the iPhone is not a smartphone.
Reply to this comment
by jtaylorhoopla November 6, 2008 3:29 PM PST
Yes it is. It Does Alot, And you can send MMS Messages with it, ever heard of a thing called e-mail? I sure have. I Have an iPod Touch, And Ive used iPhones in the past, as my sister has one, And they are smartphones.
by terryda November 6, 2008 6:26 PM PST
No, you're right it is not a smartphone. I've heard of e-mail. My three year old Sony w810i can send and receive e-mail. That doesn't make it a smartphone. To date, there is no grounds to call a phone a smartphone. But I personally think that a smartphone should have all the features of a standard cell phone (camera, mms, internet, etc.) as well as sync. or tethering capabilties between a major computer OS for word processing and business apps creation and editing. I would categorize the iphone in some sort of entertainment "smartphone". Its a fun and fancy OS, but really has no major use for business. After all, that is why the smartphone movement was started, to replace a laptop. Also, it may be gaining ground this quarter, but linux, windows mobile, and RIM all still have a much larger market share. I think that the next year will really test the iphone with android, BOLD, and new HTCs dropping. Nonetheless, Apple has done an amazing job at pushing its products out the door by advertising "all new" products when they are only the same product with storage increase(AIR) or added features that should have been there in the first place(3G). How naive you apple folk are.
by montex66 November 7, 2008 12:10 AM PST
The iPhone is not a smartphone, eh? Ok, I'll bite. What exactly is the reason that disqualifies it from being a smartphone? You made the claim that it isn't, now it's time for you to back that up.

Unless, of course, you can't. And if you can't then you're just talking out your a**.
by Eric Mason November 7, 2008 2:32 AM PST
If it's not a smartphone what is it?
by Earthlin November 7, 2008 10:20 AM PST
No, it's not a smartphone. It's a really really really smart phone or the first really mobile computer disguised as a cellular with a great OS.
by msherer November 7, 2008 4:10 PM PST
You must be drinking some Nokia/Microsoft Koolaid. The iPhone has OS X underneath and 4,000+ 3rd party apps for it. That it doesn't have feature X that you or some other vendor thinks defines the SmartPhone category is just hair splitting. The remarkable thing about the iPhone is how quickly it is maturing and how dominant it is in web traffic. In my book, the smartest phone is the one that gets used.
by terryda November 11, 2008 4:05 PM PST
"The iPhone has OS X underneath"

In no way does it have OS X underneath. It is derived from OS X, in the fact that it uses DARWIN. But saying it has OS X underneath is like saying a bicycle has a motorcycle underneath. They have the same fundametals but are very different.

"That it doesn't have feature X that you or some other vendor thinks defines the SmartPhone category is just hair splitting."

How else would you define things? If a plane doesn't have wings it's not a plane, it's a land speed record setting automobile. Even AT&T says its not a smartphone. "iPhone is a revolutionary mobile phone" - AT&T. Enough said fanboys? It's not a smartphone, and it's not a laptop replacement. It's a cool phone or jesusphone or whatever you want to call it, but it's not a smartphone.
by Perry_Clease November 6, 2008 4:00 PM PST
"The rest of the world uses Nokia"

That figures. They are also enslaved to the metric system of measurement which is soulless, devoid of poetry, and élan.
Reply to this comment
by Rick Cavaretti November 7, 2008 7:24 AM PST
Kind of like the most advanced country on the planet still using an antiquated, agriculturally based measurement system...in the 21st century?
by Perry_Clease November 8, 2008 5:44 AM PST
"Kind of like the most advanced country on the planet still using an antiquated, agriculturally based measurement system...in the 21st century?"

Exactly! We wouldn't be in the position of the leading world power had we adopted the metric system. Sure it is fine in scientific and engineering fields, but for every day use nothing beats the the old measurements.

