Samsung has become Apple’s chief nemesis in court and on retail shelves. The South Korean smartphone maker now has twice the market share as the Cupertino, California-based iPhone maker, new research finds. According to IDC, Samsung controlled 31.3 percent of the smartphone market during the third quarter, handily beating Apple’s 15 percent share.

The two companies have the smartphone market largely to themselves, with their nearest competitor – Blackberry maker Research In Motion – controlling only 4.3 percent, according to IDC. Nokia even fell from the top five, shipping just 82.9 million handsets in the previous quarter, a 22 percent drop from the same quarter in 2011…

Per IDC, Samsung’s share of the smartphone market grew from last year’s third quarter 22.7 percent, accounting for nearly a nine percent increase. Apple’s 2012 third quarter market share rose less than three percent from its 2011 third quarter, IDC announced.

“Samsung looks to be running away from the pack while Apple’s new product portfolio continues to eat into its decreasing gross profits”, ABI Research senior analyst Micheal Morgan said.

According to Morgan, Apple must ship more than 94 million iPhones in the fourth quarter to keep pace with a 96 percent shipping increase reported in 2011.

Global handset and smartphone shipments in Q3 2012. Source: ABI Research.

Thursday, Apple and Samsung released back-to-back earnings statements.

The iPad maker announced an $8.2 billion third-quarter profit on revenue of $36 billion. Apple saw it’s fiscal third-quarter gross margin slip to 40 percent, down slightly from 40.3 percent a year ago. The company forecast $52 billion for the first quarter of fiscal 2013, which will cover the all-important holiday season.

For its part, Samsung announced a $7.4 billion fiscal third-quarter profit. The South Korean company’s mobile unit powered 69 percent of its overall profit, Reuters reported Friday. Both companies have concerns about the future, analysts say.

“The biggest concern for Samsung is that its smartphone growth momentum will slow”, Hana Daetoo Securities’ Nam Dae-jong told Reuters. Also troubling is whether Samsung can replace income lost as Apple shifts to other suppliers for chips.Experts also believe it will be some time before Samsung’s Galaxy Tab approaches the iPad’s popularity.

The fuel of Samsung’s smartphone market share growth could also be a concern for Apple: the rise of the low-cost handset. Samsung has increased its market share by offering “a range of smartphone products at ever lower price points”, according to ABI.

The research firm also believes it will be difficult for Apple to go after this growing smartphone audience while still producing profits at a level to satisfy investors.

“The strain of rapid growth makes Apple appear to be running out of room at the high-end”, ABI’s Jeff Orr said. Trying to keep profit margins high while also introducing new products “make it increasingly difficult for Apple to move downstream to the rapidly growing low-cost smartphone market”, said Orr.

What do you think? How can Apple fight off Samsung while straight-jacketed by Wall Street expectations?

Must a low-cost iPhone appear to compete against rivals?

  • No, people will still buy Apple products regardless of the price. Apple can keep their prices of their iPhones the same.

    • Remy De la Cruz

      Roger, are you sincerely saying you wouldnt want a cheaper iphone? say $500 down from $600? mind you, it cost them around $160 to make one. Im just asking, not bashing or anything. BMW is my fave car brand, and If they can sell me an M3 for freaking 40K, i would buy one right away. i dont care my neighbor buys one, too, they are good cars regardless of the price…

      • Simple: I’d just buy an iPhone with a contract.

      • Remy De la Cruz

        well not everybody likes to be under a contract, but that solution works for you only and people here in US, including me. Not like you should care about others, but someone in the market, for an unlocked iphone is looking at $800+ iphone and also looking at about $400-600 for the competitors. From a competition standpoint, Apple has a big disadvantage with customers with not so deep pockets. Im not sure about you, but i’ve seen people wanting iphones but cant afford it… My point is because of the high premium prices, their share is shrinking.

  • Dan

    Apple will keep selling phones whatever they do. Although they could win back some customers from the android market if they added some features (ie: micro sd card).

    • willie_walk

      Or customization capabilities like those offered by jailbreaking.

      • Lordthree

        Why offer them when you can jailbreak for them? Apple is smart. The more tweaks you have cluttering up your phone the more buggy it is (I’m fully tweaked iPhone 4S btw). With one click you can legally jailbreak and have access to those features, but Apple isn’t responsible if you mess something up. They continue to offer a streamlined experience that doesn’t get reskinned with every iteration. Best of both worlds. Apple is smart.

  • What else do you expect one makes 100s of different models while the other 1 makes 1 primary model per year.

  • CollegiateLad

    Congrats to Sammy and Apple. A lot of good products to choose from this Christmas. Apple will have a blockbuster holiday season. I expect them to smash the $52 billion number with no problems.

  • Apple would be better off by introducing a phone with new home screen features, notification widgets, scrollable wallpapers… Better steal a bit from android, as jelly bean is catching up… Im actually thinkong about selling my 4S for a HTC phone, as no new noteworthy features have been added in iOS 6.

  • Remy De la Cruz

    IMO, new smartphone customers are going to apple, then once they spend few years, they move to Android because of the options, Apple hasnt offered anything new for the past 2 years since it introduced Siri…(maps doesnt count much because they are pretty much late to the party and i dont think ppl are buying iphones cuz of the maps only, otherwise they would have gone with Android’s superior maps). I still have my iphone, but i had a BB from work which i replaced with a GS3 and also upgraded my wife from the iphone 4 to the GS3 this summer and we both like the phone, features and i dont think we are going back. At least I have the options of having 2 phones, and as long i as can jailbreak the iphone, i will keep it. and i would never buy an iphone iI cannot jailbreak, it is just boring.

    • Dan

      exactly what happened with me. Had an iPhone for two years they went android since I wanted expandable memory, larger screen and access to system files

      • Remy De la Cruz

        i enjoy the bigger screen, i can control my phone with one hand, im 5’5″ my wife is 5″ she can do the same too, so no big deal as many people want you to believe. I love my facebook, twitter, gmail, google voice, weather, RSS reader, system widgets. I almost dont even open those apps anymore. it saves me lot of time. The iphone is a great platform, i just think is too limited. I might have about 20-30 tweaks installed to make the experience better. I cant upgrade to iOS6 because i will my lose jailbreak. im not wiling to give them up.

    • yes these are the points i here that samsung will launch in early 2013 galaxy s4
      or samsung name it another but this smart phone have core i 3 procesor and 4gb or 3 gb ram include better screen then apple retina display same size as galaxy s3 but screen size is 5.0 inch .

      • Remy De la Cruz

        what are you talking about? what’s your point?

      • i am talking about future smart phone of samsung , in 2013
        there for wait for two month to announcement from samsung new mobile phone with op i post specifications .

    • Lordthree

      Here have a look at kids who made your plastic, bandwagon phone.

      Is that little girl eatting a pudding cup?

      Have fun supporting child labor and south korea’s economy. Life is good ehh?

  • samsung makes 30 phones apple makes 1….. no singe samsung phone come close to the iPhone ever…lol

    • That’s why the put the phone names on post-its, so they can just tear the old one and write down the current week’s new phone name.

  • TriguyRN

    Apple is not going to lower prices………….

  • dcm5150

    Apple makes a nice phone and there is no doubt they were the innovation behind the current smartphone generation. That being said, people have to admit the the iPhone 5 was simply a phone that made some changes to catch up with Samsung (and many would argue it didn’t even catch up) and not surpass. I find little difference in how “intuitive” iOS is vs Android. My wife has an iPhone and she is always yelling it it because it won’t do what she thinks it should do – not intuitive for her.