During the first quarter of 2023, Apple lost the No. 1 position in global smartphone market share to Samsung. But that was largely expected.

What was not expected, however, was Apple's solid first quarter iPhone performance. The period is typically not Apple's best, considering the company usually releases its newest iPhones during the last quarter of the year, which often propels the company to the top spot in the global smartphone market.

But Apple managed to grow its iPhone sales year-over-year even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate cited by CNBC.

Following the release of Apple's first quarter 2023 results, analysts praised the iPhone vendor's performance as well as its overall global momentum in the rapidly cooling smartphone market.

"Apple outperformed the market due to several factors. Firstly, the stickiness of its ecosystem prevents its customers from choosing a cheaper smartphone even in times of economic difficulty. Secondly, with sustainability becoming a priority for many, not only has Apple captured nearly half of the secondary market, it is also attracting users who are willing to spend more for longer-lasting devices. Thirdly, it is the preferred brand for Gen Z consumers in the West and is thereby positioning itself for sustained success," Research Director Jeff Fieldhack, of research and consulting firm Counterpoint Technology Market Research, wrote on the company's website. "So, Apple is able to weather economic and other fluctuations better than its rivals while enjoying unflinching loyalty."

Others largely agreed.

"Due to production disruptions at Foxconn's Zhengzhou plant in December of last year, Apple was unable to supply the necessary quantities for the most important sales season, Christmas, and the end of the year. As a result, some of Apple's production was carried over to the first quarter of this year. In order to clear inventory in major markets such as China, early this year, the company conducted a promotion to lower the selling price of the new iPhone. This resulted in year-on-year growth rate of shipments in 1Q to perform relatively better compared to other OEMs [original equipment manufacturers]. Apple's price promotion of the new iPhone in the first quarter is very unusual. This seems to be a strategy to lower inventory to prepare for the sluggish smartphone market expected in the first half of this year," wrote Jusy Hong, a senior manager at research and consulting firm Omdia. Omdia is owned by the same parent company as Light Reading, Informa.

According to Counterpoint, Samsung replaced Apple as the biggest smartphone player in the first quarter of 2023, driven by sales of its midrange A Series phones and its recently launched S23 series. However, Apple's year-over-year shipments declined at the slowest pace compared with the rest of the market's top players. That helped Samsung record its highest-ever first quarter market share of 21%.

Figure 1: Samsung shipped more smartphones than any other vendor in the first quarter of 2023.
Click here for a larger version of this image.
(Source: Counterpoint)

The Huawei factor

According to Qualcomm CEO Cristiano Amon, there's another factor at play in Apple's favor. "Huawei declined in share," he said during his company's quarterly conference call this week, according to Seeking Alpha. "Apple picked a significant amount of their share."

Amon explained that US sanctions against China's Huawei have dramatically cut into the vendor's share of the Android smartphone market. That, he said, cleared a path for Apple – one of America's biggest companies – to capture much of Huawei's losses.

To be clear though, the smartphone market isn't standing still. Google this week took the wraps off its first Pixel-branded folding phone.

Samsung has pioneered the folding phone sector, though other companies including Huawei have signaled their interest in participating in that segment of the device market. The segment is also noteworthy considering Apple does not have a folding phone and there is no indication that situation will change anytime soon.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano