Smartphones Q3 Final Numbers, Top 10 biggest manufacturers, operating systems, installed base etc

So its that time of the year. We're in the Smartphone Bloodbath wars, Year Three: Digital Jamboree. Its Q3. We now have all four big analyst houses who have reported their total market size numbers (IDC, Gartner, Strategy Analytics and Canalys) and as I always do, I use their average as my 'official total' and then fit the best possible fit, of the biggest manufacturers, operating systems etc to get the Top 10 market shares. I also report on the installed base, and for every quarter, I report individually for the manufacturers, how I think they're doing in the market share wars. So lets start with the top numbers

TEN BIGGEST SMARTPHONE MANUFACTURERS BY UNIT SALES IN Q3 2012

Rank . Maker . . . . . . Units . . . Market Share . Was in Q2 of 2012 . . OS supported (coming)
1 . . . . Samsung  . . . 56.2 M . . 32.8 % . . . . . .( 32.9 %) . . . . . . . . . Android, bada, Windows, (Tizen)
2 . . . . Apple . . . . . . 26.9 M . . 15.7 % . . . . . . ( 17.0 %) . . . . . . . . . iOS
3 . . . . Huawei . . . . . 16.0 M . . . 9.3 % . . . . . . (  4.6 %) . . . . . . . . . Android, (Tizen)
4 . . . . Sony . . . . . . .  8.8 M . . . 5.1 % . . . . . . (  4.9 %) . . . . . . . . . Android
5 . . . . ZTE . . . . . . . . 8.0 M . . . 4.7 % . . . . . . (   5.2 %) . . . . . . . . . Android, Windows
6 . . . . HTC . . . . . . . . 7.8 M . . . 4.6 % . . . . . . (   5.8 %) . . . . . . . . . Android, Windows
7 . . . . RIM . . . . . . . . 7.4 M . . . 4.3 % . . . . . . (   5.1 %) . . . . . . . . . Blackberry
8 . . . . LG . . . . . . . . . 7.2 M . . . 4.2 % . . . . . . (  4.2 %) . . . . . . . . . Android
9 . . . . Lenovo . . . . . . 7.0 M . . . 4.1 % . . . . . . (  3.9 %) . . . . . . . . . Android
10 . . . Nokia . . . . . . . 6.3 M . . . 3.7 % . . . . . . (   6.7 %) . . . . . . . . Symbian, Windows, MeeGo
Others . . . . . . . . . . . 19.8 M . . 11.6 % . . . . . . (  7.3 %) . . . . . . . . Android, Windows, others, (MeeGo), (Tizen)
TOTAL  . . . . . . . . . 171.4 M
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed 

So, first, Moto-Moto falls out of the top 10? Wow, goodbuy Google smartphones, eh? And who jumps in to replace it? Lenovo with its LePhone. Didn't you know Lenovo makes smartphones? I'm not surprised, so far they've only sold in China but are now eagerly expanding for example into India. Yes, already a Top 10 sized smartphone maker and yes, this is the same Lenovo from China that bought IBM's branded PC operations some years ago.

Other big news, Nokia tumbles from 3rd place to 10th, and is facing expulsion from the Top 10 as well - there's another hungry Chinese smartphone maker, Yulong, which sells smartphones under the Coolpad brand, who may topple Nokia already in Q4. The top is settled, Samsung rules this race now and Apple is in secure second place. Huawei is jumping ahead of the rest of the pack, and watch Sony, it finally is back to making smartphones profitably and showing aggression on the chart. Now lets look at the smartphone operating systems:

BIGGEST SMARTPHONE OPERATING SYSTEMS BY UNIT SALES IN Q3 2012

Rank . OS Platform . . . . Units . . . . Market share . Was Q2 2012 . . Manufacturers in Top 10
1 . . . . Android . . . . . . . 121.2 M . .  70.7 % . . . . . ( 66.9 %) . . . . . Samsung, Huawei, Sony, ZTE, HTC, LG, Lenovo
2 . . . . iOS  . . . . . . . . . . 26.9 M . .  15.7 % . . . . . ( 17.0 %)  . . . . . Apple
3 . . . . Blackberry . . . . . . 7.4 M . . .. 4.3 % . . . . . (  5.1 %) . . . . . . RIM
4 . . . . bada  . . . . . . . . . . 5.2 M . . .. 3.0 % . . . . . (  2.7 %) . . . . . . Samsung
5 . . . . Symbian  . . . . . . . 3.4 M . . .. 2.0 % . . . . . (  3.3 %) . . . . . . Nokia
6 . . . . Windows Phone . . 3.3 M . . .. 1.9 % . . . . . (   3.0 %) . . . . . . Samsung, HTC, Nokia
others . . . . . . . . . . . . . .  4.0 M . . .. 2.3 % . . . . . (   1.1 %)
TOTAL . . . . . . . . . . . . 171.4 M
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed

So yes, the so-called 'third ecosystem' Windows Phone did peak last quarter never coming close to its promise, and is again now in decline. 20 months after Nokia's CEO announced the death of Symbian, that old battered operating system based smartphones still outsell all Windows Phone smartphones, now when Windows Phone is two years of age - and obviously, Samsung's bada outsells both of those. On the top, Google's Android rules the world selling 7 out of every 10 smartphones on the planet. Apple's iOS is the second biggest smartphone OS, with Blackberry solidly in third place, now eagerly awaiting its 'savior' OS upgrade, BB10, with its first smartphones expected in the Spring. Symbian will probably finally fall below Windows Phone now for Christmas sales, but don't hold your breath, Windows Phone is proving a horrid and hated OS by the retail channel. So then lets look at the installed base

