Despite the fact that iPhone has a clear lead in U.S. smartphone market, Toni Sacconaghi of Bernstein Research says that the iPhone’s market share is likely to decline if the company delays next generation iPhone release. Since the first iPhone came out in 2007, Apple has traditionally released an updated model every calendar year. In the quarter prior to launch of a new model customers buy the least number of iPhones, as everyone anticipates a new model to come out soon. Toni believes that iPhone market share may decline to 12% from the current 17% this quarter and it may continue to decline if a new smartphone isn’t released.

Apple’s rival Samsung has seen its market share grown substantially in Q1 2013, partly because it offers a host of Android powered smartphones as opposed to one single iPhone that Apple releases each year. This has led to widespread rumors that Apple is developing a low cost iPhone that will help regain some of the market share lost to Samsung. Rumor has it that Apple will release two iPhones this year, a low cost model followed by a moderately revamped iPhone 5S.

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