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According to a new IDC report, the smartphone market passed an important milestone in 2013 when worldwide shipments surpassed the 1 billion mark for the first time, driven by continued momentum from Android and iOS. The report noted that Android and iOS accounted for 95.7% of all smartphone shipments in the fourth quarter of 2013 (4Q13), and for 93.8% of all smartphone shipments for the year. This marked a 4.5-point increase from the 91.2% share that the two platforms shared in 4Q12, and a 6.1-point increase from the 87.7% share they had in 2012.

 

"Clearly, there was strong end-user demand for both Android and iOS products during the quarter and the year," says Ramon Llamas, Research Manager with IDC's Mobile Phone team. "What stands out are the different routes Android and Apple took to meet this demand. Android relied on its long list of OEM partners, a broad and deep collection of devices, and price points that appealed to nearly every market segment. Apple's iOS, on the other hand, relied on nearly the opposite approach: a limited selection of Apple-only devices, whose prices trended higher than most. Despite these differences, both platforms found a warm reception to their respective user experiences and selection of mobile applications."

 

While smartphone market growth remained strong in 2013, it should be noted that the era of double-digit annual growth has only a few years remaining. In the meantime, handset vendors are doing all they can to capture demand while it is still present. Worldwide smartphone marketing campaigns continue to stay focused on flagship devices like the iPhone 5S, Galaxy Note 3, and the HTC One, yet research shows that consumer buying is rapidly shifting toward products with significantly lower price points.

 

While Android's success continues to mount, profits continue to be vaporized by Apple. According Raymond James analyst Tavis McCourt, "Android may be the top-selling smartphone platform, but this is not translating into success for most vendors. Apple is said to have taken 87.4 percent of profits (before interest and taxes) in the fourth quarter of calendar Q4…" Last November, an IDC chart showed Android as the number one operating system with 81% market share with Apple's iOS holding 12.9%.

 

So while the crowd on Wall Street keep hailing Android and Samsung the winners of market share, the reality remains that Apple is the one raking in the profits.

 

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