INSTALLED BASE OF SMARTPHONES BY OPERATING SYSTEM AS OF Q3 2012

Rank . OS Platform . . . . Units . . . Market share  Was Q2 2012  . Main Manufacturers of current base
1 . . . . Android . . . . . . . 559 M . . . 48 % . . . . . . ( 41 %) . . . . . . Samsung, HTC, Huawei, Sony, Motorola, ZTE, LG, SonyEricsson, Lenovo 
2 . . . . iOS  . . . . . . . . . 217 M . . . 19 % . . . . . . ( 19 %) . . . . . . Apple
3 . . . . Symbian . . . . . . 213 M . . . 18 % . . . . . . ( 25 %) . . . . . . Nokia, Sharp, Panasonic, Fujitsu, Samsung, SonyEricsson
4 . . . . Blackberry  . . . . 109 M . . . . 9 % . . . . . . ( 10 %) . . . . . . RIM
5 . . . . bada . . . . . . . . . . 24 M . . .  2 % . . . . . . (   2 %) . . . . . . Samsung
6 . . . . Windows Phone . . 17 M . . . 1 % . . . . . . (   1 %) . . . . . . Nokia, HTC, Samsung, ZTE
7 . . . . Windows Mobile . . 10 M  . .  1 % . . . . . . (   1 %) . . . . . . HTC, Samsung, LG, SonyEricsson, Palm, Motorola
Others . . . . . . . . . . . . . . 17 M . . .  1 % . . . . . . (   2 %)
TOTAL Installed Base . 1,166 M smartphones in use at end of Q3 2012
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed

So Symbian is now passed by iOS in installed base globally of smartphones. Other than that, no changes. The total count of smartphones in use is nearly 1.2 Billion and growing fast, we'll soon have more smartphones in use than all kinds of traditional PCs (desktops, laptops, notebooks, netbooks) when tablets are excluded. It will take a couple of quarters further, for smartphones to be more than half of all computing devices used, even when tablets are included in the other side of the equation.

BIGGEST MANUFACTURERS ANALYSIS

So then lets do the biggest manufacturers and their analysis. Again, this is starting to be pretty meaningless, as most big manufactuers now do most of their smartphones on Android, and gradually, most are also becoming profitable, the big 'war' seems to be coming to a close. But lets do this, as usual, in order of size. So Sammy goes first

SAMSUNG - 56.2M smartphones, 32.8% market share - profitable - B+

Samsung grew by 12% from Q2 which is a healthy growth rate. They report very good strong profits out of their handset unit and have now moved their migration rate from dumbphones to smartphones, at past half-point. All good news, all going very well for the Sammy. Except, that they are now 'only' growing at the rate of the industry. So I can't give them an A anymore as a school grade, I am grading Samsung as a B. We now await their first move into Tizen, the next Galaxy flaghship, the Galaxy S4 isn't expected to be released until after Christmas in the first quarter of 2013, so there isn't much excitement for the gift-giving season either. Good job but there were others that did a great job this quarter. Oh, and for those who want to see the split of Samsung's operating system choices, its this:

SAMSUNG SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEM
Samsung on Android . . . . . . . .90%
Samsung on bada  . . . . . . . . . . 9%
Samsung on Windows Phone . . 1%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

APPLE - 26.9 M smartphones, 15.7% market share - profitable - B

Apple did a good job again in Q3 (remember, we deal in calendar quarters here, not the fiscal quarters of given companies, so Q3 for Apple on our blog is always calendar quarter July to September). The iPhone is generating by far the biggest share of Apple's total profits, the usual decline trend of the once-per-year launch cycle of the new model would say this last quarter is bad, but as Apple cleverly releases its latest model right in the last week of the previous last quarter, this Q3 - that boosts their sales right at the end, and thus Apple showed a modest gain of 3% compared to Q2. Its less than the industry, but Apple's sales pattern as we know, is an annual 'step ladder' model, not a continuous growth curve, so this is not a bad sign. The big step is always the first full sales quarter of the new model, ie the iPhone 4 for Christmas 2012, ie now. And all signs suggest its going to be a big banner year again for Apple. What more can I say, they only use one OS platform. Lets move to strongly surging number three

HUAWEI - 16.0 million smartphones, 9.3% market share - profitable - A+

Huawei is surging strongly, becoming somewhat 'The Samsung of China' compared to the other Chinese smartphone makers, much like Samsung is far ahead of LG and Pantech in Korea. Huawei management said a few weeks ago that they are on target to hit 50 million total smartphone sales this year, so that means they are far outperforming their nearest Chinese rival ZTE which is reporting a lack of progress towards their sales targets. Huawei does all of its smartphones on Android, is profitable, grew 45% from Q2, that is definitely a performance worth an A+

SONY - 8.8 million smartphones, 5.1% market share - profitable - A

Welcome back to the strong team, Sony! Finally Sony is back where we expect the powerful consumer brand to be. It is growing far faster than the industry - grew 19% from Q2 and is reporting healthy profits out of smartphones once they abandoned the unprofitable Windows nonesense and concentrated on Android. The Sony migration from dumbphones to smartphones is nearly complete. They now command 5% market share which is twice what they had two years ago when it was still the SonyEricsson partnership selling smartphones on all platforms including Symbian. I grade Sony for Q3 as a solid A.

ZTE - 8.0 million smartphones, 4.7% market share - profitable - C

ZTE was doing well but now is stumbling a bit, they kept pace in size from Q2 while the industry grew by 11%, so in reality, ZTE is falling behind. ZTE sells primarily on Android but also in tiny numbers on Windows Phone. They are profitable, I grade them a C

HTC - 7.8 million smartphones, 4.6% market share - profitable - D

HTC is moving seriously backwards in the pack. HTC is actually declining in shipment numbers and fell 11% when the industry grew by 11%. They are reporting almost perennially 'worse' profits per quarter, still profits yes, but ever diminishing. HTC does 3% of its smartphones on Windows Phone and 97% on Android. I grade HTC as a D.

