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.
Nokia is selling off. Blackberry is winding down. Too Many other Asian Smartphone Vendors are churning out of business- the seismic level activity in Smartphone Industry is beginning to take its toll
Blackberry’s white knights – Z10 and BB10 haven’t brought the moolah home. In the Q2 pre-released earnings call, Blackberry has said that it will take a $1 billion pre tax hit on the their bottomline. Much of this – about $950-$995 million is to do with unsold inventory of Z10 at Blackberry. Worse there is a 40% workforce cut on the cards. In Q2, Blackberry sold close a 5.7 million units to end customers. BlackBerry is now predicting total second-quarter revenue of about $1.6 billion, compared with Wall Street’s forecast for $3 billion. Interestingly enough the revenue from the BB10 devices has not been accounted for – and all the revenue is mostly from the legacy BB7 platform. I was always skeptical of Blackberry’s comeback attempt with the Z10 and BB10. Always felt that Blackberry was looking at the wrong end of the market to stay relevant.
The good news is that it has a solid $2.6bn in cash and is debt free. The other is that the BBM would be made available to Android and iOS to increase its customer reach.
BB is seeking the current strategic alternatives –
1. Split the company. Spin of BBM as a services group
2. A sell out to a possible suitor for the hardware business – BB becomes a services company
1. Sell out the unit as a whole.
Going forward, BB is not only pruning its workforce but is cutting down its portfolio also, focussing on enterprise and prosumer-centric targeted devices, including 2 high-end devices and 2 entry-level devices in all-touch and QWERTY models. Blackberry is also supposed to be refocussing on end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This means that Blackberry is exiting the consumer market and getting back to its fort- the enterprise.
In any case Blackberry now ceases to be the force it was in smartphones. Blackberry had its moments in smartphone folklore and history – and yet again the example of a mobile phone company – which was out innovated in the game.
Read other posts:
2012: Make or Break for Yahoo!, Blackberry and Nokia
Blackberry share prices fall below book value
Blackberry: Past Perfect, Present Tense, Future Unsure : Part 1, Part 2, Part 3, Reprise
The cost and benefits of options and opportunities not taken can never be estimated in its entirety. The same could be said for Nokia rumoured move ( Plunge be abetter word) to Android.
Before the 23rd August 2013, Nokia Microsoft deal was announced, Nokia was considering options in Android on Lumia. This isn’t surprising – rather it was in common sense not to load up all its devices on Windows platform. It was a huge risk- which i am not sure has benefitted Nokia. Stephen Elop has himself accepted that this move was not considered in 2010 because of the dominance of Samsung on the Android platform would have meant Nokia being relegated to a lesser-than-what-was-expected status in the Android hierarchy.
Considering that Nokia lost market share from 32% in 20110 to 3% in 2013 – the Android shift as a plan B hardly comes as a surprise- rather it is much too obvious that the maturity of Android as a platform and the hardware competence and scale of Nokia would have made a great combination.Nokia would have saved money, reduced development costs and still play to its hardware design strengths. The Android scale would have also helped Nokia enter mid and low end of the smartphone markets earier, faster with greater acceptability.
Nokia had an option to exit the partnership late next year, but that certainly can’t happen now. It’s interesting to think about how differently things could’ve gone if Nokia had decided to go with Google rather than Microsoft, but it looks like we’ll never know now.
Apple has been one of the most innovative companies in the world. Based on the vision of Steve Jobs, it has created products that truly changed the world, such as the Macintosh, iPod, iPad, and App Store. Despite these accomplishments, Apple’s pace of innovation has slowed, causing the company to lose its edge as a market leader. Aside from creating products that delight consumers and starting an entire industry of app developers, Apple’s relentless and rapid drive for innovation has made investors wealthy. When the company released the iPod in 2001, Apple had less than $5.5 billion in revenue and its stock price hovered around $20; the company’s total market capitalization was $7 billion at that time. Today, Apple’s market capitalization is about $500 billion and its stock price is currently around $500.
Apple’s poor record on innovation in recent years is also reflected in market share numbers. According to IDC, Android has 75% of the smartphone market, compared to Apple’s 17%. In addition, Samsung holds a much larger share of the world smartphone market than does Apple.
