So as the big shock and analysis related to Nokia's collapse subside, we should return to our regularly scheduled feature, the Bloodbath, now in its Year 4: Smartphones Galore. We saw another death in the smartphone bloodbath, Nokia is now gone (ok, going out) to be swallowed by the death star of mobile handset wars, Microsoft. Lets see what else is happening.
BLACKBERRY QUARTERLY RESULTS
Well its another death imminent on the battlefield. Once the world's second largest smartphone maker - yes, Blackberry was, as recently as Q2 of 2010, the world's second largest smartphone maker and in terms of measurement by market share, a year earlier Q3 of 2009, Blackberry ie RIM had 21% market share of the global smartphone industry. The iconic business and messaging phone maker was highly profitable and celebrated in the US business papers at the time as the fastest-growing company ever. That turned into a collapse. Not due to the iPhone, as legend and myth would have it - when Apple grew strongly (years 2007 to 2010) Blackberry also grew. When Blackberry fell (from 2011 to 2013) Apple's market share has been flat and even peaked and has been at a very slight decline (on an annual basis) in the past few quarters. RIM ie Blackberry did not die by the iPhone. Blackberry died to Android and Samsung and low-cost providers. RIM lost the ball by attempting to launch tablets against Apple (and failed miserably in that) and that drained its deep pockets and caused mass layoffs and delays to all its development, which all hurt its cash-cow, the Blackberry. The promise of the future, the Blackberry 10 operating system arrived far too late and now Blackberry reported its results.
Blackberry Q3 results. Sales 3.7 million smartphones - down 46% from one quarter before and Blackberry preliminary market share is 1.5%. Blackberry very likely remains out of the Top 10, as HTC is expected to report bad results, but this was a record-setting failing quarter in Waterloo, its highly unlikely for HTC to report as bad numbers. And yes, Blackberry reports deep losses this past quarter, so those few smartphones that did find a buyer, were bribed to take the devices sold at deep losses. In other news, Blackberry management is trying to sell the company, or do a buy-out, and a bid is out there, attempting to collect investors to buy out the company for a valuation of 4.7 Billion dollars. These results will not help in that venture, if that happens, very likely the final Blackberry purchase price will be even less.
THE OBITUARY PAGES
So, going to the time before the iPhone, the 5 largest smartphone makers of 2006 in order of their size, were Nokia, RIM/Blackberry, Motorola, Palm and SonyEricsson. So far the Bloodbath has claimed 3.5 victims out of that bunch of 5 with Nokia, Motorola, Palm and Ericsson out of SonyEricsson already out of the smartphone wars as independent brands. Blackberry is on the ropes, but Sony after ridding itself o Ericsson, has managed to turn the smartphone business into a profit and has today nearly the same market share (4%) as it had then (as SonyEricsson), seven years ago (5%). So what else is new?
CHINA MARKET DATA - AUGUST
We have some interesting market data from China, the world's largest smartphone market as well as the world's largest overall handset market. China has now passed the migration rate of the USA as well, in terms of new handset sales with 91% of new phones sold in China now being smartphones according to Counterpoint. They also give a view to the Chinese smartphone market for the month of August which they say is: 15% Samsung, 11% Lenovo, 11% Coolpad (Yulong), 7% ZTE, 6% Huawei, 3% Nokia and 1% Apple. 45% of China's market is split by the approx 1,000 local domestic brands that almost all do Android.
Note how much that differs from for example Kantar numbers that only measure 'Úrban China' and have Apple at 20.8% market share. Kantar's numbers are for the past 3 months ending August, so we know the Apple sales are falling always up to the launch of the new iPhone models, so yes, if its averaging 21% for 3 months, it will be more than that in June and less than that in August, but still, this puts the Kantar China number into significant context. What matters in China is reach and distribution for the whole massive nation of 1.3 Billion people, not just sales in the several big megacities of 30 million people each.
A REVISED BURNING PLATFORMS MEMO
I know I said we're done with Nokia, but I have to mention this. Nick Kolakowski over at Slashdot has done a great short revisit to the infamous Elop memo of Burning Platforms, that started the collapse of Nokia's smartphone business. I warmly recommend reading the short bittersweet blog article. In the Elop saga itself, he's also stuck in a divorce, his wife wants half of the 25 million dollars Elop grabbed from Nokia after wrecking its main business. But that gets onto the side of soap opera, I won''t comment further on the divorce side. What else is happenin' in smartphones?
SAMSUNG GALAXY GEAR AND NOTE
I think I hadn't yet mentioned this on the blog, did I? Samsung announced its s-watch, the Galaxy Gear. If Apple also launch an iWatch later this year, this could be supremely opportune timing by Sammy. If its the only smart watch out there, then I think it will fizzle rather fast.