RIM - 7.4 million smartphones, 4.3% market share - loss-making - F

RIM three years ago this time was the second biggest smartphone maker in the world with 21% market share, strong growth, and highly profitable, highly desirable enterprise and consumer smartphones. Then they decided to take their eyes off the ball, launched a tablet, wasted all their marketing effort in that disaster, lost their position in the consumer space and badly stumbled in the enterprise space. One year later, they were at 15% market share, and two years later at 9%. Now, three years after their peak, they are at 4% and falling. RIM sales fell 5% in units from Q2 and they report a loss. This is a performance worth an F. The only silver lining, the new BB10 operating system is ready, the reviews of it are great, and the first new Blackberry 10 smartphones are coming in Q1 of 2013. Expect one more quarter of severe pain at Waterloo, then hopefully we see a turnaround in this former powerhouse puwer smartphone maker.

LG - 7.2 million smartphones, 4.2% market share - profitable - B

Hey, LG is finally back! Life is Good, isn't it? They are finally back from the pain of Windows and at purely Android, are finally back to reporting profits again. LG grew 11% from Q2 which is the same pace as the industry. I grade LG as a B.

LENOVO - 7.0 million smartphones, 4.1% market share - profitable - A

And welcome to the Top 10 for the first time ever for Lenovo of China better known for having bought IBM's personal computer business a few years ago. You never saw a Lenovo branded smartphone, which they cleverly branded as the LePhone? That must mean you don't live in China then. Up to now, LePhones have not been sold in other countries than China, but Lenovo has become the third bestselling smartphone brand of China domestic market already behind only Samsung and Huawei. So yes, those 7.0 million smartphones were all sold just in China in Q3 (the world's biggest smartphone market growing faster than most others, already accounting for 3 out of every 10 smartphones sold globally). Now, Lenovo is aiming for world domination, so they are just launching their first international expansion to India. Lenovos are all powered by Android (interesting choice, isn't it, considering how close Lenovo is/was to Microsoft with Windows haha). Yes, welcome to the Top 10. For strong growth from Q2 and profitable business, I grade Lenovo's first appearance on our Bloodbath blog series, at a full A.

NOKIA - 6.3 million smartphones, 3.7% market share - loss-making - F-

Nokia 21 months ago was the world's biggest smartphone maker so huge, it towered over all rivals, bigger than its next two rivals, combined! More than twice the size of its nearest rival at the time, Apple and four times bigger than Samsung. Nokia's smartphone unit just 21 months ago reported record growth and record profits and a Nokia record jump in profitability. Nokia's smartphone unit was growing faster than Apple's on an annualized basis. Yes, that all was voluntarily thrown away by the new CEO. Today under new CEO Stephen Elop's mismanagement and misguided Windows strategy, the Nokia smartphone unit has tumbled to 10th in the Top 10 and may fall out of the Top 10 by Q4 of 2012. Nokia is literally only one quarter the size of Apple and one ninth the size of Samsung, and Nokia's smartphone unit keeps reporting ever more hideously huge losses. Its Windows Phone based 'Lumia' series sales peaked in Q2 and even those are now in decline, never having captured even 3% market share at its peak. Compare that to Nokia's own Symbian which had literally almost 10 times better market performance, literally, 29% market share, when Elop announced this idiotic strategy. So how is the magnificent Windows Phone doing for Nokia now, in Q3? Surely, after a year of selling that 'wonderful' Microsoft based OS, it must do better than the 'obsolete' Symbian by now? This is Nokia's split of smartphone sales in Q3:

NOKIA SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEM
Nokia smartphones on Symbian/Meego . . . . 54%
Nokia smartphones on Windows Phone . . . . 46%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

Thats pretty pathetic for Windows Phone and Lumia. The new Lumia re-launch is now going on in Q4 with Windows Phone 8 which is supposed to be all that you ever wanted in a smartphone OS - where have we heard that before, again, and again, and again? No, it won't set the world on fire. Windows Phone 8 based smartphones will never even match the peak of the Windows Phone 7 smartphone market share - which was 3% - and these new Lumia smartphones will capture only a fraction of that total. This is a suicidal strategy, every other handset maker who tried Windows as the primary system has died doing it, or bled so much in losses, they abandoned that path. Nokia will be gone unless it shifts now to Android (like every other Windows maker of the past who survived, and far more likely Nokia is already so damaged, they will simply die as a smarpthone maker. As I predicted on 11 February, 2011, the Microsoft 'partnership' will be good for Microsoft but deadly for Nokia, and that in the end, Nokia will become a slave to Microsoft and turn into a low-cost 'box mover' like Dell in personal computers, with tiny margins at best. The glory days of Nokia are far past. And yes, its very likely that the next time I write this quarterly analysis, Nokia will no longer even be listed as a Top 10 maker, because there are hungry fast-growing Chinese Android-powered low-cost smartphone makers - led by Yulong, very hungry to get into the global Top 10. Yulong sells its smartphones under the brand Coolpad. Keep your eyes on them, very possibly will kick Nokia out of the Top 10 as soon as Q4 of 2012. For Nokia's loss-making disasterous Q3 when the industry grew 11% from Q2, Nokia smartphone sales declined .. wait for it .. 38% !!! in just one quarter !!!  This is one of the worst one-quarter performances by any smartphone maker ever seen, unfortunately I can't give them a worse grade than an F-

MOTOROLA (Google) - fell out of Top 10

Yes, just a brief mention, Moto-Moto is soon dead as a Dodo-Dodo.. They fell out of the Top 10 already globally and are shrinking and making losses and Google is firing a lot of their staff globally. They make some nice top-end smartphone models, but in miniscule numbers now.

