Manufacturers shipped 216.2 million smartphones worldwide in Q1, 2013, compared with 189 million regular cellphones, according to IDC. IDC Q1, 2013 numbers compare facorably to 402.4 million units in the Q1,2012 (YoY) and down from 483.2 million units in the Q4, 2012.Smartphones thus made up 51.6 percent of the 418.6 million mobile phones shipped. The shift to a global majority of smartphones is now being driven by consumers in developing countries such as China, India and Indonesia.
Samsung retains the smartphone crown taking 32.7% of the market shipping out 70.7 million smartphones – thus becoming the defacto Android standard. Samsung’s up 61% over a year earlier.Apple slipped in its numbers to close Q1, 2013 at 17.3% of the smartphone market share with 37.4 mln units. Apple’s market share market share fell to 17% from 23% a year earlier. Samsung’s dominance of the smartphone markets is so superior that it ships more smartphones than its next 4 competitors put together.
Total Mobile phone shipments increased 4% YoY driven solely by 41% increase in smartphones compensating 19% drop in dumbphones.
Most of 2012 is behind us and it is still an Android – Apple duopoly on Smartphones and tablets. While Android devices and the iPhone make up an overwhelming majority of all smartphones being sold (85% as Gartner Q3, 2012), Windows Phone is still to get the traction it hoped for (although it registered a 1.5X growth over Q2, 2012).
In the mean time, Samsung and Apple dominate the smartphone landscape sharing between themselves 104% of the total mobile phone industry profits generated. iPhone cornered 63% of Mobile phone profits, Samsung made away with 40%. The only other OEM who has been in the black is HTC @ 1% of the mobile phone profits. Phone brands other than Samsung and iPhone have seen a reduction in market value of a combined 64 per cent (Q3, 2012 versus Q3, 2011).Over the last year (YoY Q3,2012 versus Q3, 2011), Samsung profits from Mobile operations jumped 231% while Apple increased 163%.
The good news is that the industry has had net value creation–always a healthy sign that innovation is being valued and absorbed and there could be an outside chance for a third payer (possibly Microsoft) some chance at gate crashing into the industry profits. However, with most of the profits getting banked only at Samsung or Apple, there is very little room for other OEMs (i.e Nokia & RIM) to spend lavishly on devices and services.
On the good many others who are completely sidelines (the list includes Motorola, Nokia, Sony (Ericssson), LG, Blackberry) – the decline is monumental. They all saw Apple coming a mile off. The media had been speculating for several years on when iPod would become iPhone. Yet they sat on their hands, too busy creating monopolies of their own to see where the world was headed. And in doing too many things for too many segments across too many geographies on a varied range of price points – they never built a roadmap to what could be the future of mobile computing.
Interestingly enough, almost all the value from the Android ecosystem is concentrated in Samsung. From the mobile operators’ point of view this emerging duopoly must be deeply worrying. Having been forced to bend to Apple’s will, they were very happy to see the emergence of Android, with its promise of a multitude of manufacturers competing for their attention. Now it looks as though Samsung is in position to
call all the shots in the Android market
Going forward in Q4, 2012, the only thing that can be expected in this equation is Apple regaining ground basis the holiday season bookings of iPhone5 which has generated much of a hysteria around the world
One of my earlier post deals with the e-commerce industry in India at this point of time. This series of posts will examine the rise of India’s digital consumer.
There are 124 million Internet users in India today, a growth of 41% Y-o-Y, out of which, 20 million users are through smartphones and tablet computers. Acccording to eBay, this number is expected to grow 100% over the next one year with the number of such devices growing everyday. comScore also reports India to be the fastest growing online market amongst the BRIC countries and India’s explosive online growth story will continue because, most online categories in India currently show below average penetration compared to global averages. With 124 million internet users, India is at a 10% level internet penetration. In correspondence to the rapid growth of Internet in India, Forrester estimates eCommerce revenue in India to increase from $1.6 billion in 2012 to $8.8 billion by 2016 accelerated by the increasing penetration of internet on mobile and social media.
Now heres the dope- for a country which is supposed to be technology phobic or plainly donot have access to technology because of the economics, Over 94% of the evolved internet shoppers surf internet, 87% of the users compare product prices online and 68% of them have made online purchase using their smartphones and mobile devices.
As Internet penetration and the smartphones and tablets price accessibility increases – this will lead to increase in mobile commerce (mCommerce) volumes in India. Online purchasing through
mobile phones is catching up fast in non-urban and rural areas and the ratio between rural and urban buyers would be 1:10 right now but it may go up to 6:10 over next two years. Consumer Internet shopping habit is now forming quickly with most of these users using their mobiles as a window to transact ‘anytime and anywhere’.
