The Fourth of July did not bring much good news for the smartphone vendors in the United States of America. As against the popular belief, there is still room for the smartphone vendors to expand their business in the US, provided they catch the right buyers. The US population is 318 million, out of which only 169 million people have a smartphone, reports ComScore. The smartphone penetration against the population has just crossed the 50% mark, leaving a huge opportunity for the vendors. In addition to the first time buyers, OEMs can target the people switching or upgrading from one smartphone to another. On an average, Americans hold on to their smartphones for a period of 21 months to 24 months.
In the latest figures of the three months ended on May 2014, 70% of mobile phone users are using smartphone in the US. Among all the OEMs, Apple Inc. (NASDAQ:AAPL) was ranked the topmost smartphone vendor with 41.9% market share, while in the platform segment Google Inc. (NASDAQ:GOOG) owned Android led the market by capturing more than half of the smartphone OS market. In app usage section, Facebook Inc. (NASDAQ:FB) app remained intact on the top position with the greatest reach of 76%.
Growth of Android and Windows Phone OS Stagnating in US
Android is not only the leading smartphone OS globally but also in the US, though its subscriber share has declined marginally to 52.1% in the three months ended on May 2014 from 52.4% for the same period in 2013. According to another report, the sales share of Android in the US smartphone market stood at 61.9% in the three months ended on May 2014. However, when compared to the previous three months ended on February 28, 2014, Android OS did not record any change in its subscriber market share in the quarter ended on May 31, 2014. Apple came in second with 70.88 million subscribers that resulted in 41.9% of smartphone subscribers share in the three months ended on May 31, 2014.
Predictably, the share of Blackberry OS and Symbian went down, both year-over-year and quarter-over-quarter. Both the OS failed to capture a sizable number of subscribers. However, despite of introducing the all-new Lumia series smartphones, Windows Phone OS failed to register any growth in its subscriber base. Its market share went down to 3.4% in the three months ended on May 2014 from 4.8% in the quarter ended on May 2013.
The increasing saturation of smartphone market in the US is the cause of a worry as this signifies that the majority of users are not the first-time buyers responsible for new market development. These are the people who are switching between smartphones. The other important aspect worth noting here is that consumers are not switching between the platforms; they are continuing with the same OS while switching to a new smartphone.
Apple Leads the Smartphone Market but Samsung Catching Up Fast
Apple and Samsung Electronics Co Ltd (KRX:005930) are the only companies to record positive yearly and quarterly growth in the US. Their smartphone market share went up to 41.9% and 27.8%, respectively in the three months ended on May 2014. Samsung recorded a growth of almost 5% point over the year, which is more than the combined growth of all the companies but Apple. In spite of dealing aggressively in the Android segment and launching devices that are value-for-money, LG Electronics Inc (KRX:066570), HTC Corp (TPE:2498) and Motorola had failed to capture any sizeable market share. The three companies did not secure even one-fifth of the market, combined, during the three months ended on May 2014.
Apple is the leading smartphone vendor in the homeland and chances are high that the company will record an explosive growth in the US smartphone market after the launch of iPhone 6. The next two quarters may be good for the iPhone maker as it might be able to poach 35% Android users who are willing to ditch their the platform for the larger iPhone 6.
The Top-5 Apps Remain the Same
The desire to stay connected remains strong among the smartphone users in the US as the social networking app Facebook reached the maximum audience followed by Google Play and YouTube. The increasing demand of videos is making YouTube reach out to the maximum audience. The list of top-15 apps remains the same more or less as compared to the three months ended on February 28 this year, a minor swapping in the ranks is visible though. The majority of apps in the top-15 list belong to utility and entertainment category. Since the users have an upper limit to the usage of apps, this is not likely to change in the coming months.
The US smartphone market has been unchanging for many reasons. The disinterest among the users to switch between the platforms is one of the reasons. US is a developed country and the users are not swayed by the cost of smartphones. They invest more in the premium brands and premium smartphones.