OPERATING SYSTEMS

So then lets do the same for the operating systems.. And as before, in order of size, first comes Google's own juggernaut, already selling more smartphones and tablets powering this operating system every quarter, than all Windows powered personal computers, tablets and smartphones - combined! Here we go..

ANDROID - 121.2 Million smartphones, 70.7% market share

Android has won the race by now, yes powering 7 out of every 10 smartphone sold globally and more amazingly, over four times more Android smartphones are sold than the second bestselling smartphone OS in the world (iOS on iPhones). There really is no longer a 'race' in this side of the smartphone bloodbath, congratulations Google for winning the biggest battle in tech, ever. And winning it quite decisively, in very short time. Just two years ago, Android was only half the size of Symbian and had just overtaken Apple's iOS and Blackberry for second place. Yes, only a short 27 months ago, in Q2 of 2010, Android was in fourth place among smartphone OS platforms by new sales. Now they command the market and are more than four times bigger than number two and 16 times bigger than Blackberry, and 35 times bigger than Symbian and 37 times bigger than the next 'multi-vendor' OS platform, Microsoft's Windows Phone. Ok, how do those Android manufacturers split up this booty? Here are the market shares internally for Android makers:

ANDROID SMARTPHONES SOLD IN Q3 BY MANUFACTURER
Samsung . . . . . . . . 42%
Huawei . . . . . . . . . . 13%
Sony  . . . . . . . . . . . . 7%
HTC . . . . . . . . . . . . . 6%
LG . . . . . . . . . . . . . . 6%
Lenovo . . . . . . . . . . . 6%
Others . . . . . . . . . . 20% 
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

iOS - 26.9 million smartphones, 15.7% market share

Apple's iOS is doing its steady second place job as the most expensive premium smartphone platform out there, loved by its users with incredible loyalty. The market share growth has slowed to a snail's pace. It was 14% this quarter two years ago, 15% last year this time and now slightly under 16%. I have been calling for Apple to make a global shift, release lower-cost smartphones, and end the one-new-model-per-year cycle. Apple does that with its Macs and iPods and even the iPad has broadened its product range, but with the iPhone, they stick to only one new model per year. They are leaving a lot of money on the table, and perhaps unrecoverable market share, that now is going to Android.

BLACKBERRY - 7.4 million smartphones, 4.3% market share

Yeah, same story here as in the above. Blackberry hurting and have to suffer one more quarter before the new BB10 smartphones arrive. Luckily for RIM, they have enterprise customers as their primary customer segment, who are not as fashion-oriented to run after the latest shiniest device, but make decisions on several-year horizons, and are willing to keep buying some Blackberries for their employees as they await BB10.

bada - 5.2 million smartphones, 3% market share

And Samsung's bada is a very rare animal at most Western markets, perhaps with the exception of France but is doing brisk sales in places like Russia and India. This OS was launched at the same time as the highly visible Windows Phone two years ago, and quietly, targeting low-cost customers, only powered by Samsung brand, where the primary Samsung effort went to Android, this little engine that could has totally bested Microsoft's effort, even where Nokia was brought in to put the best Lumia effort to sell Windows Phone. bada holds a steady 3% market share globally, as Samsung is preparing to do the first launches of its new OS, Tizen, developed with Intel and which is expected to take over or be merged with the bada project. First Tizen smartphones are expected to be out in early 2013 and one of the early prototype handsets is, no surprise here, a port of the Galaxy S3 to Tizen. Tizen also has many global operator/carrier groups supporting it, so if you ever thought what the carriers meant when they said they wanted a new platform to rival Android and iOS, they were not talking about Windows, they were talking about Tizen. So who are those operators supporting Tizen then? Telefonica, Sprint, Vodafone, Orange, NTT DoCoMo, SK Telecom.. Plus manufacturers part of Tizen alliance include Panasonic, NEC and Huawei. Do not dismiss this challenger for next year...

SYMBIAN - 3.4 million smartphones, 2.0% market share

Nokia's Symbian is now really on its last legs. The last new smarpthone we saw on it was the 808 Pureview, and even as Nokia fumbled that launch, not producing enough of the highly popular and highly demanded (really? Yes, so said Nokia, they couldn't match demand and severely underestimated its sales when it launched) super cameraphone. But that time is now over, Symbian sales fell 32% just from Q2 and with only obsolete devices for the Christmas market, expect Symbian sales to plummet now. Obviously all last remaining partners of Symbian had quit this OS and what remains are truly only Nokia branded sales.

WINDOWS PHONE - 3.3 million smartphones, 1.9% market share

Windows Phone had its peak share just hitting 3% one quarter ago, but then Microsoft announced that none of the current phones can be upgrade to Windows Phone 8, and just like all major analysts suggested, the sales would collapse as they did. Windows Phone sales fell 28% in just one quarter (where that announcement came within that quarter, so we have not even seen a full quarter's effect yet). Now Microsoft is rolling out Windows Phone 8, with ever less new handset manufacturers sticking with Microsoft, each doing ever less actual devices and ever less actual markets. Its essentially only Nokia left with Microsoft. This is the split of Windows Phone smartphone sales in Q3:

WINDOWS PHONE SMARTPHONES SOLD IN Q3 BY MANUFACTURER
Nokia . . . . . . . . . . . 88%
Samsung . . . . . . . . . 5%
HTC . . . . . . . . . . . . . 5%
Others . . . . . . . . . . . 2%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