"96,560 Kilometers Under the Sea", it really rolls off of the tongue. :)
by earthvoyager November 6, 2008 4:11 PM PST
Apple really did a great job!

Although Apple did raise the bar and lower the price, I think other venders, RIM and T-Mobile, didn't really try to follow the price of iPhone. Both ROM Bold and G1 sell or similar price with only 1G of memory and try to tell thier customers this is as good as iPhone's 8/16 G. So price wise, there still isn't any competitor for iPhone.

"The test now becomes whether they can sustain at this level."
Still doubt? I can tell you that there are still people waiting for their current plans to mature out to move to iPhone. That will be next May for me. Still wait patiently.
Reply to this comment
by troyrig November 6, 2008 5:47 PM PST
Apple released the iPhone 3G at the start of the quarter. A lot of original iPhone owners upgraded, and even more new owners waited for its release. Apple also started cutting its inventory that previous May. Also, 1 million units were sold in the first 3 days - or almost 18% of the entire quarter's sales, and 3 million in the first month. What they do the rest of the year will be an accurate barometer of this model's success.
Reply to this comment
by atish505 November 6, 2008 8:28 PM PST
Windows Mobile is a joke! Pity all the poor soulS who are tortured day in and day out because of Windows Mobile.
Reply to this comment
by theused22 November 7, 2008 3:47 AM PST
Why i have both the iphone and a mogul and i must say i do love the interface of the iphone WM is alot better by far, over 12,000 apps and counting that are free most customizable OS out by far.
by bubblebathgirl November 6, 2008 8:54 PM PST
Great news, albeit, not surprising.
Reply to this comment
by MasterElwood November 6, 2008 10:24 PM PST
to jtaylorhoopla:
Since when can the Iphone send MMS Messages?

Btw: I have a 3G and its NOT a smartphone. You canīt edit excelsheets, you donīt have a good or even decent texteditor - you canīt even send attachments with emails.

ITS A TOY! A good toy and i love it - but its not for work (yet)
Reply to this comment
by montex66 November 7, 2008 12:22 AM PST
There is no reason that the iPhone can't do all of these things. You forget that this platform is very young and I have every reason to expect that these functionalities will be added at some point in the future with a simple software update that is free and doesn't require the purchase of a new handset.

Having said that, just because there are features you want that are not included now, doesn't mean its not a smartphone. iPhone is easily the "smartest" phone I've ever had. And you may be surprised to learn that not every business person on this planet needs to edit excel documents on his phone.
by random truth November 7, 2008 2:35 AM PST
The blackberry cant edit excel, word, or powerpoint docs either. (out of the box).
by oassaf November 6, 2008 10:34 PM PST
MasterElwood, I agree...I have an iPhone and I keep forgetting that I cant add attachments to emails. Which is ridiculous. Even when emailing a photo you can only email 1 at a time. Also why does this thing not even have support for iWork documents?

And no im not just bashing the iPhone, I have one and I love using but lets stop playing blind to reality. For a phone that brought such a technological jump in a sense, it is missing very basic features of a smartphone. Forget MMS simply not being able to edit, or download a spreadsheet to my iPhone is a lack of it being a smartphone, not being able to attach anything to an email is ridiculous.

Its almost ready for work...the iphone just worked its way up from the stock room to office intern
Reply to this comment
by random truth November 7, 2008 2:37 AM PST
yea, they really need to give the iphone a real filesystem that is accessable with-out a jailbreak. After that happens then applications like photo editors, iwork, msoffice, etc become viable options.
by UKStory1355 November 7, 2008 7:37 AM PST
I also agree 100% about the iPhone not being a true smartphone, yet. I own an iPhone, a WM Smartphone, and a Blackberry. Of the three, the iPhone is a toy, but an AWESOME one. There is no better multimedia device on the market right now, but the lack of MMS should be embarrassing for them (my grandmother can send MMS on her Jitterbug, but I can't on my $400 iPhone?). A WimMo smartphone is extremely capable and can do anything; however, like Windows, it is a super slow memory hog that sucks RAM almost as fast as it sucks the joy out your life while using it. The Blackberry doesn't do music or movies as well as the other two, but is as snappy as the iPhone and almost as versatile as Windows. Most carriers include some form of office editing on the BB and it also has thousands of applications.

