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« How Bad Will Nokia Q4 Be in Smartphones? Worse Than You Thought | Main | Don't Mess With Success! An Analysis of Nokia Carrier-Relations and Meddling by Elop »

December 12, 2011

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uk essay writing

woa ! Wonderful!

cycnus

Tomi, Thanks for compiling this data.

darwinphish

Tomi: If you can, please provide more details to back up the claim, "full smartphone population is less than 23 months old". Also, does this mean their are an insignificant number of smartphones in use older than 23 months? Thanks.

E.Casais

Tomi,

I have the strongest doubts about the average replacement duration you mention here -- 17 months generally, and only 11.5 months for a smartphone.

Other analysts have arrived at much longer cycles -- see for instance http://mobilefuture.org/page/handset-replacement-cycle.pdf, although the cycles computed seem a bit high (but the article delves into the possible causes).

In Japan, the replacement cycle is lengthening to more than 2.5 years (see: http://www.telecompaper.com/news/handset-replacement-cycle-in-japan-lengthens-survey).

Furthermore, I just cannot reconcile those 11.5 months with the fact that the majority of smartphones seem to be acquired on 12 or 24 months contracts, i.e. the average would logically lead to something longer than 11.5 months.

Nor can I reconcile your stats with the (admittedly anectodic) observations of people I know who usually keep their mobile phone for longer -- three years seems about right.

Where does that often quoted figure of 17 months come from?

E.Casais

Well, I forgot this:

Otherwise, excellent work on the statistics!

It might be interesting to compare the various statistics to what VisionMobile arrived at in http://www.visionmobile.com/blog/2011/11/the-elusive-long-tail-of-mobile-shipments.

Tomi T Ahonen

Hi uk, cygnus and darwinphish

uk - thanks!

cygnus - haha, I thought you'd like this blog. cheers!

darwinphish - yes. The world had 450 Million smartphones in total at the end of 2009. They were all replaced (after we remove new sales) by November 2011 so yes, the number of smartphones in use that are actually older than 23 months is trivial in size, of the magnitude of less than 2% ie won't be noticable.

E - will respond to you separately..

Thank you all for the comments, keep them coming!

Tomi Ahonen :-)

Tomi T Ahonen

Hi E (I had problem posting the reply, perhaps because of its length..)

(this is part 1 of 2 for you E)

E - I know. I read all that all the time. The problem is that most of the time those analysts do not understand our industry including multiple subscriptions, multiple phone ownership, prepaid accounts and various peculiarities about it. But the math doesn't lie. We know for a fact that at the end of 2009 there were 450 million smartphones in use (IDC Dec 9). So the total smartphone installed base will have been replaced (technically, assuming each person replaces their phone with only one smartphone - but when someone actually replaces the phone annually ie twice in this period - that allows someone else to wait for 3 years, right?). We know that we have to sell 450 million phones to replace them.

Then we know that there has been growth. We know now that the world installed base is (approx, so rounding to nearest 5 million) about 745 million smartphones in use. So we have to account for 295 million new sales of smartphones for first-time owners (which definition obviously allows for second simultaneous smartphone by the same owner, if that is the first time the person has two phones, then the first 'second phone' is also a new 'owner'). So first, lets account for the growth. From January 1, 2010 (to replace those 450 million existing smartphones) we have to go to about last week of December 2010 to sell those new customer 295 million (total 2010 smartphone sales were about 298 million).

Then how many more months of new smartphone sales into year 2011 to now replace those 450 million we wanted to replace? It will take to late November 2011 when they are all sold (this year will end with about 472-475 million smartphones sold).

So total smartphone installed base is replaced, counting from December 31, 2009 to about end of November 2011. That is 1 year and 11 months total replacement cycle. Half of that is the average replacement cycle ie 11 months and a half.

I know it may seem incredibly fast, but from your comments it sounds like you don't live in one of the most advanced smartphone markets (towards the top of the list). In the USA for example the typical consumer is only on his or her second smartphone (business users on third or fourth). In Europe we've had consumer smartphones much longer and they are typically on their fourth or fifth. In advanced markets like Singapore, Finland etc the majority of smartphone owners are on their sixth, seventh smartphone..

(Will post this, continue next)

Tomi Ahonen :-)

Tomi T Ahonen

(continuing to E)

As we get more familiar with advanced phones, we also get to value them more and use them more, so in almost all advanced mobile markets, the replacement cycles shrink. Then there is the shift from enterprise to consumer. Enterprise customers replace business phones on a pattern, slowly; while consumers replace more rapidly. And youth replace phones most rapidly of all.

But also prepaid. You mention most of your peers have contract accounts. Most of the world is on prepaid accounts so I am guessing you are in one of those countries (minority) where postpaid accounts are still prevalent.

