So Nokia is world's biggest computer maker in 2008

So yes, its time for yet another instance of mobile phones taking surprising victories in the digital convergence battle. I reported the general trend in my previous posting, and the conclusion that when only considering "smartphones" - even by that tight measure of these new "pocket computers" - the numbers have tilted this year, and now for 2008 the world's biggest computer maker is no longer Hewlett-Packard or Dell, it is Nokia.

Today I dug up the various numbers as best as I could (using Gartner, Analsys, IDC, Apple). I included all PC sales, all smartphone sales, all stand-alone PDA sales, and estimated also mainframe and mini computer sales into the total, and arrived at a total computer sales figure for the last four quarters (from October 2007 to September 2008) of 465 million. Note that PCs account for 300 million of those, so when we add the smartphones we are going about 50% bigger in the overall picture. But I think it is a fair measure to include smartphones (see below).

So here is the breakdown according to my analysis of the biggest computer makers in the world in 2008:

Nokia     64.1 Million units   13.8% market share
HP         55.2 Million units   11.9% market share
Dell        43.8 Million units     9.4% market share
Apple     35.0 Million units     7.5% market share
Acer       30.8 Million units     6.6% market share
Lenovo   22.1 Million units    4.7% market share
RIM         19.8 Million units    4.2% market share
Toshiba  12.9 Million units    2.8% market share
Others  181.9 Million units  39.1% market share

Total    465.5 Million units 100.0%

THEN I NEED TO MAKE A COUPLE OF NOTES

First note on Apple. I also was very generous with Apple, I not only added their official numbers for Macintosh PC and notebook sales, and iPhone sales, but also the iPod Touch is another equivalent "pocket computer" and could be considered a PDA just as easily as a media player. Because it includes the ability to download applications and otherwise is a valid computer, only very small, I am including it.

But Apple does not release iPod breakdowns in sales, and no analyst is supplying them either. So I made a very rough estimate - and simply because there are four models of iPods available (Touch, Classic, Nano and Shuffle) - I attributed one quarter of all iPod sales to the Touch. I am pretty sure that is way too much, considering that the Touch is at the top end of the price range and costs nearly five times as much as the cheapest Shuffle - but with these numbers Apple would be fourth biggest computer maker. It is relatively close to Acer, so if my math is badly of, then Apple may fall down one peg. The distance to Dell is too much that its extremely unlikely that Apple would be the third biggest.

Second, a note on Nokia

Nokia numbers are only the smartphone sales as reported by Gartner and Analys. So the mainstream Nokia phones, from low cost phones to featurephones, are excluded. The above count is only for smartphones. Also I have not included the Nokia non-phone devices (their media players and internet tablets) even though these could also be included, because I don't find those numbers reported. With them the Nokia number would be marginally bigger still.

Third on the full 2008 year numbers

Note that my analysis can only include reported numbers so obviously I cannot report on the current quarter until those numbers are formally released. But I believe the actual numbers will be very similar to these, because of the overall economic downturn. So it is very likely that the actual fourth quarter 2008 numbers are not as much above their 2007 numbers, as the earlier part of the year has been. With companies the need to slash budgets has been severe, so its likely that corporate purchases of PCs is particularly hard-hit this fourth quarter. With residential purchases, the laptop or PC is quite an expensive gift, so my gut says, that types of gifts are going to suffer more in Christmas sales than smaller gifts. And this is likely also to affect smartphones. So at least the percentages will be very similar after the fourth quarter 2008 numbers are released, the aggregate number may end up a couple of percentage points higher (or not) for this year. None of the companies will move significantly on their rankings based on fourth quarter performance and Nokia's lead is now insurmountable for this year.

FINALLY, WHY IS A SMARTPHONE A COMPUTER

Some might argue that every mobile phone is a computer (as its guts are of course managed by microprocessor) and that can be justified. Almost all modern (non-smartphone) mobile phones do have a browser and far more than half of new phones this year have Java and can accept downloads of content and things such as games. Those who use this defintion will probably know that Nokia became the world's biggest computing device manufacturer back in the early parts of this decade, selling more phones (ie "computing devices") than all PC makers put together. But by this definition should we also consider the Playstation a computer and our home DVR/PVR (hard disk drive recorder for our TV, like TiVo or Sky+). We could then add our microwave and coffee maker while we're at it..

