1. 1 billion smartphones per year! Latest smartphone numbers from Gartner round Smartphones at 250M a quarter. As low end smartphones penetrate the feature phone price points, Smartphones are beginning to look past the 1 billion mark.
2. With 82% market share Android is unrivalled emperor of the smartphone kingdom feebly contested by Apple iOS. Google’s conquest of the internet space at least on mobiles is near complete even while problem around gray Androids and Platform fragmentation remain.
3. Samsung remains the No.1 in smartphone device space – the fabled fifth horseman of the technology space – but this is more due to the momentum effect than anything really outstanding.
4. As the china smartphone markets swell, there will be more of Lenovos, Huaweis, ZTEs, Alcatels and Coolpads who would enter in the top 10 and start eating into Samsung’s 32%.
5. By the same logic – with the growing Indian smartphone volumes, i am hopeful of Micromax breaking into top 10 in a quarter or two – if it hasn’t already.
5. Android, Microsoft and Apple – are the last men standing as Blackberry, Bada, Symbian and all others fade out from the three horse OS race
6. Would Nokia break back into top 5 with its Lumia range? We would watch this.
Worldwide sales of mobile phones to end users reached 419.1 million units in the first quarter of 2012, a 2 per cent decline from the first quarter of 2011, according to Gartner, Inc. This is the first time since the second quarter of 2009 that the market exhibited a decline. The slow down in the first quarter was attributed to a low demand in Asia Pacific in view of generally less exciting product launches.
Samsung became the world’s top mobile handset vendor during the quarter, displacing Nokia which had held the No. 1 spot since 1998. Samsung took back the world’s No. 1 smartphone position from Apple, selling 38 million smartphones worldwide. In addition, Samsung’s Android-based smartphone sales in the first quarter of 2012 represented more than 40 percent of Android-based smartphone sales worldwide; no other vendors achieved more than a 10 percent share of the market.
Sales of smartphones continued to drive mobile device market growth, reaching 144.4 million units in the first quarter of 2012, up 44.7 percent year-over-year. This quarter also saw the top two smartphone vendors, Apple and Samsung, raising their combined share to 49.3 percent, up from 29.3 percent in the first quarter of 2011, and widening their lead over Nokia – which saw its smartphone market share drop to 9.2 percent. Nokia’s mobile handset sales reached 83.2 million units, a 22.7 percent decrease from the first quarter of 2011.
Android accounted for more than half of all smartphone sales (56.1 percent) in the first quarter of 2012. A very strong commoditization trend is setting in on the smartphone segment especially the ones based on Android OS. At the high end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid to low-end segment, price is increasingly becoming the sole differentiator. This will only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability and scattered market share
The mobile phone market shares over the last 13 quarters are plotted above. Interestingly, even while the market has grown in the last 13 quarters by 55% from 269.1 mln units in Q1 2009 to the present volumes, what explains Nokia’s loss in not an other incumbent but the rise of the “Others” category. One would associate Micromax, Karbonn, Spice, Lava and other local white labelled brands in this space. The irony is back in 2008, when Nokia was at its zenith, this threat was widely rubished by most of the high ups in Nokia as a passing fad.
Worldwide smartphone sales to end users soared to 149 million units in the fourth quarter of 2011, a 47.3 per cent increase from the fourth quarter of 2010. Total smartphone sales in 2011 reached 472 million units and accounted for 31 percent of all mobile devices sales, up 58 percent from 2010.
Apple became the third-largest mobile phone vendor in the world, overtaking LG and the world’s top smartphone vendor, with a market share of 23.8 percent in the fourth quarter of 2011, and the top smartphone vendor for 2011 as a whole, with a 19 percent market share.
LG, Sony Ericsson, Motorola and Research In Motion (RIM) again recorded disappointing results as they struggled to improve volumes and profits significantly. These vendors were also exposed to a much stronger threat from the midrange and low end of the smartphone market as ZTE and Huawei continued to gain share during the quarter.
Worldwide mobile device sales to end users totaled 476.5 million units in the fourth quarter of 2011, a 5.4 percent increase from the same period in 2010. In 2011 as a whole, end users bought 1.8 billion units, an 11.1 percent increase from 2010.
• The global mobile handset market gained 5.6 percent in the third quarter to 440.5 million phones. It slowed from 35% growth reported a year earlier and 16.5% in the previous quarter. The slowdown in Western Europe has been compensated by stronger growth in emerging markets such as China.
• Nokia retained the top spot with a 23.9 percent market share, climbing from 22.8 percent in the second quarter, down from 28.2% year on year. Samsung, LG Electronics Inc., Apple, and ZTE Corp. rounded out the top five vendors.