Windows Phone 8 will now include full Skype integration. Do you think that will thrill the carriers/operators into fully supporting WP8 if they were lukewarm to WP7 ? Remember what Nokia's CEO Stephen Elop said about do carriers love Skype? He said, and I quote "feedback from the operators is, that they don't like Skype, of course." Where did Stephen Elop utter that statement? To the Nokia shareholders meeting this Spring! That was after they had seen Lumia with Windows Phone 7 - that did not have Skype pre-installed - and before the carriers had been given the chance to see the new Lumia which comes with Windows Phone 8, fully integrating Skype. And yes, Microsoft brings that full Skype integration to the destktop on Windows 8 etc. A billion new competitors to the main profit engine and revenue source for carriers, voice traffic (especially international voice traffic) and messaging. No wonder the carriers hate Skype. Do not think Windows Phone 8 can outperform Windows Phone 7. The carriers not just hate Skype, they hate Microsoft for owning Skype and funding their biggest threat to the very financial survival of the telecoms operators/carriers. 

MEEGO - in hybernation

I'll just mention briefly MeeGo. It has emerged that Nokia had 3 MeeGo devices ready to sell last year, only relased one for sale, the highly-praised and beloved N9, and manufactured its sister device, the N950, in tiny numbers but didn't sell that. I speculated on this blog, based on my analysis of some of Nokia's strong markets like China and Nokia statements (or lack thereof) about MeeGo and N9 performance, that in the first two quarters when both Lumia series on Windows Phone, and the sole N9 on MeeGo, the MeeGo unit sales actually exceeded all of Windows Phone. Well, that is water under the bridge. We never got a formal word from Nokia on the specific numbers of MeeGo sales. And many thought MeeGo was over, until.. a small start-up in Finland, formed out of ex-Nokia ex-MeeGo people, called Jolla, had launched. Jolla is expected to introduce its first handset still this year, and start to sell smartphones powered my MeeGo (or likely, a further developed version of that operating system) soon. Lets not forget MeeGo. But lets say, it is in hybernation. But if you loved the N9 or N950, just imagine what the next MeeGo device could have been. We may well see that, in the first Jolla device soon...
 
Ok, that should be the analysis of Q3, in the Electric Jamboree. We will return in early February 2013 for the Q4 results and full-year 2012 results as per usual. Also at that time, we can find out who won the reader contest to guess what will be Windows Phone market share now this Q4 of 2012. If you wanted earlier numbers, Q2 of 2012 is here. Meanwhile, enjoy the stats, and remember all this data is free to be shared

(also for those who may want to order my statistical volume on the handset industry, the ebook, TomiAhonen Phone Book 2012 - please note, that due to Hurricane Sandy, my webhost on Manhattan's 14th street is currently still fighting the aftermath of the flood, so my ebusiness site, and my primary website, and my email are all currently not operational - if you desperately want the Phone Book 2012, please send me an email to my temporary email address ttahonen at yahoo dot com and put in your email header 'Phone Book' and I'll get back to you with how to order, etc. I hope to get the website and ebooks and email all back soon)
 

Comments

[John Waclawsky]

Status on Microsoft's decline:
http://semiaccurate.com/2012/11/14/microsoft-has-failed/

Nokia should read this.

[LeeBase]

Baron95 has participated on this forum for years, long before Windows Phone was at issue. His analysis has been spot on. I know the fall of Nokia must be hard for long time fans, and humiliating to see them capitulate and adopt the Windows Phone platform for those that hate Msft.

[LeeBase]

Those "free" iPhone 4's are only "free" on contract. They cost $450, hardly in the low ball cheap Android price range. As they are two years old, the cost to manufacture them has come down, thus Apple still makes a decent margin selling them.

What you don't see, and won't see, is Apple selling products for little or no margin in order to gain marketshare.

Tomi is right, that if Apple is to ever be the top smartphone volume unit leader, they MUST produce low end, low margin phones to compete with the likes of Huwai and ZTE.

Tomi is simply wrong in thinking Apple has any interest in doing so.

The lowly iPod Shuffle is not the product that proves his point. It costs far more than bottom end mp3 players, and it wasn't created until long after the decline of iPod's and the rise of music phones.

Out of all mp3 players that have no screen, the iPod Shuffle is much more expensive. The iPod Nano is likewise expensive for it's niche, as are all remaining iPods.

The closest thing Apple has to a low cost product is the Apple Tv, a hobby product.

[Baron95]

These comments that Google will win the smartphone war is very funny. So far, Google has spent about $3B acquiring and developing Android, it has spent $12B acquiring Motorola to get patents to defend Android, and an unknown amount marketing Android, including launching the Nexus line to show pure Android. So lets say $20B invested.

And Google has yet to make a cent in profit from Android.

Yes, Google has indirect profit from selling ads into Android devices. But would it be selling less ads if it had not developed Android? Hard to say. They clearly pissed off Apple to the point that they lost the ability to sell ads into the native iOS Maps app. They similarly got crowded out of Nokia devices. And Amazon devices. So it can even be argued that Android is causing Google to sell less mobile ads.

Yes, it it may work out for Google long term. Or it may not. Hard to say. Right now, Google is like China selling nuclear technology to rogue nations so they can challenge the West (Apple). It is not clear that it ultimately benefits China to do so. But it clearly benefited the likes of Pakistan (Samsung).

Now. What is the future for Android licensees. Lets take a look at HTC. They had to agreed to pay MIcrosoft in the $10/device. And now settled with Apple, likely for another $10/device. They have to pay Qualcomm $5-$10/device. (the royalties are actually percentages on sale price in some cases). So, ultimately, ZTE, Lenovo, Samsung, like HTC, once they get big enough and go through the court cases, have to start paying the US West Coast tax on every device. And on top of that, they have to fight against one another almost exclusively on price.