I think basic mobile phones should not be considered computers. But smartphones - that is a totally different matter. In my long posting for the holidays, I celebrated 50 years of computers in Finland and in it I also made comparisons of the performance of computers and that of smartphones. A modern smartphone has all the elements traditionally considered key parts of a true computer. It has a CPU, memory, storage, an input and output system. A smartphone has a standard operating system which allows users to download and install applications (software). Not just content, but actual applications.

The dictionary definition of a computer says the device can be programmed, and the common usage today means it can accept applications to be installed by the user (this was not the common usage in the 1970s, in the era of the mainframe when the PC emerged; at that time common usage was a programming language compiler and all programs were coded in something like Fortran or Cobol or Pascal etc. None of us normal users bother to use a programming language today on our PC). The definition says can be programmed and a normal phone does not accept user-installed applications, but every smartphone - by definition - does. It fits the definition just as well as a supercomputer.

And if you're thinking "but the phone is a toy, its not a "proper" computer, then do recognize that the top end smartphone of today (like my Nokia E90 Communicator or N82) has the specifications that match essentially all critical components of a supercomputer from only some 20 years ago, the Cray 2. For example the processing speed of these top smartphones runs roughly in the 1,000 MIPS range (millions of instructions per second). That was the speed of the Cray 2. Its earlier sibling, the Cray 1, had a speed of 150 MIPS. A top end Nokia managed that speed three years ago.

Note I am not arguing that we have a "real supercomputer" in our pocket. But I am arguing, that the smartphone fits all the definitions of a computer by what it is, and what it can do. And by its performance, it will match the performance of the most powerful computer on the planet from two decades ago. Or more close to everyday people, will match the performance of an entry-level laptop only five years ago.

There are smartphones that use the Windows operating system (modified for mobile phones) and the Apple iPhone uses a variant of the Macintosh OS/X operating system. There are smartphones that use Linux the third of the main computer operating systems. I think it is perfectly valid to consider smartphones as computers today. They may be small, but they are computers in every way. To discriminate against them, to me is as dumb, as if someone in the 1980s had said that we should not count the personal computer as a "real computer" and only mainframe computers should be included in statistics of computers.

HOW IS IT USED?

So then you might say, ok, it has the performance of an old computer, maybe, but its use is as a phone, so it should be considered a phone, not a computer. I think this is a tricky angle. What if you have an old desktop computer that sits at home, connected to the broadband, but you have your newer laptop on which you do all of your regular computer activities. And you have reconfigured your desktop with Skype to be your phone, and you only use it as a phone. Did the computer stop being a computer now because its primary use is as a phone? No, it is still a computer.

But consider this. The most common use, the so-called killer application for a PC today is internet access. Do we use a smartphone for internet access? Yes we do. Look at an iPhone, massive internet access, both over 3G and on WiFi. The smartphone is USED like a computer is used. For many iPhone users, the internet access is the most desired feature, far more important than voice calls, so it is, for those users, primarily a wireless internet access device. Totally replicates computer use, and there is even the study earlier this year that about half of iPhone users are migrating computer use away from their laptops and onto their iPhones. Its no fantasy of mine. An iPhone is for many of its owners, a partial (or even complete) replacement of a computer. If it replaces a computer, and it fits the computer's definition perfectly, should it not be called a computer then?

And take a common application used on personal computers today, email. Now a smartphone, Blackberry. Across most of its users, the Blackberry is the preferred and primary email device. The first evidence of email usage shifting away from laptops to Blackberries was reported back in 2001 and has been consistenty reported this whole decade. Another computer use, that is clearly perfectly capable of being done on a smartphone. Its not just that it is capable of performing like a "real computer", a smartphone is so good at it, that many people are shifting their computing use away from desktops and laptops to smartphones like the iPhone and the Blackberry.