• Smartphone sales by volume grew 42 percent. Smartphones gained one percentage point from the previous quarter to 26 percent of all mobile-phone sales. Smartphone sales to end users reaching 115 million in the quarter
• Google Android accounted for 52.5 percent of smartphone sales, more than doubling its share from a year earlier. This is up from the 20.5 million Android-powered smartphones sold in the third quarter of 2011, when Android accounted for a 25.3 percent market share.Android benefited from more mass-market offerings, a weaker competitive environment, and the lack of exciting new products on alternative operating systems. Android was estimated to sell 60.5 million units in the third quarter of 2011
• Samsung, maker of the Galaxy line of Android smartphones, became the biggest smartphone maker for the first time. Samsung sold a total of 24 million smartphones in the third quarter compared with Nokia’s 19.5 million. Symbian handsets lost almost 20 percentage points from a year earlier (36.3% last year) to account for 16.9 percent of smartphones as the company shifted to Microsoft Corp. Nokia accounted for 22.1% smartphone sales in the quarter that ended June.
• Research in Motion Ltd. (RIM) declined 4.4 percentage points from a year earlier to 11 percent of the smartphone market in the quarter.
• Apple was the world’s fourth-largest handset vendor, while its iOS operating system was the third-largest smartphone operating system with a 15% market share, down from 16.6% a year earlier. With a limited number of iPhone models taking on a plethora of Android-powered handsets from multiple manufacturers, Apple’s iOS actually lost market share in the worldwide smartphone market last quarter despite growing sales
• ZTE Corp.’s smartphone market share increased to 3.2% from 1.9% in the same quarter a year ago, while Research In Motion Ltd.’s (RIMM) share declined to 2.9% from 3.0%.
Analysts predicted that sometime around the first week of July, the Mobile phone population of the world touched 5 billion devices mark.The global mobility is at 73%.However growth in the mobile phones devices markets continues unabated as Gartner recorded 16% Y-o-Y growth in number of mobile devices sold. However, look deeper and there are a few other interesting trends.Smartphones as a sub-category is powering growth in mobile phones. While smartphones have grown at 74% Y-o-Y as against 16% Y-o-Y growth registered by Mobile phones, Smartphones have also contributed 75% to the differential volume units in mobile devices sales.
Smartphone sales continued to rise at the expense of feature phones.Google and Apple are the obvious winners in the smartphone ecosystem. The combined share of iOS and Android in the smartphone operating system market doubled to nearly 62% in the second quarter of 2011, up from just over 31% in the corresponding period of 2010. The platforms’ popularity can be tied to their usability and apps
The mobile phone category is rapidly evolving and is actually moving away from brands. Sample this: While the today number of branded OEM units remained constant at 252 million, the entire growth in the mobile phone category was powered by Local brands and white label manufacturers such as ZTE and Huawei. Others, ZTE and Huawei grew 52% by unit volumes Y-o-Y. Nokia, Samsung, LG, Motorola, Sony-Ericsson, Blackberry-all the players who defined the market pre-2008 are loosing thier markets.
Consumers in mature markets are choosing entry-level and mid range Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions. Local ODMs are making decisive inroads into the markets basis a better value equation and prices on their handsets. Operators are also increasingly looking at the device bundle space to support value propositions to consumers. Mobile phones category is one where value-for-money is winning over the brands proposition. Do we term this as commoditization? In some sense, yes!
Canalys has stated the obvious in terms of smartphone platform market shares: Android rules and has captured 48% of the smartphone market in Q2 of 2011. Smartphone adoption continues to grow rapidly across the world, reaching a total of 107.7 million units shipped in Q2 of 2011, a 73% year-on-year growth.Android was the biggest driver of smartphone shipments in Q2, as Android-based smartphone shipments were up 379% year-over-year, coming in at 51.9 million total units shipped.Successful Android-based products from vendors such as Samsung, HTC, LG, Motorola, Sony Ericsson, ZTE and Huawei, as a catalyst for the platform’s growth. As written about earlier Apple has over-shot Apple and is the No.2 smartphone platform. Android’s growth has powered Samsung as the No.2 smartphone maker globally.
Android was the number one platform in 35 of the 56 countries Canalys tracks, resulting in a market share of 48 percent. Nokia’s leadership position has proved most resilient in key emerging markets, and it still leads in the BRIC countries: Brazil, Russia, India and China. The problem for Nokia is that demand for its Symbian-based smart phones has dissipated very rapidly, particularly in operator-led markets, such as Western Europe, where it’s been strong in the past. It badly needs the first of its Windows Phone devices to launch as soon as possible to arrest a decline and, hopefully, silence its critics.Even while Nokia-WP tie-up was announced in February, the first of these devices will be launched only towards end of 2011.Nokia is set to have several more difficult quarters before a possible reversal of fortunes.