The iPhone is my primary phone right now because of the music and video experience and the fact that most of my iTunes are DRMed so I can't move my music over to a real smartphone yet. The multimedia on the BB is getting better with every OS. So when I leave DRM purgatory, that is probably where I will go.
by the_smurf November 7, 2008 6:17 AM PST
The iPhone is not a smartphone. Niether is the Instinct. Neither are the BlackBerry's. These simple facts make the article rubbish.
Reply to this comment
by oassaf November 7, 2008 11:09 AM PST
No I think its pretty certain that a blackberry is a member of the group currently defined as a smartphone. The other 2 no, but blackberrys yes
by Rick Cavaretti November 7, 2008 7:25 AM PST
Its a nice device, but good luck keeping up those sales numbers in the recession.
Reply to this comment
by b_baggins November 7, 2008 9:16 AM PST
Right. Because only Apple's sales numbers will drop.
by bblackmoor November 7, 2008 2:37 PM PST
Congratulations to Apple. They should enjoy this well-deserved market dominance while it lasts (which won't be long, now that Android phones are finally hitting the market).
Reply to this comment
by MC1171611 November 13, 2008 7:21 PM PST
Windows Vista: buggy, IT-intensive, $300+, 70%+ market share

OS X: Sleek, user-friendly, currently virus-free, $129, 18%+ market share

Linux: Open Source, some distros user-friendly, FREE, ~7%

Free and Open Source doesn't mean it's going to dominate the market, buddy. Heck, one of the only reasons Linux is so popular among geeks is the Open nature of the platform. Otherwise it would largely be a dead OS (and I have nothing against Linux, don't get me wrong).

Apple, like usual, released and improved a product that is now the #1 selling phone in the US, little more than a year after releasing the first model. Apple is trending upward, and currently shows no indication of slowing that trend. Be realistic.
by ace10134 November 7, 2008 7:20 PM PST
Still sticking to Windows Mobile. I love editing documents on my phone with my full keyboard. Apple's got nothing like that.
Reply to this comment
by Perry_Clease November 8, 2008 6:40 AM PST
Your right about that, there is no keyboard input for the iPhone.
by photog_7 November 9, 2008 7:35 AM PST
I agree about the keyboard. If I could add just one feature to my iPhone, it would be an external keyboard. Anything other than a very brief reply to an email is just painful! That said, it's still a smartphone.
by atish505 November 9, 2008 3:35 PM PST
I am using the G1 now and love its keyboard and OS. It has an excellent OS and very stable unlike the Windows Mobile (LG Prada) I had that would freeze up from time to time for no reason and was a pain to work with.

Still, typing anything more than an SMS or short email is painful unless there is a provision to attach regular keyboard through USB or Bluetooth Interface.

Good to know that Apple with Just One model out for only a few months outsells all Windows Mobile phones from more than a dozen Microsoft partners, that have been selling these models for a few years now.

Congratulations Apple and way to go.
by TomMariner November 9, 2008 4:33 AM PST
Let all of us who turn ideas into products take notice -- Innovation means marketplace rewards!
Reply to this comment
by Spanwite November 9, 2008 7:54 AM PST
How many Carrier Apple has in each Country? 1
How many different Phone Apple has on the Market?1
How many Years is Apple on the Market?>1
And what have the others?
How many Phones from Rim and Msoft, for how long?
It seems to me they produced Products everyone wants? Like the big three Car maker? Until they get forced to take a new direction showed from a newcomer. Quantity vs. Quality.
By the way I don't have a iPhone nor a Computer from them.
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