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« Preview of Full Year 2013 Smartphone Final Market Shares - We know a lot by now | Main | There Are Some Early AR Numbers - All Looking VERY Good for Augmented Reality »

January 04, 2014

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AndThisWillBeToo

Whoa. You actually wrote more about Nokia past than actual year 2014.

Antoine RJ Wright

You mention that MS should be a 3rd platform/ecosystem in play here. But, I'm not so sure. MS will continue to have influence because of how they are playing across channels (TV, enterprise PC, etc.), but until they make themselves compelling in mobile/tablet, I don't know that they will be more than a bird on the back of an elephant (Samsung).

I'm seeing that the 3rd ecosystem is Android minus Google. From a high/profitable end, Amazon. Chinese, Brazilian, and sub-Sarahan Africian groups at the bottom end and moving up. What Jolla is doing in this respect is smart; leverage the ecosystem, but not its enabler. That's kind of the route. And when the bottom matures - probably following a model like Amazon's (get to a 3rd iteration and make it your own), then we'll see that #3 player as Android-minus-Google take shape.

Am still waiting for someone to point out how fast mobile will plateau (market saturation is such a low-heard topic). Makers will be effected by this - less Apple than others. And service providers won't adjust fast enough and so there's going to be more consolidation. I don't have numbers to support this. Just kind of a feeling I have. A bloodbath of a larger sort might ensue with such conditions.

zvetamt

So what's your take on 10%+ market share of WP in Q4 2013 in EU? Is that cherry picking? Do you thik WP has more of a future in EU than elsewhere?

Also, what do you think brought down HTC? It used to hava e bigger market share, right?

KPOM

Tomi,

The quick reaction of the rest of the market, starting with Samsung and then moving to Qualcomm, to Apple's completely unexpected move to 64-bit ARM v8 shows that you are wrong when you say that Apple will be a tech laggard, and that Samsung doesn't see it as a threat. The rest of the world was planning to move to 64-bit ARM v8... in late 2015, maybe. Now they'll be on 64-bit ARM v8 by the end of H1-14.

Samsung may sell 3 phones for every 1 Apple does, but it makes most of its profits in the same segment where Apple makes its profits. They are absolutely concerned about what Apple does. The brand new Note 3 is outsold by the iPhone 5c (essentially a rebadged 2012 phone). Rumor is also that Samsung is pushing the S5 release up in order to stem the tide.

Plus, if Apple does enter the big phone market in 2014 (or 2015), it threatens Samsung's margins, as well. No, no one is going to be challenging Samsung in market share, and in your narrow market-share-trumps-all view of the world, Samsung is likely to be on top for a while. They also are likely to be the only profitable Android OEM for a while, but as you point out, they will face more competition from the Chinese manufacturers at the low end. And Apple and maybe even Google/Moto and Amazon will provide competition at the high end.

Meanwhile, you do seem to have missed that Windows Phone actually is getting some traction in Europe and emerging markets.

AndThisWillBeToo

@KPOM
"Windows Phone actually is getting some traction in Europe and emerging markets."

Nope, it's just Microsoft throwing in so much money that all the operators commit a suicide and forget their Skype boycott.
/sarcasm

Saksalainen

Thanks Tomi for a good initial 2014 forecast! People are getting bored by the current offering of mobile operatings systems! There is only black or white and their closed "wall-gardens" (I don't count Windows Phone since it's not any real offering) and this has gone quite long ... too long that 2014 will be the year of the bursting pipe. Business students learn from the "Blue Ocean Strategy" which in short describes a situation of an uncontested market situation and this cannot consist in an very much growing market such as mobile (and yeah Apple is drifting to it's niche... so basically only Android left at the moment). Also the winning Chinese vendors will figure out that there is no differentiation using Android. Real innovation has been asked and the last years of mobile world congress have been extremly boring. At some point, I believe during 2014, the market will turn into "Red Ocean". Think about it, Cyanogenmod for Android has been extremely popular to make Android a bit more accessible and flexible but it's not a way to really differentiate.

Saksalainen

As you mentioned Tizen will make a big splash but also Firefox-OS, Ubuntu touch and for sure Sailfish OS will be part of the big fresh steam. It's great to break up this stigma of the OS or the "I belong to this or that club" - it's essential to support Android. Here it comes: e.g. in SailfishOS (Jolla) you just can use Android apps or native apps (the native ones not all yet in the store which btw. have exceed the amount of apps from Windows phone contender). Most people (currently Europeans) which had pre-ordered the Jolla have anyway installed unofficially the PlaySore. Another thing to think about, this market is also steered by the geeks and youngsters but not necessary the ordinary or the advertising industry which currently believes in this black and white thingy because it's convenient to print that PlayStore or AppStore stickers. The youngsters with surely more than one phone in the pocket are less distracted by the advertising industry but more well connected via social media. I fully agree with one thing: communities dominate brands -some of the mobile contenders do have pretty well organized communities!