To be continued.
My last blog on Nokia had appeared 3 months back. That was around Nokia WP7 tie-up. Nokia has been having a continually downward spiral and generally unexciting products over the last 4 years now. To me the last of Nokia’s giant products was really the Nokia N-95. After that, Nokia slipped into a catch up game trying to match Blackberry, Android and Apple innovations.
A precipitate of Nokia’s slow, steady decline is now that Nokia is loosing market dominance in the very markets where it was unbeatable till a few quarters back. For instance, in Western Europe which was Nokia’s backyard, Q1,2011 saw Nokia being relegated to No.2 position in Mobile phones and in Smartphones. Samsung and Apple are the new leaders in mobiles and smartphone categories. While Nokia’s decline has been a long time coming, this sea change in its home market underscores just how much ground the company is losing in traditional areas of strength.
Nokia is one of the most recognized and appreciated brands in Europe, but Samsung was the one understanding the trends first and moving faster. Samsung understood early the trend on touchscreen devices and became the market leader on feature-phones by providing a full range of devices at very competitive prices. On smartphones, Samsung has quickly moved to Android as well as investing in its own platform, Bada. Flexibility and being able to address all market segments have contributed to Samsung’s ability to quickly adjust to the market trends.
Apple, on the other hand, coming from nowhere in the mobile phone business, capitalized on its strong brand and user-experience innovation. It took years for competitors to come up with devices that could challenge consumers’ preference for the iPhone. And now, iPhone has caught the fancy of all and is galloping up in volumes. Like Western Europe, Apple is mounting the pressure on Nokia volumes globally as well. There were 5 million units that separated Apple from Nokia in the Q1,2011 Smartphone shipments. While Nokia tries staying afloat with rehashed Symbian and Annas, Apple’s juggernaut has been more definitive in terms of its upswings.
Stephen Elop’s illustrations on “How to put Symbian to sleep?”
It has become increasingly hard to see how the once-mighty Nokia can ever regain its formidable status. For a company that once dominated the handset market, its first-quarter results and the planned cuts in operating expenses seem to condemn the company to a slow decline over the next two to three years into a faint shadow of its former glory.The company has failed on so many fronts that only its low-end products are seemingly saving it from complete annihilation.
What happened to cause such a hugely successful company to fail will be analysed by many aspiring business graduates and industry experts alike. But there is no simple answer to this debacle.
The next few quarters are going to be very dicey for Nokia. The Nokia-WP7 alliance would be rolling in 2012 onwards and Symbian’s slow death is a planned inevitability (see Elop’s presentation themes on Symbian phase out). Having said that Elop wants to sell another 150 million Symbian Smartphones. The question that begs an answer here is if Symbian is the proverbial burning deck, then why would a user buy it in the first place. That puts into question, will Elop make 150 million Symbian studded Nokia Smartphones sell? The statistic and the argument don’t feel compelling enough. Nokia could be relegated to 10% of the smartphone market shares before WP7 is launched. That could be a disaster situation for Nokia but that is what stares beleaguered Nokia at its face.
With its share price at a 13-year low, it’s perhaps difficult to imagine if Nokia can sink any lower in terms of its worth.
The latest to cast doubt on the company’s hopes has been the ratings agency Moody, which last week downgraded Nokia’s credit rating from A2 to A3. This followed a similar move by Standard & Poor’s a week earlier.The analyst viewpoints driving this demotion have revolved around the probability of Nokia regaining its dominant market position, given the threats and uncertainty that surround its partnership with Microsoft for the Windows Phone 7 (WP7) platform. Adding salt to Nokia’s open wounds was the reports that the Taiwanese smartphone vendor HTC, Asia’s second-largest smartphone developer, had surpassed Nokia in market capitalization. On balance, HTC’s sudden rise could be attributed to the huge demand for smartphones running on Google’s Android platform, albeit that HTC’s handsets are recognised for being among the best today.
In the pre-read to this post, i had written about how Internet, the way we know it is fast coming to a saturation and how mobiles will fuel the next growth engine for Internet. Most of the terms and facts used were the clichéd variety.
Internet on Mobile will be different than internet on Computers. There are a few paradigm shifts and i would provide these for the reader’s consideration:
1. Internet is mostly a Pull medium as against a Push medium. For instance, a user gets to know about a particular Facebook update only when he logs into Facebook.