RIM had a challenging quarter in North America, with its market share slipping to 12%, down from 33% a year ago. However, Blackberry continues to see significant interest and uptake of its devices, for example in Indonesia and South Africa where it is the leading smart phone vendor. Nonetheless, it must continue to innovative and recapture lost momentum. It’s critical that the next-generation BlackBerry OS 7-based products launch ahead of the upcoming holiday season to compete in the market.
The Q2,2011 mobile phone shipment volumes and the market share report by IDC has a few interesting take aways. The report estimates that worldwide mobile phone market grew 11.3% year over year in the second quarter of 2Q 2011, despite a weaker feature phone market, which declined for the first time since 3Q09. Vendors shipped 365.4 million units in 2Q11 compared to 328.4 million units in the second quarter of 2010. The 11.3% growth was lower than IDC’s forecast of 13.3% for the quarter and was also below the 16.8% growth in 1Q11.
However, the feature phone market shrank 4% in 2Q11 when compared to 2Q10. The decline in shipments was most prominent in economically mature regions, such as the United States, Japan, and Western Europe, as users rapidly transition to smartphones. This was the first decline since Q3 2009 and reflected a combination of conservative spending and continued shift to smartphones.
For the overall market to grow by double digits year over year, despite the decline in feature phones, is testament to the strength of the global smartphone market. While this is not a new trend – smartphones have been the primary engine of growth for the last several quarters. However, the 2Q 2011 timeline is an milestone, because it does mark something of a transition point, as demonstrated by the growing number and variety of smartphones featured in the vendors’ portfolios. One might as well add a subdued demand from Japan given the Earthquake and component shortages.
In the OEM space, the same story plays out with Nokia loosing close to 10% market share and with shipments falling 20% YOY. High channel inventories in China, competition from Samsung in mi end and Chinese white label manufacturers in low end and a free fall on the smartphone space have led to Nokia’s loss. The story rings the same for LG as well which lost 19% YOY and 3% market share points.
Samsung which has had an impressive run lately both in entry and mid level in Europe and Asia and has catapulted to No.2 slot on the global smartphones list has registered 10% growth which is a shade lower than the 11% market expansion.
Apple thrived in China thanks to strong iPhone 4 demand. If Apple was to release a low cost iPhone as rumored, it could make major inroads and overthrow LG from the no.3 spot. That is quite phenomenal considering that Apple did not sell phones till about 4 years back.
China-based vendors gained share in India, West Asia, Africa and Southeast Asia at the low end.
In Western Europe, the market declined sequentially compared to the first quarter. The feature phone market declined while smartphone shipment growth slowed as phone makers and carriers reduced inventories in advance of expected third-quarter product launches.
Civil unrest in West Asia, North Africa and other Arab countries, impacted sales negatively.
In North America, smartphones once again took center stage, propelled by lower prices, key device launches, and enhanced channel marketing. In particular, Android-based devices extended their lead in the United States and took leadership in Canada thanks to Samsung, Motorola, HTC, and LG. Meanwhile, demand for feature phones continued to slide, but there still existed pockets of interest for voice-centric and quick-messaging devices.
The Latin America market growth was driven by low-cost smartphones, specifically those with social networking features. Lower smartphone prices, including those of the Android variety, are driving smartphone penetration in several Latin American countries. Price is expected to be a point of differentiation – as well as applications and device features – between Android players in future.
Nokia stocks took the hammer today and haemorrhaged 17.5%, following a dramatic downgrade of its 2Q,2011 outlook. Nokia expects net sales from its Devices and Services division to be substantially below its previously expected range of 6.1 billion euros to 6.6 billion euros ($8.77 billion to to $9.48 billion) it previously expected. Nokia expected to earn somewhere between $530 and $850 million off its Devices and Services business this quarter, and now expects those figures to be “substantially lower”—right around a breakeven point. The second quarter results are expected by July 2011.
Nokia’s full market capitalization now stands at $25 billion, a figure that analysts say that Apple Inc. could earn in net profit alone during 2011.
Nokia in a statement has indicated that it could no longer give a full year forecast which effectively means that Nokia is pessimistic/unable to react to and contain losses that the phone major is beginning to see all around its business units. The lack of revenue assurance is a psychological set-back which manifested itself by a free-fall in share prices. Nokia was trading at 4.34 Euros, its lowest in the last 13 years. Bernstein Research downgraded Nokia from “market perform” to “underperform” on Wednesday, cutting its price target to 3.00 euros from 5.50, and Goldman Sachs removed its “buy” tag on Nokia, labling it only as “neutral”.
