Apple surpasses Samsung as global phone maker

For the fourth quarter of 2014, Apple reported a record-breaking profit of $18 billion — which is the largest ever reported by a public company – while Samsung said its profits actually dropped 37% year-on-year, Forbes.com reported.

After those results, there was speculation that Apple had become the world’s largest smartphone manufacturer again. IT research firm Gartner is now claiming that Apple has narrowly surpassed Samsung in smartphone sales.

Apple sold 74.8 million iPhones compared to Samsung’s sales of 73 million smartphones in the fourth quarter of last year. This is a dramatic change from one year earlier when Samsung sold 83.3 million smartphones against Apple’s 50.2 million iPhone sales. Apple’s win over Samsung in Q4 2014 is the first time that the Cupertino giant sold the most number of smartphones globally since 2011. For Q4 2014, Apple hit 20.4% for the global smartphone marketshare, surpassing Samsung’s 19.9% share. Lenovo  took the third place spot through its sales of Lenovo and Motorola mobile phones for the fourth quarter of 2014.  Lenovo hit a 6.6% market share, which is 47.6% growth year-over-year. Lenovo acquired Motorola’s mobile division in October 2014.

“Samsung’s performance in the smartphone market deteriorated further in the fourth quarter of 2014, when it lost nearly 10 percentage points in market share,” said Gartner’s principal research analyst Anshul Gupta in a company statement. “Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013. This downward trend shows that Samsung’s share of profitable premium smartphone users has come under significant pressure.” In a separate study, research firm Strategy Analytics claimed that Apple accounted for 89% of all smartphone profits for Q4 2014 at an estimated $18.8 billion compared to Android’s $2.4 billion. Samsung’s response to the iPhone 6 and the iPhone 6 Plus is the Galaxy S6 and the Galaxy S6 Edge, launching worldwide on April 10th — which should drive up the numbers for the Korean giant in 2015.

Chinese mobile company Xiaomi is nipping at the heels of the major smartphone players by offering high quality Android devices at a lower cost. Out of all of the global smartphone makers, Xiaomi saw the largest jump at triple its sales compared to a year ago. Xiaomi shipped 18.6 million smartphones in Q4 2014, behind Huawei’s 21 million and Lenovo’s 24 million.

Apple is currently dominating the premium phone market and Chinese mobile phone companies are offering quality devices in the lower cost market. This is causing Samsung to feel the pressure in both markets. Samsung has to stay innovative to maintain its strong marketshare, otherwise its profits will continue to drop. Gartner research director Roberta Cozza said that Samsung can secure its longer-term differentiation by offering a solid ecosystem of apps, content and services.

Even though Samsung suffered a loss during the fourth quarter of 2014, they still remained the largest smartphone vendor for the year. In 2014, Samsung shipped about 307.5 million smartphones while Apple shipped an estimated 191.4 million devices.

How many smartphones shipped around the world altogether in 2014? About 1.2 billion smartphones were shipped in 2014, up from 969.7 million in 2013. Statistically, every two out of three mobile phones that shipped last year were smartphones. Smartphones are simply becoming ubiquitous around the world and it will be interesting to see who comes out on top over the next few quarters.