An App changes that. It pushes the Facebook Update on the device and is thus more immediate and relevant than delivery through the Internet.
2. Internet is static medium (low on mobility experiences). Even if a user uses a laptop, the device is incapable of “external intelligence” i.e Time, Location, Context, User Experience. Thus it would only be a communications device than a experience device for the user.
An App with its various APIs is more intelligent to “external” than the internet delivered as a static medium. There are many software engines and APIs which could make the content delivery contemporary to the context of the user. A simple example here is an LBS service or a NFC led discovery. Thus the App adds the dimension of “experience” to the user context.
3. Apps with their ability to wrap around the user context, experience, intelligence thus becomes a far more effective medium for monetizing services. The App thus takes up the role of a media to deliver sponsored messages to the user.
Imagine planning your holiday with Thomas Cook App, which not only includes tickets and stay, but also a mobile based tour guide app which takes you to “your” kind of places, basis the system intelligence of your preferences. Imagine a advertising eco-system that can be built out a local context through this medium.
4. Applications could be delivered through any and many screens: TV, Computer, Mobile and even in cars. One application could travel with the user across his usage dynamically to address him on TV when he is watching a game, on mobile or car when he is travelling , on computer when he is in office.
5. Last but not the least is Apps ability to drive Mobile health, Mobile banking, mobile education solutions across a diverse geography. There’s enough thats being done in the area of basic amenities and utilities to deliver life services to billions through mobile phones and apps.
Thus, apps would alter the way internet is delivered to the next lot of internet users in the world. The medium would be highly customized, very mobile, very user context and experience specific. Best of all things, it could provide unique monetization opportunities to a very diverse eco-system.
The Gartner release on Mobile Phone shipments for Quarter 3, 2010 puts Worldwide mobile phone sales to end users at 417 million units, a 35% growth over 308 million units in Q3,2009. Smartphone sales grew 96% YoY from 41 million units in Q3, 2009 to 80 million units in Q3,2010. Contribution of Smartphone sales to overall sales of smartphones increased from 13% in Q3, 2009 to 19.3% in Q3,2010. Smartphone sales have driven the total mobile phone numbers which otherwise have registered 25% growth YoY.
Nokia dropped 8.5% market share to end at 28.2% market share. Another interesting trend observed is the fragmentation of the market by the “Others” category chiefly comprising of white-box manufacturers who have continued to expand their reach outside of China into markets such as India, Russia, Africa and Latin America. These feature rich value for money handsets now form 33% of the total mobile handset sales i.e 1/3rd of the handsets sold globally are white box labels. This in part has been instrumental in taking the wind out of the sales of Nokia, Samsung and LG, the top 3 vendors each of whom have dropped market shares. The Other category grew 16% market share where as the top 3 lost 14.6% market share. Furthermore these numbers are expected to rise further with accelerating growth of the white box handset category.
While Nokia reported better financial figures basis better ASPs (in absence of low end products, which were supply crunched) and favorable currency exchange rates, it is doubtful if Nokia would be able to claw back in terms of market share. The Nokia Dual SIM handsets would certainly get additional sales, but it is difficult for Nokia to come back to 36% in view of steady growth of the white-labeled handset makers.
Samsung had a strong third quarter, as mobile phone sales reached 71.7 million handsets in the third quarter of 2010, up 18.2 percent from the third quarter of 2009. Samsung’s smartphone market share reached 10 percent in the third quarter of 2010. Samsung sold close to 1 million bada devices in the third quarter of 2010, and 6.6 million Android phones, making Samsung the top Android seller.
LG sold 27.5 million mobile devices in the third quarter of 2010, as its global market share dropped to 6.6 percent. LG’s strengths in stylish midtier devices are becoming less relevant in mature markets that are moving increasingly toward smartphones, and this is translating directly into market share. LG lacks a flagship smartphone; its devices tend to be affordable midtier devices that lack hardware or software innovation, priced at the low end of communication service provider
Apple really has gone from strength to strength and inspite of the Antennagate Fiasco, iPhone sales grew 91%. This was good from the Mobile phone perspective, but it was not able keep pace with the 96% growth in smartphone markets.While Apple remains focused on consumers, enterprise adoption of the iPhone and iPad has grown and will continue powering iPhone sales into 2011. With 48% of the smartphone profits, Apple isnt in a any eagerness for volumes.
RIM sales have registered a 40% growth which again pales considerably against a 96% growth in smartphones mostly powered by Androids. Blackberry has been under some pressure in the recent times and a lot depends on the Torch and the Playbook Tablet. The numbers currently donot augur a recovery for Blackberry.
