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Conflicting Reports Show Apple Losing International Market Share (AAPL)

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A report released Tuesday revealed that Apple (NASDAQ: AAPL) is losing market share in Western Europe while another report showed that Android devices pushed Apple out as one of the top five phones in India.

First, Europe. IDC reported that during the first quarter of 2013, the Western European phone market shrank due to lower shipments of phones. Total shipments dropped 4.2 percent to 43.6 million units. Total smartphone shipments increased 12 percent year over year but that marks the lowest growth rate since IDC started tracking shipments in 2004.

The slowdown is blamed on a challenging economy where a lack of disposable income is forcing consumers to hold on to phones for longer periods of time.

But that doesn’t give Apple an excuse. The report found that Samsung saw a 31 percent year over year increase while Apple dropped 11 percent. These numbers give Samsung a 45 percent market share compared to Apple’s 20 percent. Sony (NYSE: SNE) is third with 10 percent market share.

The report stated that the European smartphone market is now in its “second wave.” In the beginning, customers wanted premium phones full of bells and whistles. A more budget-minded, practical customer is emerging that doesn’t want or need the highest priced model. This is not good news for Apple, a company that markets its products as premium-level merchandise.

Next, The Times of India reports that Apple was pushed out of its top five spot in the country while Android handsets now hold a 90 percent market share in the country. According to the story which quotes IDC Indian data, Apple is seen as a niche handset in the country and like Europe, saw a dip in shipments to the country in Q1.

Apple came in fifth behind Samsung, Micromax, Nokia, (NYSE: NOK) and Sony but remains in the top-five by value. Just as it is around the world, the iPhone is highly profitable compared to Android devices.

But the data seems to contradict a report by Credit Suisse that showed a 400 percent increase in sales during the first quarter. Analyst Sunil Tirumalai wrote, “…our discussions with handset retailers indicated that iPhone sales went up 3-4x, forcing companies to respond."

Even The Times of India reported in February that iPhone sales were up shapely during the time period.

Which report is right?

Disclosure: At the time of this writing, Tim Parker was long Apple.

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Oct 2014Cantor FitzgeraldMaintainsBuy
Oct 2014BarclaysMaintainsOverweight
Oct 2014Morgan StanleyMaintainsOverweight

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