One last thing about math. Remember the extremes. A phone will break down over time, the battery runs out, even replacement batteries are no longer available for older models; the keypad wears out, the screen gets scratches, the camera lens gets scratches and becomes fuzzy etc. Its rare to have phones of 5 years of age. But there are people who are extreme gadget freaks who will want a new phone literally every month. Thus the math works out, that one person with 12 new phones per year, accounts for as many as 12 people who get one phone every w years.. So the short end of the replacement cycle will 'skew' the math.

But all replacement cycles of ALL technologies are counted EXACTLY the same way. you take the existing number of cars on the streets, or airplanes in the fleet or television sets or whatever gadget or tech - and count new sales until they are replaced and that gives the total replacement cycle and the average replacement cycle is half that. Thus - all PCs are replaced in 7 years, average replacement of PCs is 3.5 years and so forth. For all phones it was 18 months in I think it was year 2007 then it came down to 17 months in 2008 and went back up to 18 months with the econoic crisis in 2009 but is now again down to 17 months for 2010 and will be falling again for 2011 by the early numbers as far as I can see. For premium phones its always been shorter and now smartphones do have an average replacement cycle of 11.5 months (globally). In some countries (laggards, like Germany, Canada etc) it will be slower but in advanced countries (Singapore, Sweden etc) it will be faster than that.

The 17 month number is from my consultancy TomiAhonen Consulting, I've reported the replacement cycle for about a decade now as I've been calculating it. Its been steadily coming down, was about 23 months a decade ago.

Tomi Ahonen :-)

Roman

Tomi, i think there is a mistake with apple and ios data in the last 2 tables. should not numbers be the same?

Steve Woodgate

One other takeaway from this fascinating data (thanks Tomi) is that the USA is less than 20% of the smartphone market size. I think this is something many people forget when they look at the impact of mobile on their business.

baron95

@Steve Woodgate, with less than 5% of the planet's population, close to 20% of smartphones in use is huge. And the US is still by far the largest smartphone market by units.

If you measure by revenue, it is closer to 35-40% - huge.

If your comments are meant to mean you can succeed long term in smartphones without succeeding in the US (like Nokia used to claim), you are wrong. Too many important trends get started/figured out in the US. If you are not competitive there (Symbian, Meego, Bada, etc) you simply die sooner or later.

Nokia and all the DoCoMo FOMO suppliers will be marginal players, until they figure out how to compete and be successful in the US. They can't hide from Apple and Android, even with the DoCoMo government assisted monopoly controls.

cheap beats

One other takeaway from this fascinating data (thanks Tomi) is that the USA is less than 20% of the smartphone market size. I think this is something many people forget when they look at the impact of mobile on their business.

cycnus

Tomi,

Actually I was surprise that RIM almost touch 100Million. I read somewhere on the web RIM only have sold 70Million+ phone, and have less than 60 Million user. Is that mean when someone upgrade their BB, it's passed down to someone else.

I also wondering why the symbian number were so low? I believe in 2010 alone, nokia sold 300Million+ symbian devices?

Then the smartphone number for Indonesia. Is it really that low? 18.1 Million user? I know you said that in the country like Indonesia, the data were only from big city, but in the city like Jakarta, Smartphone is almost everywhere. Those who can afford a brand new phone, can get Nokia N97 for around US$100 now, or maybe E71 for US$70. The second hand N8/E7 only cost around US$200. So, practically, a poor student also use smartphone because the second hand were damn cheap.

Thank you.

cycnus

... or maybe....
we need to know what considered a smartphone by this survey.
is a S60v3 (symbian non-touch) considered a smartphone?

kevin

@cycnus: Nokia sold 100M, not 300M smartphones in CY2010.

Compared to the 93M in the table, RIM has sold about 97M smartphones in the last 8 quarters (~4Q09 to ~3Q11)and 127M in the last 12 quarters.

Compared to the 114M in the table, Apple has sold about 113M iPhones in the last 8 quarters and 133M in the last 12 quarters.

Compared to the 168M in the table, Nokia has sold about 179M in the last 8 quarters and 226M in the last 12 quarters.

So I think, relative to the others, the RIM number is believable.

Touch/multi-touch is not a requirement for a smartphone. Based on Tomi's post, it seems user-installed apps is a requirement. S60 phones are considered smartphones (S30/40 are not).

cycnus

@Kevin

Thanks.
I was just trying to make sure what were the criteria used here by this 2 analyst, because some (stubborn) iOS centric analyst would put Nokia S60 non-touch as a non-smartphone platform in their chart.

Btw, you could also install apps for S40 platform.

Baron95

That accepted (not saying correct) definition of a smartphone is a mobile phone that runs one of that accepted smartphone OS - Symbian, iOS, Android, BBOS, WM/WP, Palm/WebOS, Bada/Meego/etc, with native apps, browser, etc. An S/60 d-pad, menu driven S/60 and early Blackberry is reported, by analysts together with the N8, iPhone 4S, Nexus SII.