Android grew at the cost of every other Mobile Phone OS in the smartphone markets. Androids grew at a whooping 1340% YOY. Even though Nokia sold more smartphones, but it pales compared to Android. Every third smartphone in the world is Symbian and every fourth smartphone in the world is a Android powered device. However, Symbian’s future is a little unclear with the exit of foundation members Samsung and Sony Ericsson. (Read more about Symbian here) This leaves even less hope for the beleaguered Symbian to hold on to its leadership which has been so severely challenged by Android.
An important event last quarter was the return of the Windows Mobile with its 7.0 version. While there are minor glitches to the OS, it is still a huge improvement over its predecessors and may herald the coming back of WinMO. (Read more here)
For the whole year 2010, Gartner expects overall device sales to show a 30% YoY increase. The impact of media tablets on mobile device sales will be tested in 2011. Gartner forecasts that media tablets (such as the Apple iPad) will reach 54.8 million units in 2011.
The Gartner Global mobile phone market share data for Q1, 2010 was released a day back and according to Gartner, Global mobile phone sales to end users totalled 314.7 million units in the first quarter of 2010, a 17 per cent increase from the same period in 2009. Smarpthone sales to end users reached 54.3 million units, an increase of 48.7 per cent from the first quarter of 2009. Among the most successful vendors were those that controlled an integrated set of operating system (OS), hardware and services. (Read that as Apple who have registered a 112% growth YOY)
Q1’10 saw RIM, a pure smartphone player, make its debut in the top five mobile devices manufacturers, and saw Apple increase its market share by 1.2 percentage points. Android’s momentum continued into the first quarter of 2010, particularly in North America, where sales of Android-based phones increased 707 per cent year-on-year.
Growth in the mobile devices market was driven by double-digit growth of smartphone sales in mature markets, helped by wider product availability as well as mass market price tags. Increasing sales of white-box products in some emerging regions, in particular India, also drove sales of mobile phones upward. We expect sales of white-box products to remain very healthy for the remainder of 2010, especially outside of China.
The rise of white-box manufacturers from Asia has also helped the “others” section, as a proportion of overall sales, increase its market share to 19.20 per cent in the first quarter of 2010, up 2.7 percentage points. This is having a profound effect on the top five mobile handset manufacturers’ combined share that dropped from 73.3 in the first quarter of 2009 to 70.7 per cent in the first quarter of 2010.
In the smartphone OS market, Android and Apple were the winners in the first quarter of 2010.Android moved to the No. 4 position displacing Microsoft Windows Mobile for the first time. Both Android and Apple were the only two OSs vendors among the top five to increase market share year-on-year. Symbian remained in the No. 1 position but continued to lose as Nokia remains weak in the high-end portfolio.As seen with the iPad and web books based on Google’s Android platform, mobile OS ecosystems are developing and will move beyond smartphones to continue to deliver consumer value and a rich user experience.
Mobile e-mail, rich messaging and social networking will continue to drive demand for smartphones and enhanced phones that feature full qwerty hardware keyboards.To compete in such a crowded market, manufacturers need to tightly integrate hardware, user interface, and cloud and social networking services if their solutions are to appeal to users. Just adding a qwerty keyboard will not make a device fit the communication’s habits of today’s various consumer segments.
Dual SIMs entered the Indian Markets with stealth and are often connoted with inferior quality Chinese White branded handsets. However, the response to Dual SIMs and Multiple SIM handsets from the Indian markets has been phenomenal. The markets have almost move to the tune of 25% per month of the total handset sales from dual/multiple SIM handsets.
This inspite of the fact that it didnot have active support from the big 5: Nokia, Samsung, LG, Sony Ericsson and Motorola. Dual SIMs handsets have powered low cost players like Spice, Micromax, Karbonn to 20% market share levels. So much so that the organized players such as Samsung, LG and Nokia are also jumping into the dual SIM bandwagon. Here’s a media release that i had given on the scope, market, consumer preferences and cons of the multiple SIM handsets.
The scope of multiple-SIM phones in the Indian market
A large percentage of mobile users have a tendency to maintain two to three connections and therein arises the need to accommodate this requirement through multiple SIM phones. This is actually a reflection of the fact that markets in India are maturing even while 15-20 million subscribers are added every month. Multiple SIM phones are mainstream in Europe, Russia, Thailand and other mature markets. Indian Users are slowly waking upto the trend of multiple SIM cards. Consumers today want to keep their work connection separate from their home connections. Yet others like to toggle between two operators one with cheaper VAS/SMS and the other with a cheap talk plan. There are still others working across geographies who maintain multiple connections: One from the Home network and the other from the other geography network. Another new category of consumers prefer to maintain a GSM and a CDMA connection and there-in lies the utility of GSM-CDMA phone.