And I haven't even started on the Developing World, where mobile phone based internet access outnumbes PC based internet access by as much as 10 to 1. Where a smartphone is often the only way to have any computing ability at all, within a reasonable budget - and where landline based broadband is non-existent, or intermittent, and often frightfully expensive. Talk to users in the Philippines or India or Kenya or South Africa, that can a smarphone be a computer, and they'll mostly say, that it not only can be, it is.

WILL NOT STOP USE ON BIGGER COMPUTERS

And please don't misunderstand me. I'm not singing alarms of the "end of the PC". Just like the fact that mobile emerged as a new mass media channel, did not end the previous six media, just like the internet did not end the previous five or TV end the previous four mass media. They all just adjusted for the newest form. The same is true of smartphones and bigger computers. We will not stop using laptops and big government etc uses will not stop with mainframes and supercomputers.

What the smartphone now allows, is for some computer use to migrate to it. It really does make sense, that heavy email users love their Blackberries. It is better for many uses of basic email, than a PC. The same will happen with many other uses, like the iPhone which is a particularly well used camera to upload pictures to Flickr, ahead of many major digital camera brands with their SLR versions; and ahead of all other cameraphones.  Its particularly good at both easy capture of pictures - and easy uploading (to Flickr in this case). With a digital camera, we usually have to go the extra step of moving the pictures to our PC, and from there upload to Flickr. But it can be done direct from a smartphone, and apparently iPhone users are very prone to doing so.

This kind of usage will be seen on smartphones. Probably lots of videos, so YouTube watching (and uploading videos from smartphones, in particular those with DVD quality videocameras like my N82) will be very suited for smartphone use. But note, its not a particularly pleasant environment for editing pictures (no mouse for example, and in editing pictures you can never have too large a screen ha-ha). So for editing our images, if we have one, we will prefer to do that on a PC.

So please don't misunderstand me, even though some users of the Blackberry or iPhone are shifting behaviour away from the PC, that is not going to shift the majority of PC users to smartphones. It took laptops 23 years to replace desktops as the most sold form of PC this year, and even so, the installed base is predominantly desktops still in 2008, and will continue to be for a few more years. The PC has at least a decade, proably two, before the smartphone could hope to reach it in size of the installed base.

AM NOT ALONE

Also this is not something only "Silly Tomi" would think of. Nokia has been calling its N-Series not mobile phones, but since 2005 already - for three years - they've called them "multimedia computers." Apple calls its iPhone their variant of the netbook. And that is also what the Economist concluded in its big celebration of the Personal Computer anniversary issue. So this is becoming an accepted view, that smartphones are indeed small, pocketable palmtop sized computers. But real computers, yes.

It is a question of size only. The smartphone is the most personal of computers, it fits in our pocket, we carry it everywhere. It should be counted in the total numbers of computers. And with that change to how computers are counted, yes, this year for the first time, Nokia becomes the biggest maker of computers in the world, Apple jumps to fourth place, and RIM hits the seventh biggest maker slot, ahead of Toshiba who invented the laptop. You can quote me on that..

MORE INFO

If you new to the mobile space and want to understand the scale of the mobile telecoms industry (of which the smartphone is a major growth element), I have released my widely referenced annual review of the industry size. It was also given the (tied for) best blog recognition by the last Carnival of the Mobilists for the year.

If you're already headed into the smartphone space, in a post-iPhone era, and need to understand how to build compelling services for mobile, I have a good primer for you, including the seven unique competitive advantages of mobile in the article on the 7th mass media channel.

And if you are dubious of this claim, or unsure how to feel about smartphones - should they, or should they not be considered computers, for that I wrote an update to this story, examining five eras in computers with a good comparative table, which may help you understand what the trends are, and how consistent (or inconsistent) the smartphone is in those trends. The story is here Digging Deeper.

Comments

[Roland Tanglao]

as always, amazing "ahead of the curve" analysis"!

happy holidays! ...Roland

[Philippe]

You are right on all points. Smartphones are computers, etc...

