Apple dominates struggling U.S. smartphone market in Q1, Strategy Analytics says

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Apple dominated a waning U.S. smartphone market in the first quarter of 2017.

Apple dominated a waning U.S. smartphone market in the first quarter of 2017, Strategy Analytics reported.

The United States is the world’s second-largest market for smartphones in terms of volume, according to Strategy Analytics, but is clearly the most important region worldwide for vendors of high-end handsets. Samsung “usually excels” in America during the first quarter, the market research firm said, but its impact was limited after the release of its flagship Galaxy S8 and S8+ was reportedly delayed.

“The most recent generation of iPhones by Apple, the iPhone 7 Plus and the iPhone 7, retained their double lead in terms of shipments volumes in the country, but some of the older models like the iPhone 6s continued to sell fairly well, too,” Strategy Analytics said in an announcement. “Samsung managed to hold out in the top-10 list as well, with the Galaxy S7/S7 Edge and the Galaxy J3 (2016) in particular. LG had a strong quarter, with the LG V20 performing particularly well.”

The top three best-selling models accounted for one-third of the overall market, according to the firm. But shipments declined by 4% year over year, underscoring stalled demand in a saturated market where upgrade cycles continue to slow.

Some analysts believe the global smartphone market will show renewed signs of life later this year as Samsung’s new flagship handsets gain traction and as Apple is expected to release a dramatically new iPhone model.

"The first quarter smartphone results further prove that the smartphone industry is not dead and that growth still exists," Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers, said last month in a release. "We believe the industry will show some rebound in 2017, and the strong first-quarter results certainly support this argument.”

But U.S. carriers remain concerned that demand for newer smartphones is lagging as users hold on to older phones for longer periods of time. The industrywide move toward equipment installment plans rather than lengthy contracts prevents operators from subsidizing handsets, which gives consumers more visibility into the true cost of their phones.

And that trend is having a clear impact on the bottom line of network operators.

“I would suggest to you I think it is a more permanent change in the environment because of the change in who pays for it,” AT&T CFO John Stephens said during the carrier’s earnings conference call last month, according to a Seeking Alpha transcript of the event. “I clearly believe it is a permanent change from where we were in the subsidy model, and I believe that the upgrade rates will be down on a permanent basis.”