Apple was once the leader, innovating rapidly and bringing the most interesting products in the world to market. Today, the company lives on past success and future promises, without the innovation we expect. So, yes, the lack of new products has hit Apple hard. For proof, look no farther than Apple’s poor stock performance, which is truly a measure of confidence in the company.Since Steve Jobs sad passing, Apple has released extensions to existing products rather than anything profoundly new. Product line extensions represent a natural evolution for established brands. For example, Apple has released new iPhones, faster laptops, and better screens on the iPad but nothing game changing since the original iPad.
Lack of innovation is the kiss of death for a technology company that relies on innovation as the foundation for its existence. Both Google and Samsung now offer phones and tablets in various sizes, experimenting with various form factors, sizes, and operating system features.As an interesting point of comparison, look at this chart comparing the stock performance of Apple and Samsung. The blue line shows Samsung while the red indicates Apple. Note which stock is doing more poorly:
As Apple sits still, competitors are extending the concept of mobile devices and releasing numerous products. Samsung even introduced a smart watch ahead of Apple’s anticipated offering.
With the iPhone 5C and 5S, one has to sadly acknowledge that Apple’s glory days of innovation are past. There are many who opine that Apple’s products are so good that short-term product delays don’t matter in the larger scheme of Apple greatness. This tempting argument is wrong, however, because the company has run out of “insanely great” ideas. That the real problem and explains why the company once known as the world’s innovation king is now relegated to product line extensions and little more.
The iPhone 5C and 5S are great products – but they are not fundamentally new nor are they insanely great!!
Reproduced by ZD.net article by Michael Krigsman
Guess the latest gate crasher on the Smartphone party? The rumours have been doing rounds for a while now – But Amazon, the king of digital distribution seems set to take on the likes of Apple, Google and Samsung on smartphones. Amazon already has a current portfolio of Kindle Fire tablets and Kindle eBooks – and is reported closing down on 2 smartphones and 1 audio streaming device.
One of the devices that Amazon is working on is a 3D screen smartphone. Details are sketchy – but this could be Amazon’s flagship device – with retina movement sensors and a 3D effect overlay.Also of interest is the rumour that Amazon could release a smartphone for its consumers free of charge without a wireless contract. That could be a very significant departure in pricing strategy in smartphones.
The smartphone game is changing. New smartphone entrants Amazon and Google are beginning to generate revenue primarily through e-commerce sales and online advertising, respectively. As such, they are more willing than their competitors to sacrifice device profit for market share and reach to build on their digital distribution networks.
Its interesting to see how the Apples, Samsungs, Microsoft-Nokia’s of the world react to Amazon’s disrupting pricing. Amazon is doing a Gillete with a easy entry price for the razors and making the consumers pay for catridges.
1. The key for Amazon is to establish a user experience and interface so uniquely engaging that users would stayed hooked to it. Associate that to the Gillette shaving experience and how the user was not able to get rid of the Gillette habit and would spend more and more monies on catridges, foams and others… Yes, Amazon must do the Gillette magic.
2. It has the digital content that can upend a lot of device-only players – such as Samsung.
3. Also key to this equation is the reach and penetration of Digital content in the third world countries – it will require a lot of different other monetization models for Amazon to get threshold volumes in such markets.
Smartphone shipments in india grew by 50% QoQ to 9.3 million units (Q2, 2013) as against 6.1 million units(Q1, 2013)
The total mobile phone shipments increased by 4% QoQ and 21% YoY in the country.
The feature phone market is declining but still accounts for 85% of the mobile phone market in the country.
67% of 9.3M Indian Smartphone Shipments In Q2 2013 Are Sub-$200 Phones
Shipments of Phablets (smartphones between 5-inch to 6.99-inch screen size) shipments have increased by 17 times annually and now accounts for 30% of the smartphone shipments in Q2 2013
Shipments of smartphones between 3.49-inch and 4.99-inch has also increased significantly over the past few quarters and now account for the majority of smartphone shipments for the quarter Smartphones less than 3.49-inch has dropped massively and now accounts for only a small portion of the smartphone shipments.
Windows Phone has taken 5.6% market share in India, largely on the strength of Nokia’s smartphones, which had 5% of the market.
