Samsung Bursts Out of the 2013 Smartphone Gates but Apple is Still King of the Hill

By Tony Rizzo January 17, 2013

Among the many research firms I interact with, one remains of particular interest to me when it comes to identifying mobile device trends in both the consumer and enterprise markets. That company is ChangeWave, a subsidiary of 451 Research. Over the years, ChangeWave has delivered an uncanny accuracy when it comes to delivering forecasts in the mobile device marketplace. Most recently, I investigated ChangeWave's findings relative to Apple's iOS map program (which concluded and confirmed as it turned out, that Apple Maps was not getting in the way of iPhone 5 sales).

This week, ChangeWave has released a new survey directly targeting the consumer smartphone market. The survey was conducted in December 2012, and the survey panel was made up of a non-trivial 4,061 primarily North American respondents. ChangeWave looked carefully at a number of issues including actual smartphone purchase plans, mobile operating system satisfaction, and this time around screen size as well. Needless to say, in such an explosive marketplace there were lots of interesting things to discover.

As might be expected, given all the current tech media chatter about Samsung, it is clear that the chatter is justified, at least in terms of the Galaxy S III making significant inroads in the higher end of the smartphone market. For December, ChangeWave recorded an all-time high in the North American smartphone market for Samsung. Let's get right to the numbers, shown in the chart below, which provide likely buying patterns over the next 90 days.


Dr. Paul Carton, who heads up ChangeWave's research for 451 Research says, "Consumer buying intent for Samsung smart phones has been extraordinary to start the year. Considering the Galaxy S III has been out for several months we'd normally expect a slowdown by now – but it’s still red hot. We’re also seeing strong interest in Samsung’s large-screen phone – the Galaxy Note II. Super-sized smart phones are taking the industry by storm in 2013.”

As the chart shows, following its launch 19 percent of survey respondents were inclined to purchase the Galaxy S III. In September, there was a predictable drop (though this was aided in part by iPhone 5 speculation at the time). However - and unexpectedly as Dr. Carton points out - in December 2012 likely demand for Samsung smartphones (that is, for all Samsung devices, not only the Galaxy S III) picked up at an unprecedented rate, spiking to 21 percent, a huge eight point gain.

These numbers are for the North American market, but for Samsung this is a huge indicator for how 2013 is likely to shape up globally. With a next generation smartphone highly likely to make an appearance in February at the 2013 Mobile World Congress, things are looking bright for Samsung.

Apple Hardly Thwarted

Though Samsung is out of the gates at a gallop, nothing ChangeWave has uncovered suggests that Apple is now holding a set of losing cards. As shown in the chart below, although in December 2012 there was a marked downturn in the percentage of respondents that claimed they would most likely purchase an iPhone 5 over the next 90 days, the drop was from a ridiculously high 71 percent (also due to iPhone 5 speculation) down to 50 percent, which in fact represents, historically speaking, extremely solid numbers for Apple.

There isn't much of a secret to Apple's ongoing dominance - the desirability for Apple products, which hinges on the Apple cachet that comes with it, remains extremely high, and the chart numbers clearly reflect this. We can also extrapolate from this that Apple's earnings for the holiday season are probably going to be rather substantial.

All of this said, Apple's good numbers do not mask the fact that Samsung's numbers are great. What is it that is driving Samsung's success? A major clue is found in the breakout of Samsung models that consumers plan on buying in the next 90 days. As the chart below highlights, when the 21 percent that are likely to purchase a Samsung smartphone over the next 90 days were then asked which Samsung smartphone they were likely to purchase, the Galaxy S III took first place with a whopping 69 percent share.

The surprise is that the large screen Galaxy Note II, at an unheard of 23 percent is second behind the flagship Samsung smartphone. The impressive demand for the Galaxy Note II clearly confirms that the era of large-screen smart phones is indeed us. 

Importantly, when all respondents who planned to buy a smartphone over the next 90 days were asked the next logical question - what their screen size preference would likely be, a significant 27 percent said they are most interested in a five-inch or larger screen. The chart below shows the rest of the numbers.

The numbers above also show that Apple remains safe - for the moment - with the iPhone's four inch screen size, but clearly larger screens are in demand. With Samsung having leaped ahead in the large-screen smart phone space, does this represent a real competitive threat to Apple? Not likely, says Dr. Carton. "With this level of consumer interest, Apple is perfectly capable of producing a large-screen smartphone that’s virtually a tiny tablet and have it on the shelves long before the next Holiday season.”

Our own position on this is that Apple will indeed enter this market but it will do so on its own terms, with a premium device that will seek to own the high end of this emerging market segment, exactly as it has done with the iPad Mini.

Mobile OS Customer Satisfaction

Finally, ChangeWave asked all respondents to weigh in on their preferred mobile operating system. Here, Apple clearly remains dominant by a significant degree over Android. As the chart below shows, at 71 percent, iOS has a major 23 percentage point advantage over Android. 

But, a truly big surprise here is that users of Microsoft's Windows Phone operating system, at 53 percent, now rank it higher in terms of customer satisfaction than do users of the Android mobile operating system at 48 percent, a powerful sign of strong user satisfaction with Windows Phone 8. Keeping mind that ChangeWave's data is historically accurate in its forecasting, this portends extremely well for Microsoft, and perhaps also suggests that Windows 8 and Windows 8 RT may be more favorably accepted than some might imagine.

However, the real winner here would be Nokia whose very satisfied rating (not shown in our article) jumped to 56 percent this quarter. Nokia has already reported ahead of earnings that Lumia sales are going to be strong, and the ChangeWave finding on the satisfaction level with Windows Phone 8 suggests why this is the case.

Last, and yes, least in the current market is Research in Motion (RIM), which continues to lag, though we need to keep in mind that the survey only takes into account BlackBerry OS 6 and 7. The numbers may turn out completely different next time ChangeWave runs the survey in March 2013. By then, RIM will have launched its BlackBerry 10 OS and its new devices.

It isn't hard to predict that Apple and Samsung will remain the one and two players, but we'll be very interested to see how Windows Phone 8 and BlackBerry 10 do. More than likely, they will gain market penetration not against Apple, but against Android - especially at the lower end of the smartphone market.

TechZone360 Senior Editor

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