So - good luck being profitable in that world. Maybe Samsung who ran away on volumes can do it. But no one else can and likely even Samsung will suffer once HTC, Nokia, RIM, Moto recover from some of their stumbles.

I can tell you one thing. I would not want to be an investor in any company whose primary product is churning out Android phones.

[Earendil Star]

John, thanks for your insight.

An other interesting read is the following: http://semiaccurate.com/2011/03/14/microsoft-gutted-nokia-and-left-them-without-a-chance/

It provides a lots of insight in what must have gone on between MS and Nokia.

And how this could happen under the oversight of Jorma Olilla is unfathomable. Blackmailed? Who knows.

But, sad stories aside, what I see is the usual trolls trying to cover hard facts (Android supremacy) with utter nonsense.

You know what? Who cares. Given the current speed of events, we won't be hearing from them much longer.

Just wait and see what happens when MS' money dries out...!

[Tester]

Do you really trust that bullshit site? I prefer to get my information from less biased sources.

I clicked through 5 or 6 articles there and it's all anti-Windows rants. Not what I'd call informative. There may be a grain of truth buried under all that hate but I don't feel like digging it out from all the waste.

Oh, and concerning Nokia, behold the arrogance they displayed years ago and which undoubtedly caused in no small part their eventual demise:

http://www.engadget.com/2007/11/05/symbian-nokia-microsoft-and-apple-downplay-android-relevance/

[bjarneh]

Baron95> Yes, it it may work out for Google long term. Or it may not. Hard to say.

70% market share and rising, it really is hard to say..

@Tester, @Earendil Star

nice articles!

[LeeBase]

70% market share on a product they give away. A product they have spent some $20 Billion on in order to give away. And to spend all that money to be safe from depending on Msft, Nokia or Apple in mobile, only to end up beholden to Samsung.

Yes, folks, Android is far from having been proven to be a winner for Google

[John Waclawsky]

@Earendil Star Don't you just love it when the trolls gang up and try support each other to defend/sell/shill etc. a utterly crappy MS windows phone. Its almost funny to read the nonsense except it is a pure waste of time. Look back over the years, every new Microsoft iteration is going to magically change the world. How many times have we heard that total nonsense with Kin, Zune, Win Mobile, WP 6.6 7, 7.5 8, ...10 I just laugh at these people LOL

Here's an insightful read that would be really powerful if someone updated it

http://www.roughlydrafted.com/RD/Q4.06/2E6D9BB2-FE1B-4556-8389-67BD581FBCCC.html

[notzed]

RyanZA: "While it ultimately feels a bit unfortunate that the C64 (and symbian, blackberry, etc) went out of production, it was still a really good thing long term. For devs to make really good stuff, the less platforms the better, since each platform means more code, more bugs, different UI, etc etc."

Umm, so somehow monopolies are now good economics are they?

I consider the whole of the 90's to be a complete lost decade in computing terms - it wasn't until the internet came along that intel and microsoft's stranglehold on suppressive computing was challenged. And it lead to an explosion of ideas and money making opportunities which were not possible in that oppressive environment.

Having a single system also means products are limited to the capabilities of that single system and are subject to the whims of whomever controls it. The reason an Amiga or even a C64 could do multimedia much better than a PC of the corresponding era was because it had real-time features a modern PC still lacks.

Diversity is good, it allows experimentation and the exploration of niches - and there are plenty of programmers to fill every niche possible.

Monocultures are also too fragile, they turn into expensive exercises in keeping out the competition that harms everyone.

Android may not suffer from this so much because it is free and open - we already have multiple customised versions from multiple vendors - and even individual developers. Something totally unthinkable with any version of microsoft or apple os's.

This type of thing (well, linux really, together with hardware advances) is allowing a huge proliferation of new and innovative devices because the platform has finally been commoditised. Two years in it is already a much more interesting decade than the 90s was - lets just hope the patent wars don't wreck it.

[Duke]

Tester the troll ....kinda rolls off your tongue. LOL At a minimum he and LeeBase seem to be Microsoft apologists

[futureGEN-Z]

@Duke
quote "Tester the troll ....kinda rolls off your tongue. LOL At a minimum he and LeeBase seem to be Microsoft apologists"

I think only astrosurfer will have oppinion skewed toward Microsoft.

For me,
Screw Microsoft, I hope microsoft bankrupt for all the things they did (Novel, DR-DOS, OS/2, Sendo, Nokia). Microsoft Era = Dark Ages of competition... The bankrupt of Microsoft will lead humanity into new world/technology order.

And I really hope android win, because with android/opensource competition is on a new level.

Some company... for example, samsung could found a bug in android and fix it without the need of google to fix it (microsoft always took a long time to fix bug, glad their loosing the fight, microsoft = bad).

All company that use Android can compete, yet contributing at the same time... The power of open source is THE FUTURE.... The power of MicrosoftOS = past.

[foo]

@Baron95 "These comments that Google will win the smartphone war is very funny."
@LeeBase "70% market share on a product they give away."

What you apparently miss is the fact that Android is bigger than Google.

Android is open source, it can survive if Google looses interest, or even if Google falls. Can you say the same about the relationship of manufacturers with Windows Phone? No, they are hostage of Microsoft. When Microsoft says "jump" they (particularly Nokia) ask "how high". Android manufacturers can simply fork the development as Amazon did. WHY WOULD A MANUFACTURER PREFER WINDOWS PHONE TO ANDROID?

That's the reason why Android is quickly becoming the Windows of mobile.

[foo]

@notzed "Umm, so somehow monopolies are now good economics are they?"

It is better to have an open source monopoly, where everyone has fork, than a closed one.

Amazon forked Android. Anyone can do that.

"Diversity is good, it allows experimentation and the exploration of niches - and there are plenty of programmers to fill every niche possible."