I have never heard actual users refer to the simpler BB or Symbian phones as smartphones. In fact, consumers don't use that expression "smartphones", as in I'll buy a new "smartphone" much.

But what most people (consumers) consider a smartphone is what analysts call "superphones". Something with a large multitouch screen, decent camera, fast browser, large native apps selection, rich cloud services, music player, video capabilities, etc.

They actually think about the above by actual applications. Can I do Skype video calls on it? That implies front/back cameras, fast connection, ability to download skype app updates, interface to your contact list, etc. Can I download music, can I watch movies? Can I tweet/Facebook quickly. Does it have navigation.

The universe of true smartphones is about 40% of the reported numbers, but now is growing very fast.

I personally would draw the line at the iPhone 4/iOS4, N8/S^3, Nexus S/Android 2.x, Windows Phone 7.x and later/higher as being truly smartphones.

darwinphish

@Tomi: Thanks for the further explanation on replacement cycles. Makes a lot more sense now.

@Baron95:
The Google/Ipsos surveys included "self categorisation as smartphone user" in its smartphone criteria. I think a significant number of consumers do know and use the term smartphone, certainly more so than "superphone". Also, and I will admit my Canadian bias, Blackberries fit the majority of commonly used smartphone definitions, even if they do implement many "smartphone" features poorly.

All that said, I agree the term is now over used and encompasses too many devices. It would be very helpful if research companies could break down the numbers into different sub-groups. By the way, where did you get your 40% figure?

ds

WP7 doesn't support native Apps. Most android Apps aren't native either. They are vm appliances.
In the other hand Symbian, WM, Bada, Meego and Brew have always supported native toolkit as a primary way of developing for the platform. IOS on is kind of special, because while its Apps are native Apple explicitly enforces a single toolkit/language making its dev ecosystem more similar to non-native counterparts.
This only shows that the criteria can be quite fuzzy. E.g. while one may question s60 devices smartphoneness, and hesitate to include S3, he must admit that belle definitely qualifies. And the difference between them are largely cosmetic nite functional.

kevin

@cycnus: But even Nokia itself doesn't include S40 phones as smartphones (or converged devices) in its quarterly releases.

@Baron95: All Blackberries are considered smartphones.

I think the smartphone definition is sorely lacking, but as Tomi has said before, all that matters is the definition by those who do the counting.

kevin

@Baron95: Misunderstood your post. Ignore my previous comment about Blackberries; I'm in agreement with you.

guest

"IOS on is kind of special, because while its Apps are native Apple explicitly enforces a single toolkit/language making its dev ecosystem more similar to non-native counterparts."

I do not understand this.

whally

Tomi,

'The world had 450 Million smartphones in total at the end of 2009. They were all replaced (after we remove new sales) by November 2011 so yes, the number of smartphones in use that are actually older than 23 months is trivial in size, of the magnitude of less than 2% ie won't be noticable.'

Could you calculate what were the installed bases of Symbian^3 and pre-Symbian^3 phones (estimated) at 211 when Elop burned the Nokia platform? This could give us some insight about real usage markes shares at the time. These figures will give us the real potential of the excisting user base waht comes to Application Stores. Real comparision could be made if we had these numbers also of the current time.

cycnus

@Whally,

I don't really know where the pre-touch-screen user of symbian, but the QT Creator is somekind of not supporting it anymore (You need to download older version to create apps for pre-touch-screen symbian, and it's not being updated anymore).

And pre-symbian^3 also a bit struggling running an apps build with QT Quick (QML) as the RAM is very low, CPU were weak and there were no-GPU. It really amaze me Nokia still selling the 5800 variant and not bringing the Nokia 500 price down to US$ 120 to fight with Samsung Galaxy Y.


cycnus

@Whally,

I must add,
I think the Nokia ignorant on still selling the S60v3 (non touch symbian) and especially the Symbian^1 devices is killing nokia brand image. It makes nokia identical to bad product.

Nokia still selling the X5-01 @ US$ 180, E5 @ US$ 180, E72 @ US$250, C6-00 @ US$270 while user can get a Nokia 500 @ US$ 200. It really made me made, because I feel Nokia trying to cheat on their user who don't really know what's happened behind Nokia.

At the End.... I think Nokia might lose the respect their user have, because when they compared their US$180 for the already-dead platform (as in the recent version of QT Creator doesn't really supported it anymore, and won't have new apps beside the one already build.), they would kind of angry with Nokia.

....
Nokia really need to learn android....
Android can differentiate low end and high end, using the same version of OS.
And i think nokia should stop producing all non symbian^3 devices, and re-release it with Symbian^3.

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