Another conclusion I would add: entrance of big players is NOT from the top (e.g. where is IBM or Cray now ?), it is from the bottom, the small things that get so numerous they absorb the big ones. So look and the landscape today, take a snapshot and imagine... Intel or Texas Instruments ? etc...

[Tomi T Ahonen]

Hi Roland and Philippe

Thank you for the kind comments. And yes, Philippe good point the small ones are the victors usually in this kind of transition. I remember seeing once the market evolution of computer hard drives, and with every generational shift, the old big maker lost out and the new smaller player mastered the newer format and took the global lead - only to lose it in the next transition. We see this trend all the time in technology evolution ha-ha..

Thank you for comments

Tomi Ahonen :-)

[Will Sandstrom]

A mega fantastic read. Now kindly read about many items that we American-Finn bloggers gathered by not only attending educational institutions--some having attained PhDs--but having near assuredly walked the walk in the dark alleys of Finno-Ugric history, from Egypt to Finland and elsewhere. http://finnics7.blogstream.com. Will

[Darryl]

by you definition my microwave oven should be considered a computer. its easy to get carried away with statistics.

Oh BTW: you do know there is an AUTO INDUSTRY, most Nay ALL cars produced these days have very powerfull computers onboard, far more computer power that was available to put man on the moon.

My high end digital watch probably has more processing power than than the computer on the lunar lander.

So when you consider the vast number of common computer packages in car's they would probably out sell your rather odd figures.

Plus: and cell phone is a cell phone, not a computer, if you want to play that game you have to either include everything with embedded cpu's in it not none of them.

I dont consider a car a computer, nor do i consider a phone a computer, its a phone.

but i do agree the processing power of these devices is impressive. and they do have applications.

but there are much more than cell phones, printers, cars, camera's, microwave ovens, even credit cards !!

so you really just comparing applies with oranges,

[Rodney]

Did Darryl even bother to read the article before posting his silly response? The argument about where the cutoff is between a computer and an embedded CPU was quite well covered.

[jamppa]

Have you included also Nokia S40 devices? They are as much as a smartphone that iPhone is.

[Tomi T Ahonen]

Hi Will, Darryl, Rodney and jamppa

Thank you all for the comments. I'll reply to each individually:

Will - thanks, yes, good stuff. I did do a big "celebration" of Finnish accomplishments in the computer industry in the 50 years of computers blog (which is very long, and I got carried away over Christmas break on the preparatory side, so it has quite a comprehensive review of the computer industry globally, first, before getting to the Finnish side, and the Finnish contributions).

Of course this blogsite is dedicated to the industries around digital communities and social networking, and related concepts from engagement marketing to digital convergence. So I think I'm already stretching the issue quite a lot when I discuss the early computer industry ha-ha, and going beyond that into Fenno-Ugric (for those not familiar with the term, this is the small tribe of peoples from the Ural Mountains in Russia, part of who emigrated West and settled in Hungary, Estonia and Finland - ie we four groups are related ethnically and are totally unrelated to other Europeans such as the Germanic peoples such as the Germans, French, British, Scandinavians, Spanish, Italian etc - and the Slavic people like the Russians, Polish etc. As a small ethnic group, we also take great pride in our collective heritage, so there is a lot about the history of the Fenno-Ugrics and where they have had an influence in the past...)

Darryl - I think Rodney already replied to you rather well, but yes, let me be very specific. You you made four arguments and said:

The Auto industry. Yeah, sure, the modern car has a lot of microprocessors to control anything from the anti-lock brakes to the fuel efficiency of the car. But my point was not that a smartphone is a computer, because it has a CPU, I said it was a smartphone because it could be programmed (ie software installed). By that definition the car or your microwave or digital watch is not a computer, it does have CPUs with impressive computing power, but those processors are hard-wired to do only a single task. The modern DVD player is equally a microprocessor-guided device with many of the elements of a computer, but we as users cannot alter its use from playing DVDs (and CDs) so it does not count as a computer.

