The Apple retail store in Palo Alto, California

Apple rivals are catching up industry experts say

Apple's reign over the smartphone market faces an uncertain future as rivals are catching up, according to industry experts.

The firm's share price has slipped below $500 for the first time in 11 months as investors reacted to reports suggesting its latest iPhone is falling further behind alternatives running Google's Android software.

The slump comes as electronics giant Samsung reported that global sales of its Galaxy S smartphone series have passed 100 million since the first model was launched less than three years ago.

It reached the milestone faster than its competitor – it took about four years for Apple to sell more than 100 million iPhones.

Experts today said the future remains uncertain as Apple struggles to retain its grip on the market.

Ernest Doku, telecoms expert at price comparison site uSwitch, said the flexibility of the Android operating system had seen it adopted by many manufacturers, including Samsung, allowing them to offer a huge range of devices across the market.

He said Apple's last two releases had been a "change of tack" for the manufacturer.

"Traditionally Apple has been associated with carving their own path in the technology market, going their own way, creating devices that are very much premium.

"With the iPhone 5 and the iPad Mini, these devices did reflect a manufacturer that was on the defensive."

He said Apple was changing the way it operated, bringing out new models of devices in quicker succession in order to appeal to customers.

"The alternatives that the likes of Samsung are providing are not only cheaper but are providing functionality. It's a real alternative, you're not just going for second best – it's a different choice you are making."

Describing Google's "Trojan Horse" approach with its Android operating system as "incredibly successful", he said: "Every manufacturer is taking it on board and turning it into their own unique smartphone experience.

"Samsung have been able to flood the market with a swathe of phones at different price points, different specifications with manufacturers able to adopt it and adapt it and create all sorts of devices.

"Android has a multiple of uses and it's definitely enabling manufacturers to lower their costs and deliver decent devices and functionality at previously unheard of prices."

Android devices have seen a surge in smartphone shipments worldwide, while Apple's share of worldwide smartphone shipments has fallen and the California-based technology giant has so far declined to comment on reports that it has reduced its orders for parts for the newest iPhone in the wake of flagging sales.

Samsung rolled out the first Galaxy S model at the end of May 2010, scrambling to catch up with Apple, but yesterday the South Korean firm said it has sold more than 25 million Galaxy S smartphones, 40 million Galaxy S II smartphones and 41 million Galaxy S III smartphones in the last three years.

Fred Huet, managing director at telecoms specialist Greenwich Consulting, said people may be turning away from Apple, but manufacturers could also be wary of relying solely on Android as it becomes bigger and bigger.

"Because Android is going with many more handset manufacturers, obviously the level of innovation that all these different manufacturers, and the R&D money they can put in, is much bigger," he said. "The speed of innovation of Samsung, to name one, has managed to catch up with Apple.

"Everyone will say if you look at the device technology and sophistication on the hardware side, although they have a different look and feel, the underlying technology is on a par. I think people are looking at Apple thinking, 'is Apple now championing the consumer benefits and consumer interests?'."

Citing the debacle over Apple Maps, and a new style power plug for the latest models which is incompatible with previous Apple devices, Huet added: "Consumers think, 'OK, is Apple championing my interests or is Apple trying to maximise their profits?'."

He said it was hard to know what the outcome would be, and while customers have turned to Android, manufacturers may be concerned about "putting all their eggs in one basket", relying on Android, and could start to look at other developing operating systems.

Of what the future holds for both Apple and Android, he added: "It is hard to know what the outcome will be."

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