Android allows diversity; Windows Phone doesn't. That's the reason why we see a flood of Android devices, occupying every niche imaginable. Some of them flop, some of them succeed. How can Microsoft mimic that?

Microsoft is trying to mimic Apple with a common standard for manufacturers. That's great for Microsoft, but terrible for the manufacturers, because there is so little space for differentiation.

When a company can't provide cost advantage nor differentiation, it is doomed to become a niche player.

Recommended read: http://www.quickmba.com/strategy/competitive-advantage/

[RyanZA]

@notzed Microsoft having an economic monopoly was a very bad thing, since they could force people to use their software, etc. Platforms having a monopoly has pros and cons

Pros of platform monopoly:
1) Lots of developers since users can buy some software and know it will run
2) Well tested software since popular software on a monopoly platform is going to be hugely used/tested
3) Room for niche software - you can't make software targeted at a small customer base and then only be able to serve a small number of customers on a small platform

Cons of closed platform monopoly (windows, apple):
1) Platform developer can outmaneuver any competitors trying to use their platform
2) Slow innovation since enhancements to the platform are driven by only 1 company
3) Platform acts as a 'tax' - everyone has to pay the platform owner a tax even if they aren't using the platform fully (having to buy windows just to copy .dlls to your linux box to run some software, etc)
...) Tons more..

You could argue either way for pros-cons of the above. Some people think Windows was really good and helped computers grow fast, at least at the start. Personally I think it was a really bad thing though, mostly because of how MS (illegally) abused the platform monopoly...

However, Android is an open monopoly and none of those cons apply. So you get only the pros. Anybody can develop a brand new platform that can still run Android apps, etc, since they can just embed the open source dalvik into their OS. (Blackberry is heading this route)
I'm running MIUI on my Samsung phone currently, and it has very nice enhancements to Android such as blocking app permissions, ability to download full themes and customize the phone, etc.

So yeah, an open platform monopoly really is a good thing.

[bjarneh]

LeeBase> 70% market share on a product they give away.
LeeBase> Yes, folks, Android is far from having been proven to be a winner for Google.

They also "give away" a web-search-thing, and email. They just keep on giving, never asking for anything in return, total saints!

Google are advertisers, income does not come from us, WE are their product.

[LeeBase]

@bjarneh - you are right about google. The question is -- was Android the wisest move for Google to monetize mobile. Consider that Google makes most all of it's money from WEB search, on a platform (Windows) that Google doesn't control. Google could have stayed partnered with Apple, and made all it's mobile advertising money without needing to spend $20 billion to develop and protect Android.

But they did so to control their destiny....initially worried about Msft dominating mobile and kicking them off the platform, and then worried that Apple or anybody else could. However, what have they ended up with? Samsung. Samsung so totally dominates the Android market that Google is just as vulnerable of being kicked off as they were from Msft or Apple.

Look at what Amazon did on tablets. Took the Android OS, thank you very much, and stripped out all the Google services and replaced them with Amazon ones. All that investment by Google, a free gift to Amazon. Samsung could do the same thing.

Baron's point wasn't that Android would fail, but that Google has failed to make any money with Android and has spent SO tens of billions developing and protecting it, that Google may well NEVER make money on Android.

[Tester]

If Google had wanted to make money off Android it wouldn't be an open source platform.

It's also obvious that they didn't need Android to promote their services.

So what did they need it for? The most likely answer: To prevent Msft and Apple from dominating yet another market segment.

Do they have to fear Samsung? I doubt it. Samsung's revenues come from selling hardware mostly. They would ultimately risk more by walling themselves off.

Amazon is a bad comparison. Their main business is to sell content - and to promote that business they have to shut out Google and its services.

[RyanZA]

@LeeBase

Problem for Samsung is that they need to have Google Apps / Google Market. To get those, they must play by Google's rules. Sure they can go ahead and make their own store and maps and everything, but Samsung has tried to do that before and failed (and even Apple has failed on the mapping side...). So Samsung can't easily push Google out of the picture without heavily annoying customers and pushing them to competitors. LG has hardware just as good as Samsung's. Samsung is thriving because their product is the best currently. If they drop Google, they no longer have the best product.

Long term they may need to drop Google, but this 'long term' is 5+ years and completely out of anybodies ability to predict right now...

[darwinphish]

Tomi:

Do you have any national or regional numbers for smartphone sales and platform adoption? I ask because I believe the world wide numbers are hiding what is happening in specific markets. For example, I believe China and India together represent over 1/3rd of the smartphone market and in those countries Android absolutely dominates, with some recent reports stating over 90% of sales. Obviously if China and India so heavily favour Android then Android's dominance in other countries/regions is less than the worldwide average. I know, for example, Android does not out sell iOS 2-to-1 in the US.

All that said, I have had a hard time finding exact numbers for China and India so I am hesitant to draw any strong conclusions. If you have and can share any of this data it would be greatly appreciated.

[LeeBase]

Google spends billions upon billions and doesn't expect to make money from it? That's some charity they have going.

Amazon isn't a comparison, it's a reality. Monetizing open source is risky business. Android isn't "open" in the traditional sense of open source. No one but Google develops Android, it is not a community process like linux et. al.

Google controls, or attempts to control, Android by making essential pieces NOT open: Google Maps, Google Play (the Android Store) and the like. Sure, you can wait for Google to release the source code, and then fork Android, but only at the cost of not having the very services people look to Android for.

However, ambitious and well financed companies can create their own services...as Amazon has done. The number one selling Android tablet is the Kindle Fire...and Google doesn't get a penny in advertising revenue as Amazon replaced all of the Google money making services and replaced them with Amazon services.

