Critics Are Wrong - The Smartphone Market is Not Peaking

New figures released by Gartner show that despite fears of the smartphone market peaking, adoption rates continue to rise.

According to Gartner, 456 million phones were sold in the third quarter—up 5.7 percent. Devices based on Apple AAPL’s iOS, Microsoft MSFT’s Windows Phone, Blackberry BBRY and Android devices, better known as smartphones, accounted for 250 million handsets—about 55 percent of the total.

Last year, 171 million smartphones were sold in the same quarter accounting for 40 percent of the total.

In Q3 of 2013, phones on the Android platform made up 82 percent of all smartphone sales in the three-month period. Samsung SSNLF, the company most synonymous with Android phones, held a 32 percent market share of all Android adoptions.

But Samsung may be showing signs of peaking. While other manufacturers continue to gain share, Samsung remained flat year over year. The report said that other competitors had a more user-friendly platform which might be the cause of the peak.

Sequentially, the numbers look good as well. In Q2 of this year, Gartner found that smartphones overtook feature phones in total sales for the first time. While not all analytics firms agreed, Gartner said that Android had a 79 percent market share while rival analytics firm IDC said it was likely 80 percent. By either number, the platform gained share in Q3.

What About Apple?

Apple gained one percentage point of share coming in at 6.7 percent of total sales for the quarter but according to TechCrunch, the key quarter to watch is Q4—the current quarter.

Q3 results don’t take into account sales of the iPhone 5S and 5C, largely believed to be strong sellers for Apple.

Anshul Gupta, principal research analyst at Gartner said, “While the arrival of the new iPhones 5s and 5c had a positive impact on overall sales, such impact could have been greater had they not started shipping late in the quarter. While we saw some inventory built up for the iPhone 5c, there was good demand for iPhone 5s with stock out in many markets.”

Bullish on Microsoft

Gartner says that the big winner this quarter is Microsoft. According to the report, Windows Phones grew 123 percent. Gupta says that the company’s recent acquisitions will “unify effort and help drive appeal of [the] Windows ecosystem.”

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