Apple 2.0

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Needham: Android's market share peaked in March

June 21, 2011: 7:11 AM ET

After the Verizon iPhone launched in the U.S., Android suffered its first quarterly decline

Click to enlarge. Source: Needham & Co.

The chart at right, taken from a note Needham's Charlie Wolf sent to clients Monday, could be labeled "The Verizon iPhone Effect."

Using IDC data, Wolf shows Apple's (AAPL) share of the U.S. smartphone market gaining 12.3 percentage points to 29.5% in the March quarter while Android's share in the U.S. fell from 52.4% to 49.5% — its first sequential loss in any region of the world since early 2009.

"In our opinion, this is just the beginning of Android's share loss in the U.S.," Wolf writes. "The migration of subscribers to the iPhone on the Verizon network should accelerate this fall when Apple coordinates the launch of iPhone 5 on the GSM and CDMA networks. The iPhone could also launch on the Sprint and T-Mobile networks."

Despite Apple's gains in March, Wolf describes the launch of the iPhone for Verizon (VZ) in February as "tepid."

"One reason Apple delayed the launch of iPhone 5 until September," he writes, as if he were privy to Apple's strategic thinking, "is that it reportedly plans to coordinate the launch of the GSM and CDMA versions of the phone. To do so in June would likely have upset Verizon subscribers who purchased iPhone 4 in the preceding months. It's our expectation, then, that the anticipated surge in iPhone sales on the Verizon network is likely to occur this fall after Apple launches iPhone 5."

Below the fold: Wolf's fever chart of the worldwide smartphone market. Note the sharp decline of Nokia's (NOK)'s share over past year and the gradual leveling off of Android's share growth after Google's (GOOG) extraordinary run in 2010.


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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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