Meanwhile on the 'my screen's larger than your screen' wars, Samsung's Note series has passed cumulatively 40 million shipments since their launch. Quite impressive and clearly there is a big market demand for bigger screens. This all begs the question, why didn't Apple use this year's split in the product line, to introduce a larger screen for the new flagship model, the iPhone 5S. I think that was a mistake by Apple (but no doubt, the 5S will sell in record numbers nonetheless, however, if the market just for Sammy's Note is 40 million and counting, Apple should have not abandoned that, the top end, of the screen wars to Samsung)
Return of the Panasonic? Panasonic is launching three Android based smartphones in India, its first big international expansion for many years. Panasonic could follow Sony's (and Samsung's) footsteps of expanding its consumer electronics brand into the smartphone space in various international markets, if the India venture turns into a nice success. India's domestic smartphone market is very hot now, more than doubling annually and very welcoming of major international brands amidst its various domestic handset brands like Carbonn and Micromax, especially as past giants of the India smartphone market, Nokia and Blackberry are doing their death-dances. Oh, and Nokia has a long-standing legal dispute with its tax situation in India, no doubt hurting the brand there.
Talking about India, Lenovo was there already selling its LePhone and now is expanding its Android based smartphone product line there adding four new models - which all are dual-SIM Android smartphones at the low end of the price scale.
Is also expanding, has entered the Israeli smartphone market. Granted, thats a tiny country of only 7 million people but still, Huawei still expanding. On a more meaningful development, Huawei promises to double its sales in Nigeria, Africa's largest handset market and rapidly growing smartphone market where Blackberry used to be number 1 and Nokia number 2. I'd be very enthusiastic about this announcement, until we remember last year's bold promises by Huawei about how much they intended to sell in China, and how flat they fell. Huawei may be one player subscribing to that Microsoft 'smoke and mirrors' tactic of promising astonishing numbers at every turn. Lets wait and see.
HTC is again expected to report declining sales. HTC doesn't report unit numbers only the revenue number in sales, but yes, the news seems to be bad also from Taiwan's biggest smartphone brand. There was some rumors that HTC might be sold again, this time Huawei said they are not interested.
The Chinese maker which is selling its Firefox based smartphones in Europe, is promising to bring the Firefox OS also to the USA next year (once again the pattern holds, that all new developments come to the US market last in smartphones).
Sony has just issued guidance that its fiscal year 2014 sales of smartphones will grow by 55% and hit 65 million units, up from 42 million it expects to ship in fiscal 2013. Sony's fiscal year ends in calendar Q1 ie the January-March quarter, so for this year Sony's performance is about 40 million smarpthones. That is good growth, solid performance and as Sony's handset unit is profitable, this is all good news. But how good is 40 million for 2013? Not good enough, I am afraid. Momentarily Sony was the 3rd biggest smartphone maker but now if Sony ends this year selling about 40 million, that would put it behind not just the two giants, Samsung and Apple, but back in the pack of the dwarfs - behind Huawei, Lenovo, LG and ZTE - which are all currently performing to a level of between 42 million and 48 million sales for year 2013. So Sony might end the year in 7th ranking, racing against the rapidly growing Yulong/Coolpad of China, which could also hit roughly 40 million smartphone sales this year.
Incidentially, the really cool news from Sony is the Carl Zeiss branded removable and 'universal' cameraphone lens accessory they are shortly going to start to sell. I want one of those! It should work with all smartphones as a booster to your camera, with real optical zoom etc.
The next Chinese brand to keep your eyes on is Xiaomi, it has passed 10 million cumulative smartphone shipments and may enter into the Top 10 brands soon as the next Chinese brand there (after Huawei, ZTE, Lenovo and Coolpad/Yulong)
So the largest Finnish handset maker now is Jolla, the start-up based on the departing staff from the MeeGo and Maemo projects around Linux software at Nokia. Jolla will use the Sailfish OS, a further development of where the MeeGo OS had gotten, and Sailfish will allow Android apps to be used, giving Jolla an interesting play, being kind of compatible with Android while not being Android. The first device pre-ordering stage is past, and more complete specs have been released by Jolla - its a high-range but not flagship level device, 8mp camera, 4.5 inch screen, a Quad-core CPU, 16GB of storage and offering expansion via microSD slot. The look and feel is similar to the Nokia N9 that ran MeeGo, and thus obviously also similar in apperance to the top-end Nokia Lumia series which obviously took its familiar appearance from the N9. Jolla devices to ship in early 2014 and will have a price tag of 400 Euros without contract.
Thats about all for now, and we are entering the quarterly results period for Q3 results, so this month should see plenty of news in that space.