Ambitious...well financed company...sounds like Samsung to me. We can see in both the Bada OS and the apps Samsung has developed for it's Galaxy Note Android devices that Samsung is not seeing itself as merely a hardware provider.

Everyone is looking at Apple's results and seeing the power of integrating software and hardware. Samsung who copies so blatantly from Apple already, even to creating stores that are exact copies of Apple stores...complete with blue shirted employes and the like....can surely not have missed the way Apple is printing money in mobile.

It's entirely likely that Samsung will fork Android and take Google off. Samsung HAS to be worried that Google bought Motorola. It didn't keep Samsung from losing a billion dollar verdict against Apple. So Google will be preparing to be betrayed by Samsung as Samsung worries about being betrayed by Google. They HAVE to, it would be bad business to NOT be making contingency plans.

To date Samsung is the company to have benefitted most from Android. Samsung is very ambitious, has resources like few other companies. If Google ventured into Android for fear of Msft and then Apple, there is no way Google is failing to fear Samsung.

[bjarneh]

@LeeBase

true, they can be ripped off, but not much.. this stuff is GPL, if it was BSD; it would be plain madness.

Samsungs alternative (Bada/Tizen or whatever it's called) is also Linux based, as we know it's usually just a matter of time before stuff that works on one Linux platform, works on all other Linux platforms as well. Even the tiny Meego community has started building a compatibility layer for Android apps (with no funding):

http://wiki.maemo.org/Apkenv/Game_Compatibility

for now it's mostly Angry Birds, but this is destined to change. If you had some money to put behind it, it would be a matter of time, before Android apps ran fine on Meego/Tizen/Bada etc. and vice versa.

Google have already made their money back; they are now in so many pockets, and have access to location/email etc. that this is paid for ages ago. This is the real revenue, when Google knew nothing about users, their ads was worth 5 cents, now it's 5 dollars. The value of all that information can easily be seen by Google's attempts at buying/building facebook alternatives (orkut/googleplus).

A fishing-pole ad is pretty useless to someone who never fishes, but when you only show it to people who live places where they do a lot of fishing, and you know the person has called/emailed fishing-gear-stores etc, it's money..

[RyanZA]

@bjarneh

No, it's not GPL. It is Apache (same as BSD). Samsung can very easily strip out all Google stuff and replace it all with their own stuff. Nothing stops them at all if they want to do that.

@LeeBase

But Samsung is definitely not going to do this in the short term. Feel free to speculate on it if you want, but it is very much guaranteed that Samsung will be sticking with Google Apps for at least the next 5 years. (For Non-China markets only, though - for China, they may very well strip out everything Google if the cost of Google services exceeds the cost of doing that customization.)
Customers buying Android want all of their existing paid apps to carry across. They want their gmail to carry across. People would move to LG in a heartbeat to get access to Google services at present.

[Tomi T Ahonen]

Hi gang

Nice discussion, keep it going.

First to regular visitors, I have hoped I would not need to make this comment, but here goes.. obviously its no longer possible to even try to respond to all comments. I love it that we get so many commments so often on the blog, but apparently the popularity of this blog is now so big, we get often so many comments, with what time I have, I won't have the chance to respond to everybody. I will still do my best. Trust me, I read every comment and take it in.

I will comment now more generally on a few themes that came out. Early in the comments was the debate about size of reach vs how easy is it to make money on the platform. Baron95 gave an often-repeated line by those who don't have the biggest platform, that their system allows easier chances to make money. Yes, that will be relevant to some, and even a winning argument to few, but as many pointed out in the comments like bjarneh - the most common interest, by developers, is whose platform reaches the widest. I trust even you Baron95 will begrudgingly admit, that it is often the clinching argument at developers - whatever your personal preference of what it SHOULD be might be - and that the biggest platform over time always gets the most developers. That is what history has shown, that makes economic commercial sense. But it does not mean, that for some the argument is not valid, where can we make easiest money or most money.

And with that, I would add, Blackberry is the lest not-dead of the small platforms, for that very reason, the big corporations are very reluctant to throw out their Blackberry OS investment, they take long time to decide and the platform is thus far more viable and can sustain short-term problems, and still survive. A consumer-oriented platform, if hit by sudden loss in popularity (witness Symbian, Palm) cannot recover..

Tomi Ahonen :-)

[LeeBase]

This is all talk about the risks involved. How "Android having 75% marketshare" doesn't translate into "Google is winning"...necessarily. Clearly, Samsung is winning at the moment, but that's not necessarily the same thing as Google is winning.

For Google, it would be far better to see a variety of manufacturers somewhat evenly splitting the Android market. As it is, they find themselves in the same "beholden" position they were trying to get out of by acquiring Android in the first place.

And Google most assuredly NOT gotten it's investment back yet. Google and Facebook are both struggling to monetize mobile....all the while mobile canabalizes their profitable web businesses.

Folks talk about maps as if the default map app is the only one that matters. The Apple map fiasco didn't bother me because I use TeleNav on my iPhone. It would be NICE if the Apple directions were better, and they'll get better, but in the mean time there are Tom Tom apps, Garmin Apps, oodles of choices.

Nokia is making a play with Here, to take it's mapping apps everywhere. Samsung has a variety of choices it could go to to replace Google maps. Everything that Samsung is doing to build up it's Bada/Tizen ecosystems....it's Galaxy Note apps...it's skin on Android....are all efforts that can build for Samsung it's own ecosystem freeing it from Google.

I'm not predicting it will happen in the short term, but clearly the right moves are being made to make it possible. And since that's true, Google HAS to be making preparations of it's own. How long will they let Motorola flounder? They bought Motorola for patent protection but what followed? A billion dollar verdict against Samsung and a 10 year cross licensing deal between HTC and Apple.