Nokia attributes the lowered forecast to three primary factors, including aggressive pricing from competitors, lower average prices and margins across its own product line, and “competitive dynamics and market trends,” particularly in China and Europe. However, the bottom line is that Nokia isn’t selling as many phones as it would like. Check Gartner reports here.
The problem with Nokia is that they are losing market share at such a pace that there’s a risk that consumers won’t be interested in buying Nokia phones anymore. That could whiplash into inventory blockages globally which could further dent the channel confidence in Nokia. Nokia’s market share had fallen to 29 percent from 33 percent in the first quarter of 2010, and compared with 40 percent in the first half of 2008. The numbers are stark. In the first quarter, Google’s Android operating system ran on 34% of smartphones in Western Europe, up from only 8% a year ago. By comparison, the percentage of smartphones that ran Symbian fell by half to 21% in Europe from 40% a year ago.The influx of Android devices aimed at both the premium and mass markets has Nokia cornered.
Nokia states that sharp outlook downgrade was part of a rocky transition period as it phases out its Symbian smartphone platform in favour of a tie-in with Microsoft Phone, and hopes to regain lost ground when it starts shipping its first Microsoft handsets at the end of this year. While Nokia has been announcing launch of its Windows phones by 4Q,2011, there are unanswered questions about costs, eco-system and consumer acceptance. Then again, a 4Q,2011 launch would mean that Symbian led smartphones would continue bleeding in volumes as well as ASPs. In an initial estimate I had predicted that the next 3 quarters could see the Symbian-Nokia at 10% of the smartphone sales. Nokia already has transferred maintenance of the out moded Symbian platform to Accenture and laid of 7000 jobs thereby saving its $1billion this fiscal.
Nokia has started shipping dual SIM phones, a trend that it missed altogether in 2007-08 and has also announced the E7 shipping start. It is doubtful that these are going to alter the balance any more in favour of the beleaguered mobile giant.
Nokia’s crisis has been in the making for the last 3 years. There has hardly been a Nokia phone to write home about except the E70 in 2008. Each of its flagships failed post that as Nokia was stuck in its device and hardware focus and Android / iOS stole the march with swanky OSs and smartphones. Nokia misread the evolution of the smartphone category, touch and did not execute most of the elements in its service strategy well (Ovi??). Worse, the organization as such was a sloth and as the joke goes, Nokia was the proverbial oil tanker that took ages manoeuvring in any direction. For 3 years after the launch of the iPhone, the writing and the trend was on Nokia’s face but it did not react compounding the crisis. The Q2,2011 outlook downgrade is the proverbial tipping point and I expect small disasters ahead. We will wait to know if Elop’s Windows Phone association does anything to reverse the fortunes of the beleaguered giant.
Mobile phones device sales increased 19% Y-o-Y to total 427.8 million units in Q1,2011, On the same lines, Smartphone sales registered a 85% increase and accounted for 23.6% of overall mobile sales in 2011. Smartphones registered 100.8 million unit sales in 2011. Smartphone numbers have seen a depression due to the situation in Japan and the fact that buyers haven’t invested in smartphones in Q1,2011 anticipating stronger and bigger device releases in Q2,2011.
The smartphone numbers only re-inforce the familiar rise of Android to Ubiquitous status, the marginalization of Symbian in Smartphone OSs and pressure on Nokia to defend its leadership. Symbian lost 24% share in 9 quarters, whereas Android gained 35% of its market in the same 9 quarters propelling the likes of HTC to No.7 in Devices and lifting the ASPs for Motorola, Sony Ericsson and Motorola. Android currently is in the mode of moving into the $100 price feature phones to get into the mass mode.
Nokia’s move from Symbian to Windows was announced this February and there is a 1 year or more waiting time before the Nokia Windows Phone hits the shelves. In the meantime, consumers are expected to shy away from Symbian and thus in the ensuing quarters, Symbian market shares are expected to free fall further. By the time, the Windows tie-up kicks in for Nokia, Nokia could well be around 10% market share points and combined with Windows, it would claw back to 20% but never really challenge the dominance of the Android OS, eco-system and partners.
With presence across 90 countries from 186 CSPs, Apple has doubled its number of units sold Y-o-Y. It is unlikely that Apple will push past the 20% market share in Smartphones majorly, but the unique eco system of devices, applications, platforms and services would make it the most profitable mobile platform.
In the first quarter of 2011, RIM announced that it would transition its BlackBerry portfolio to the QNX platform in 2012. This should make its smartphones more competitive in graphics, performance and touch, and unify RIM’s tablet and smartphone user experience.
Windows devices launched at the end of 2010 failed to grow in consumer preference and CSPs continued to focus on Android. In the long term, Nokia’s support will accelerate Windows Phone’s momentum to double figures.