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Apple (AAPL) Reclaims Crown of Top Smartphone Maker From Samsung

Apple iPhone ()

Apple iPhone ()

Can anything stop Apple (AAPL) in 2017? The Cupertino-based tech giant, which has been on a winning streak over the past year, just did something it hasn’t been able to do in two years: Call itself the world's top smartphone company.

According to data just released research firm Gartner, Apple has surpassed Samsung (SSNLF) in terms of unit sales, relegating its South Korean rival to second place. Gartner noted that Apple, which now controls 17.9% of the global smartphone market, sold 77.04 million iPhones during the fourth quarter of 2016, narrowly beating the 76.78 million sold by Samsung.

The difference of 256,000 units is the closest the two companies have been from each other, said Gartner. But it was just enough to grant Apple the smartphone crown by 10 basis points to Samsung, which ended the quarter with a global smartphone market share of 17.8%. You would have to go all the way back to the fourth quarter of 2014 to find Apple was the undisputed smartphone leader.

"Samsung's smartphone sales started to drop in the third quarter of 2016, and the decision to discontinue the Galaxy Note 7 slowed down sales of its smartphone portfolio in the fourth quarter," said Gartner analyst Anshul Gupta, in a statement. During the third quarter of last year, Samsung was forced to recall millions of Galaxy Note 7 due to exploding batteries. Apple, meanwhile, capitalized on Samsung’s misfortune ramping up iPhone production at various points in the last six months.

Last month Apple reported its fiscal 2017 first quarter earnings results that not only beat Wall Street estimates on earnings per share and revenue, Apple also topped analysts’ forecasts for iPhone unit shipments, selling 78 million devices, almost 1 million more than analysts were looking for. “We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” said CEO Tim Cook in a statement.

By contrast, in Samsung’s third quarter, its mobile segment suffered a decline in profits, which was not a surprise. Though fourth quarter profits came higher, thanks to better-than-expected demand for the Galaxy S, there’s still the question of whether the Samsung can regain the customers it lost to Apple, which — thanks to the success of the iPhone 7 and iPhone 7 Plus — continues to boast gaining an increase number of switchers from other platforms.

Apple’s success have translated to increased momentum in AAPL stock, which closed Wednesday at a new 52-week high of $135.51. The shares have risen 17% year to date, while climbing 44% over the past year. And with services revenue, which generates higher profit margins, taking a larger portion of Apple’s business, AAPL stock — despite trading at all-time highs — remains a bargain.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Richard Saintvilus

After having spent 20 years in the IT industry serving in various roles from system administration to network engineer, Richard Saintvilus became a finance writer, covering the investor's view on the premise that everyone deserves a level playing field. His background as an engineer with strong analytical skills helps him provide actionable insights to investors. Saintvilus is a Warren Buffett disciple who bases his investment decisions on the quality of a company's management, its growth prospects, return on equity and other metrics, including price-to-earnings ratios. He employs conservative strategies to increase capital, while keeping a watchful eye on macro-economic events to mitigate downside risk. Saintvilus' work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. You can follow him on Twitter at @Richard_STv.

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