A smartphone - not all cellphones, but a smartphone - does accept software applications that can be installed, to turn it into a word processor (and with a bluetooth enabled keyboard and TV-out to a regular TV set, it totally replaces a computer in such use) or a spreadsheet or other common PC applications, not to mention email, web browsing etc. No, the car argument is not valid, car processors are not user-programmable.

Digital watch - falls for the same reason as the car. Most digital watches are hard-wired to only show time (and other similar tasks like a calendar). Are not computers, are like a regular cellphone is only a phone with some enhanced features, but is not user-programmable like a smartphone is.

"Cell phone is a cell phone, not a computer" - this sounds very familiar. First, please note, that for all of those who prefer to send SMS text messages rather than place voice calls, the cell phone is no longer "just a cell phone" as they existed a decade ago. It has evolved into a new type of gadget, far more capable than "just a phone". The cellphone itself has already evolved. Now add the camera feature. The most common camera resolution of new phone models in the UK in December 2008, was 3 megapixels. There are 1.9 billion cameraphones in use (vs under 200 million stand-alone digital cameras) so for the vast majority of the population worldwide, their only camera, is the one on their cameraphone. So while a decade ago, a cellphone was only a phone, now it is the most common type - while very limited in capacity obviously - of snapshot camera. No, Darryl, the cellphone today is far more than just a phone.

"there are much more than cell phones, printers, cars, camera's, microwave ovens, even credit cards"

Actually you are wrong on all but one of those counts. There are only about 950 million PCs (may have passed 1 billion end of 2008, the new numbers aren't out yet). So even if we assume everyone who owns a PC - and note some of these are owners with two PCs such as a desktop at home, and a laptop - but if we assume the total ratio is 1:1 for printers to computers, the world population of printers is less than a billion today. But there are 4 billion cellphone subscribers with 3.4 billion unique phones (some have two subscriptions but only one phone).

The others you list, cars - the world total car fleet is about 850 million. Cameras, there are about 200 million digital cameras, and another under 100 million film-based reusable cameras, and they sold about 1.4 billion disposable cameras at its peak in 2004, so no, there are nowhere near more cameras than cellphones. Microwave ovens, well, the world population of TV sets is 1.4 billion, and I'm certain more homes have a TV set than a microwave so the number of microwaves is far less than cellphones. Credit cars, yes the total number is somewhere near 3 billion, there are about 1.6 billion unique holder of a credit card (mostly employed adults in the Industrialized World, who tend to have 3 or 4 credit cards per person). But even here, 4 billion total subscribers of cellphones, and 3.0 unique subscribers (discounting all multiple subscriptions and all multiple cellphone owners).

And you can't argue a credit card is a computer (today), it only has a memory chip, not a processor, so at best you could equate it with a memory stick, not a full computer by any definition.

Apples and oranges, I really don't think so. A modern smartphone - not all cellphones, but one like the iPhone, can be used pretty well like a laptop, not as good in everything, but almost any use that normal consumers put their laptop today, can also be done on the iPhone. Why not then count it as a smaller computer.

Rodney - thanks, yeah, Darryl didn't seem to read the article.

jamppa - good point. Yes, many S40 devices also fit the definition, which would explode the total base of pocketable computers for the Nokia brand, but the problem is that there is not a good breakdown of the types (that I've seen at least) so the best I can do is to count those smartphones (series 60) that are reported in the industry. The real number could easily far bigger if all equivalent devices were counted.. Maybe Nokia will give us that number some day ha-ha..

Thank you all for writing

Tomi Ahonen :-)

[Topo]

There are so many means to compare the sizes of companies: E.g. Market value for Nokia is $ 16,487,952,320 and for Apple $ 82,768,737,850.

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[Avery]

I never see nokia brand computer in China,how can Nokia be the No.1 in the computer market in 2008?

[Refurbished Computer]

My personal experience of Dell computers is very good because it is cheap with lots of features.

[cheap computers]

I think it is a fair measure to include smart phones.

[cheap computers]

The mobile phone and the personal computer market converging and that because millions of people have their first Internet experience on a phone, this somehow suggests that Nokia should jump into the laptop game.