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Digitimes Insight: iPhone growth suppressed by rise of Android devices
Luke Lin, DIGITIMES Research, Taipei [Friday 3 June 2011]

The arrival of the iPhone 4 on Verizon Wireless effectively buoyed the iOS's share of the US smartphone market by nine percentage points sequentially in the first quarter of 2011. However, Verizon's actual iPhone 4 sales for the quarter reached only 2.2 million units, far below industry watchers' previous estimates of 3-4 million units.

Verizon's lower-than-expected iPhone 4 sales mean that it was only a temporary setback for Android. Digitimes Research believes that Android will resume its growth path in the US starting the second quarter.

In fact, Apple's actual shipments of iPhones have missed its internal estimates given to supply chain partners over the recent quarters. The gap between the estimated and actual iPhone shipments expanded to 39.4% in the first quarter of 2011 from 29.3% in fourth-quarter 2010, implying that demand had been overestimated.

A total of 18.65 million iPhones were shipped in the first quarter compared to 16.24 million units in the fourth quarter of 2010. Both numbers came below Apple's targets of 21 million for the fourth quarter 2010 and 26 million for the first quarter of 2011.

Digitimes Research predicts that about 13.5 million iPhones will be shipped in the current second quarter of 2011, still below Apple's planned sales of 18 million units.

With more Android-based devices hitting store shelves in the second half of 2011, the Google smartphone OS will further widen its gap with iOS thanks to its more complete ecosystem, according to Digitimes Research.

Digitimes Research: Forecast and actual iPhone shipments, 4Q10-2Q11 (m units)

Note: 2Q11 actual shipments are based on estimation by Digitimes Research.
Source: Digitimes Research, June 2011

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