Do such phones hold promise in rural segment
While Multi SIM phones are globally a feature of mature markets, the spread in India covers rural segment also. This is because cheap SIM and talk times allow people to maintain multiple connections. The cost differential between a Multi-SIM phone and a Mono SIM phone is lesser than the perceived benefits and utility of owning a Multiple SIM Phone. Hence there is a market which exists in this segment as well.
The growth of Dual SIM phone segment in India
Market analysts say that, in India 50 million people have multiple SIM handsets and the numbers are increasing by 2-3 million users every month. That is 20-25% of the total market and is substantial.
Will the success of Dual SIMS be replicated in the Triple SIM segment?
Any new segment must have a valid consumer proposition for it to make business sense.
In India, Dual SIM phones are more widely accepted for the reasons mentioned earlier. A Triple SIM phone has a niche market in business usage (Order Booking, Handling multiple partners, small retailers and SMEs). Thus in terms of numbers, a dual SIM phone will have more acceptance, though a triple SIM phone will make sense for its kind of users.
The value addition of triple SIM phones to the consumer
Lets sample a few types of consumers of the Triple SIM phone:
A restaurateur who has a delivery service; a travel agent who has multiple phone connections; businessmen who need to manage customers, vendors and personal contacts and People who travel a lot who need to maintain low cost Talk options in two or more geographies and a data/VAS connection. The Triple SIM is a solution where-ever there is a need to work and manage more than 2 kinds of user groups. As stated earlier, this market is niche but a triple SIM phone has a direct relevance to these users.
Will we see SIM support number rising further to 4 or 5 in the coming days?
Dual SIM has mass connotations, Triple SIM has a niche; however, 4 or 5 SIM phones would be an overkill. There is very limited consumer proposition for more than 3 SIMs and hence we do not see a relevance to any consumer category for 4 or 5 SIM phones. Besides on the technology part, a 4/5 SIM Phone will lack stability, cause battery drainages, Overheating and burn outs.
Disadvantages of multiple SIM phones?
As discussed earlier, we can only put 2 PCBs on a phone. Using more than 2 may cause phone instability, battery drainages, Overheating and other technical issues. 2 PCBs support Dual SIM the best, Triple SIM optimally. Hence going beyond 3 SIMs is technically not preferred.
We want to have a little bit of Google in everybody’s transaction with the Internet
ERIC SCHMIDT, CEO, GOOGLE
Speaking at the Mobile World Congress (MWC), Google Inc Chief Executive Eric Schmidt urged the mobile industry not to block opportunities offered by the mobile Web and said Google and telecoms carriers could have a symbiotic relationship. Google has raised hackles in the industry by launching a smartphone platform — Android — selling its own-branded phone directly to consumers without the mediation of carriers, and announcing plans to build a super-fast broadband network. It has also been seen as a problem by some operators, which are having to invest and upgrade their networks to meet the huge demand for data services required by users spending time on the mobile Internet and sites from search leader Google and others. Eric urged that the surge in data services had to be viewed more constructively in terms of revenue opportunities.
Given Google’s increased focus on smartphone-data services it is not unusual that “Mobile First” is being put as primary focus of the company. The latest acquisition in that space, AdMob, is a result of this new strategy. The signs are there, smartphone sales are growing at a 30% year-over-year rate, which will eventually surpass the personal computer sales.Even more important, the adoption of the Mobile Web is growing annually eight times faster than the Web adoption did a decade ago. In countries like Indonesia and South Africa more searches are done via the mobile Web than via the desktop, it simply cannot be ignored.
Three areas are coming together on the mobile device, namely the Cloud, computing power and interconnectivity. All these three areas converge in the mobile device, making it a most powerful device where strategies need to be developed in order to thrive or at least, survive.
Check this Slideshare Presentation which is a simple, easy and interesting note on Google’s Mobile Strategy.
While 47% of India is “mobile”, a study of Internet Users in India released by JuxtConsult has put the internet penetration of India to be 4.2%. The bad news is that this number has actually declined versus 2008, the good news is that within the regular users, Internet is fast becoming a Habit. Refer to the pressentation for more interesting details.