Top 5 Smartphone vendors- Micromax is closing in on Samsung for no.1 spot, riding the ‘phablet’ wave
– Samsung continues to lead the smartphone market with 26% market share, driven by shipments of low end Samsung Galaxy Star and other mid range smartphones. Samsung’s massive aggressive marketing in the country has a significant contribution to this.
– Micromax has 23% smartphone market share and has crossed 2 million shipment units, significantly driven by Micromax’s Canvas series.
– Karbonn has 13% smartphone market share which has apparently seen an uptick in its A series and the newly launched Titanium range of smartphones.
– Nokia has 5% smartphone market share which has apparently seen an increase in Nokia Lumia 520 sales volume. Dedicated advertising and marketing push towards positioning Lumia phones as a quicker and cooler replacement to other brands is working in its favor. Nokia is still feel the growth is still very slow as compared to other players, primarily due to the Windows Phone 8 operating system which is is slowly filling all the major gaps in the software but is still quite nascent as compared to its iOS and Android counterparts.
– Sony also has 5% smartphone market share and IDC says Sony’s mid tier phones and low end dual SIM phones are doing well.
The key for growth in India, as with most emerging markets, is low-priced phone equipped with a large screen and dual SIM slots. The dual SIM phenomena, which had accelerated the growth of local vendors in feature phone, turned to dual SIM smartphones flooding the Indian market. Topped with an attractive sub $200 price tag, these smartphones are proving highly attractive
Canaccord genuity in its Q2, 2013 Smartphone value share reinforces the change in guard in the smartphone segment. Samsung seems to be riding on its multi-product Android portfolio to fork into Apple’s pie.
Apple has 53% of industry profits (as against 71% last year) and Samsung has 50% (was 37% last year). Samsung keeps gaining quarter on quarter and Apple keeps loosing. While Samsung and Apple generated $5.2 billion and $4.6 billion, respectively, in handset profits in the second quarter, according to research firm Strategy Analytics. By comparison, the mobile division of LG Electronics Inc., the No. 3 smartphone maker, had a $54 million operating profit with a 5.3% share in the latest quarter.The duopoly stands in stark contrast to the long list of companies jostling to establish themselves as a formidable player, including Nokia Corp., BlackBerry Ltd., Sony and LG. Even fast-growing Chinese manufacturers such as Lenovo Group Ltd., ZTE Corp. and Huawei Technologies Co.—all major brands in the burgeoning Chinese market—have yet to prove that they can deliver consistent profits in smartphones.
Will a combination of iPhone 5S + iPhone 5C (Low end Apple iphone) be able to turn it around for Apple? Samsung currently seems to have awesome momentum and might end of taking the No.1 position in Smartphone profits by Q4, 2013.
What doesnot change is that the rest are truely “laid to rest”. From a consumer perspective, this duopoly can be damaging in terms of choices. Device Makers may start throwing in the towel – What with no profits and cash burns. NEC Japan is quitting business.
HTC has reported a 83% drop in profits.
Global smartphone shipments have galloped by 47% year on year (2013 versus 2012). Android captured 80% of these numbers – monopolizing the smartphone space. The Android growth is powered by its distribution across all smartphone OEMs (apart from Nokia), competitive licensing costs and a large eco-system of Apps and Auxiliary devices. Apple slipped to its worst performance in last 3 years where as Microsoft went up to its best performance in the last 3 years.
The story in numbers…
Apple’s line has been stagnant for a while and is wilting under the relentless Android attack. It all remains to be seen if the September 2013 launch of iPhone 5C and 5S will change the tack for Apple. The delay in adding to the product line is taking its toll on Apple – and Apple is seen to have frittered away a massive lead in technology and user experience. Unless iPhone 5C is able to ring in numbers and iPhone 5S places the proposition way and far beyond Samsung and Android, Apple’s Halo is on the wane by serious proportions
Microsoft is fairly constrained in terms of number of partners, a high license fee for hardware partners and support for high end Octa-core chipset devices. If Microsoft were to fix these issues, it could enable a better platform acceptance and it could go on to challenge Apple in the number 2 position in the Smartphone OS space.
This is the first of a two part blog on Apple reliving the mistakes that Nokia made 4-5 years back.
