Market Overview

iPhone Shipments Soared 46% in 2012

iPhone Shipments Soared 46% in 2012

Shares of Apple (NASDAQ: AAPL) have declined more than 21 percent over the last six months. The company's losses have been so severe that they have diminished Apple's one-year gains to less than one percent.

Based on this alone, it may appear that Apple is suffering. The firm's quarterly results paint an entirely different picture.

To see how Apple is truly performing, investors should dig deeper than the company's latest report. Case in point: the total number of iPhone shipments in 2012.

While Samsung leads the pack with more than 200 million smartphones shipped worldwide (this figure encompasses a wide array of devices, not just the Galaxy S I, II and III), Apple shipped an astonishing 135.9 million units.

According to researchers at IDC, this is a 46.9 percent increase over the number of iPhones that were shipped in 2011, during which Apple shipped 93.1 million units.

Investors were very impressed with Apple's success at the time. By shipping just over 93 million iPhones (more than a third of which were sold in the fall quarter alone), Apple delivered the single most popular line of smartphones.

Samsung, which manufactures a whole host of smartphone models (along with dozens of feature phones), shipped 94.2 million smartphones in 2011. Shipments more than doubled in 2012 as the company raised its global market share from just 19 percent in 2011 to 30.3 percent in 2012.

That level of growth is undoubtedly the most impressive of any tech company. It shows the phenomenal potential that Samsung has in the smartphone industry.

Based on raw growth data alone, Samsung is the clear winner. Apple is no slouch, however. The company's shipment numbers are arguably more impressive than Samsung because Apple managed to send more phones to retailers without greatly increasing its market share.

In 2011, Apple owned 18.8 percent of the global market. According to IDC, its market share rose to 19.1 percent in 2012.

How can Apple's shipment growth be so large while the company's market share remains all but unchanged?

Apple is essentially acquiring new customers as the market rises. As long as the market continues to soar, shipments of new and existing iPhones will continue to increase.

That will change once the market stabilizes, but it does not mean that Apple's sales will decline. Rather, they might simply stop increasing. When that happens, Apple will need to continue inspiring consumers to buy each iPhone the company releases.

If Apple fails in this regard, investors will finally begin to see the massive declines that they currently fear.

Oddly -- and perhaps ironically -- Research In Motion (NASDAQ: RIMM), the current golden child on Wall Street, experienced significant sales and market share declines in 2012.

In 2011, RIM owned 10.3 percent of the market and shipped 51.1 million smartphones. One year later the company's market share declined to 4.6 percent. Consequently, RIM only shipped 32.5 million smartphones in 2012.

Follow me @LouisBedigianBZ


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