The popularity of low-cost Android handsets in the smartphone market helped Samsung further increase its lead over Apple as the world's largest purchaser of semiconductors.
Samsung remained the number one buyer of semiconductors for the second year running, spending more than $30.3bn, an increase of 20.7 percent on the previous year, according to figures from analyst house Gartner. In comparison Apple spent $23.4bn on semiconductors during the same period, an increase of 11.8 percent on the previous year. Together Samsung and Apple increased their combined semiconductor demand by 17 percent.
Apple's smartphone market share was eroded in the first three quarters of 2013 by handsets from Samsung and emerging Chinese smartphone vendors, according to Masatsune Yamaji, principal research analyst at Gartner, author of the report into semiconductor sales.
"It [Apple] rallied with new models in late 3Q13 — the iPhone 5S and iPhone 5C. The iPhone 5C is the first model with which Apple has tried to gain market share in the affordable-price market, but it is still struggling in this segment," he wrote in the report.
Android handsets accounted for more than 80 percent of the smartphones shipped in the third quarter of 2013, according to research firm Strategy Analytics. During the same period Apple saw its market share drop from 15.6 percent to 13.4 percent.
Samsung is selling large volumes of Android handsets into the low-end smartphone market, focusing on sub-$400 phones – such as the Galaxy Ace, Duos and Neo - according to Gartner research director Roberta Cozza.
"Samsung, of late, has been a lot more aggressive in the lower end, which is where we believe that volumes will really come from, because the very high end of the market is slowing down as it's a saturated and mature market," she said.
"It's what is helping them to drive volumes but at the expense of profitability, as we've seen from their latest earnings."
Samsung said earlier this month that it expects to record an operating profit of 8.3 trillion won ($7.8 billion) for the fourth quarter of 2013, an 18 percent drop from the previous quarter's record earnings.
Cozza also warned that Samsung faces a challenge in holding onto its fast-growing user base.
"The vendor that can ultimately be the winner is the vendor that will deliver the best experience to their users. Apple is doing this with their ecosystem, while Samsung is challenged in providing that.
"In order to build loyalty across their devices Samsung will need to do something more, which I think will have to come from the software and services side, probably from acquisitions, which I think it's time for them to look into," she said.
In the fourth quarter of 2013 Apple posted a quarterly net profit of $7.5bn, having sold 33.8 million iPhones, compared to 26.9 million during the same quarter the previous year. Apple also sold 14.1 million iPads during the quarter, compared to 14 million during the same quarter in 2012.
"In 2013, total semiconductor demand from the smartphone and media tablet markets surpassed demand in the PC market," said Gartner's Yamaji.
"However, this consumer shift has caused a substantial decrease in total semiconductor demand over the last two years because there is far less semiconductor content in a smartphone and a media tablet than there is in a PC."
Not everyone agrees with Gartner that Samsung was the company that purchased the most chips last year.
Technology consultancy IHS released figures today that showed Apple as the world's largest buyer of semiconductors.
According to IHS, "Apple was in first place with chip spending in 2013 of $30.3bn, outspending runner-up Samsung's $22.2bn by more than $8bn".
IHS uses a different dataset to Gartner to calculate semiconductor spending, the served available market (SAM). The SAM counts only expenditures that an OEM made as an external agent and does not factor in spending by manufacturers for chip buying done at their own internal divisions.
According to Gartner eight of the top 10 semiconductor buyers for 2012 remained in the top 10 in 2013, with eight of the top 10 also increasing their semiconductor demand in 2013. Lenovo climbed to number four in 2013 due to its market share growth in the PC market, as well as the great success in the Chinese smartphone market.
Chinese IT giant Huawei made the top 10 buyers list for the first time this year.
Gartner said that Chinese electronic equipment manufacturers will continue to increase their semiconductor demand with their growth, driven not just by demand from their domestic markets, but also by strong demand from other emerging markets, such as Latin America and Africa.
The top 10 companies bought $114bn of semiconductors, which accounted for 36 percent of semiconductor vendors' worldwide revenue in 2013. This was up from $105.1bn, accounting for 35 per cent, in 2012.