Samsung Outstrips Apple in Smartphones

CUPERTINO, Calif. ( TheStreet) -- Samsung has overtaken Apple ( AAPL) to become the world's number one smartphone vendor, according to the latest research from Strategy Analytics.

Samsung, which has become the standard bearer for phones built on Google's ( GOOG) Android operating system, shipped 27.8 million smartphones in the third quarter, up from 7.5 million in the same period last year. Apple shipped 17.1 million smartphones during the third quarter, compared to 14.1 million smartphones in the prior year's period.

The numbers highlight the intense competition between the two gadget giants, who are currently locked in a fierce global patent battle.

Strategy Analytics notes that Samsung is now the world's largest smartphone vendor by volume, with 24% share of the market.

"Samsung's rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution," explained Alex Spektor, senior analyst at Strategy Analytics, in a statement. "Samsung has demonstrated that it is possible, at least in the short term to differentiate and grow by using the Android ecosystem."

Whereas Apple eschewed its traditional summer iPhone announcement in favor of an October launch for the iPhone 4S, Samsung has been busily pushing new phones onto the market all year.

Last week, for example, Samsung and Google unveiled the Galaxy Nexus, the first smartphone running Android 4.0, also known as Ice Cream Sandwich, the latest version of the mobile OS. This came hot on the heels of the Stratosphere, a 4G LTE device recently announced with Verizon ( VZ). During the summer, Samsung also unveiled the Galaxy S II, which it touts as the world's thinnest 4G smartphone. Last month Samsung said that it had sold 10 million Galaxy S IIs via its channel partners.

Samsung, which reported its third-quarter results on Friday, recorded record profit of 2.52 trillion Won ($2.26 billion) in its telecom business, helping offset an overall dip in the chipmaker's profits.

Apple, in contrast, sold just 17.07 million iPhones during its recent fiscal fourth quarter, well below analysts' projections as customers awaited the arrival of the iPhone 4S.

"Apple's global smartphone growth rate slowed to just 21% annually in the third quarter of 2011, its lowest level for two years," explained Neil Mawston, director at Strategy Analytics, in a statement. "We believe Apple's growth during the third quarter was affected by consumers and operators awaiting the launch of the new iPhone 4S in the fourth quarter, volatile economic conditions in several key countries, and tougher competition from Samsung's popular Galaxy SII."

The Cupertino, Calif.-based firm, however, should deliver massive iPhone numbers during its fiscal first quarter. Demand for the new iPhone 4S has already broken records, something which is reflected in the tech giant's robust guidance.

Shares of Apple, which has not yet responded to TheStreet's request for comment on this story, were up 8 cents, or 0.02%, at $404.77 on Friday.

-- Written by James Rogers in New York.

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