In 2007, Nokia was the biggest thing in the mobile phone market. It held 60% of the global smartphone market and more than 40% of the overall handset market. Its handset operating margins briefly topped 25%, something that was thought to be impossible in the phone business. In the summer of 2007, Nokia released the N95 – a 2.4” screen dual slider phone with a 5MP camera which in 2007 was a package that couldnot be bettered. N95 went on to create a roar in the markets – but imperceptibly Nokia’s slide was beginning. 3 months after Nokia launched N95, Apple launched iPhone and the rest is history.
The initial iPhone and even the early Samsung phones played on the large screen format – 3.2” – 3.5” and the likes. Nokia’s response to the first smartphones, was a bettered N95 – the N96 – crammed with more features which failed to tickle the market. Touch was catching on – and Nokia was lethargic in its reaction. In an age when customers were falling head over heals in love with the iPhone, Nokia was lamenting the iPhone on subjects such as 2MP Camera and lack of Bluetooth and loaded up the 2.6″ N96 to fightback (in vain). By the time, Nokia responded with the 5800 XpressMusic, it had fallen behind on its tracks. It repeated the mistake with N97 – a large screen which was woefully resistive – in an era when the iPhone3GS ruled and the Androids were beginning to fly. Nokia was edged out of the market – and had fallen behind. Nokia’s next releases N900, N8 failed to woo customers clamoring for the iPhone.
2013 – Apple’s incredible run through from 2007 onwards is slowly running out of steam and gross margins had peaked in early 2012. Apple played economies of scale on standard screen sizes to keep its BOM (Bill of Materials) cost low – driving operational efficiencies in production. However, they seem to have been reading the market wrong as the era of large screen devices was stepping up considerably against the 4” iPhone. Premium buyers were increasingly flocking to the 4.5” segment smartphones and the 5.5”+ phablet space and Apple’s roadmap to large screens is already a couple fo years behind.
The sense of déjà vu is not wasted – as Apple repeats the same mistakes in 2013 that Nokia made in 2007.
Continues to Part II
The new IDC report for smartphone shipments in Q4, 2012 hands it over to Android – which seems to have reached more dizzying heights than what Symbian/Nokia ever reached in their near monopolistic regime heydays. the two systems accounted for 91.1 percent of operating systems on all smartphone shipments during the fourth quarter of 2012. For the year 2012, Android and iOS accounted for 87.6 percent of operation systems on smartphones shipped.
Android smartphone vendors and Apple shipped a total of 207.6 million units worldwide during Q4 which is a 70.2 percent increase from the 122.0 million shipments of Q4 2011.
Android Saw triple-digit growth for the year. According to IDC, Samsung was the biggest contributor to Android’s success as 42.0 percent of all Android smartphone shipments during the year were by Samsung. The report notes that the intra-Android competition has not stifled companies from keeping Android as the cornerstone of their respective smartphone strategies.
At the end of 2012, Android had a 68.8 percent of market, with over 497.1 million shipments. In 2011, Android’s market share was 49.2 percent with 243.5 million shipments.
iOS also continued to register strong growth. But the report notes that iOS’s year-over-year growth has slowed compared to the overall market. Of course the report also mentions the growing buzz around a large-screen iPhone and a cheaper variant, which it says would help sustain growth. iOS shipments for 2012 stood at 135.9 million smartphones which represents an 18.8 percent market share. This is a 46 percent growth compared to 2011 when iOS smartphone shipments stood at 93.1 million at a market share of 18.8 percent.
BlackBerry OS: The report states that the decision to postpone the release of BB10 to 2013 left the platform vulnerable in 2012 and reliant primarily on older smartphones running on BB7. As a result, BlackBerry’s tight grip on enterprise users has loosened. BlackBerry had 32.5 million shipments for 2012, which gives it a market share of 4.5 percent. This is down 36.11 percent from 2011 where it had 51.1 million shipments and a market share of 10.3 percent.
Windows Phone/Windows Mobile: The report notes that this has made some progress in Q4 of 2012. Nokia’s Lumia phones were the key driver in Microsoft’s success, says IDC. Windows Phone/Windows Mobile had a 17.9 million shipments and represents a 2.5 percent market for mobile OS on smartphones. This is 98.9 percent increase from 2011 when it had only 9.0 million shipments which was a market share of 1.8 percent.