KPOM

I think Samsung is more likely to go the forked Android route (at least for some of their product line) than devote significant resources to Tizen, unless somehow they are able to port all of their Samsung APIs over to Tizen seamlessly. They are promoting Galaxy and have never really promoted "Android," but being able to rely on Google to do the heavy lifting in OS development has benefited the company.

Christian

Tomi,

I really do appreciate your analyses of the smartphone market. You made a great job indeed calling out the disgrace of the destruction of Nokia by Elop. Its dire consequences -- Especially in Europe. The quick and smart response of Google+Samsung with Android+Galaxy. Thanks a lot for all this -- Including for your piece on aircraft carriers!

But I am confused, to say the least, by your views of Apple, as they fall short to match the fine analysis I am used to read from you.

Like when you write "Apple will do the iThing. They take the cream off the top, offering less than supreme devices, with some very Apple-ish ooh-aah single feature every few years, but lagging in most tech specs from the leaders. But providing uber-desirable sexy iconic iGadgets that every iGeek has to iHave." This picture might have been true when Microostf had 98% of the PC market and the Mac was getting from 2.0 to 2.1 % after several "best years ever" for Apple. A fair number of Apple customer at the time were rabid geeks (and to tell the truth I was one of them). But this was last century, pre-iPod era. This was 1996-2001. But since 2007, I am amazed how quickly and to what extent Apple became mainstream.

In my environment, those that appreciate the most iOS products do not qualify as geeks by any definition. My father, 78, enjoys his iPad. So are my in-laws, 78 and 75, with their iPhone and iPad. And I can go on : 58 and iPad+iPhone, 62 iPad+iPhone, 45 with iPad, 44 with iPhone, etc. Believe me, all those people spend their hard-earned cash or pension with lots of caution. And BTW: all of them but one have cheap PC at their home computer.

If a so called "cult" goes from 1% of followers to 30% in a given population, then it makes no sense anymore to call it a cult and dismiss their members as fools. There must be some intrinsic appeal, some real value, to what is offered. I am puzzled that you seem to fail to see this.

Regards.

Saksalainen

@Christian I can understand your comment about Apples being mainstream! This is exactly the thing that there's a move away from current mainstream. I have also an Ipad at home which I got for free. I'm not willing or wanting to use it because it's rather old and unpleasant to use. It has a home button which annoyes me. Android has it too and that's also annoying
. The most annoying on the Apple-over-mainstreamed I-world is the huge amount of advertisememt especially in free apps. It this productive or entertaining? That's also part of the Google-world, unfortunately. Sorry but I'm not retired, have kids, lack of time and hopefully 30 more years to work before the pension. Apple products aren't for me! I like the speed of things, gestures which make sence and I believe therefore the not yet mainstreamed of Ubuntu touch, Tizen or SailfishOS will will rule the futurefuture! No more home buttons!

eduardo

Welcome back, Tomi.

Is it true you spent your vacation working in the pit crew of an F1 team?

More on topic: Ben Thompson says both Nokia and Blackberry should have gone with Android:

http://stratechery.com/2013/blackberry-and-nokias-fundamental-failing/

Roo44

"...will probably spread the price difference between flagship model (current 5C) and discount models (5S)..."

Should read?; flagship model (5s) and discount models (5c)..."

RottenApple

@KPOM:

"I think Samsung is more likely to go the forked Android route (at least for some of their product line)"


As I understand Google's terms, that's not possible. It's either playing along with Google or lose all access to Google services. Samsung sure can't afford that. If they want to do another product line without Google they have to use a different OS.

Vikram

Tizen has no chance to succeed in terms of making money for Samsung. The reason is that Google has no need to support it. Put it this way, Tizen requires Google to make it succeed i.e. with Gmail, Google Maps and other Google services. What rationale does Google have to help Tizen along? None.

Tizen will be a flop, just like Bada.

Samsung has zero ability to create a sustainable platform. They will soon be commoditized by the Chinese vendors. They run Android just like Samsung does.

And as for Apple, " lagging in most tech specs from the leaders..." Apple offers superior technology. They don't need to have 3gigs of RAM to run as fast since they can do it with only 1 gig, because they understand that RAM impacts battery. That's technological superiority. Simply having bigger numbers or more of something doesn't mean that they are lagging in anything. It means that they have better technology design in implementation.

It's not as if Apple can't afford to put the biggest processors or more memory or whatever they want in their phones. There is a reason why the A7 is so much faster than comparable processors - that's everything to do with Apple's technological prowess and doing it all in house vs. simply buying an Nvidia commodity part.

Kevin P

@RottenApple: Samsung already make Google-free Android phones, and have done for some time. In China their Android phones have no Play store, no Google Maps, no Google Search, no Gmail, no Chrome or any other Google services - and yes, I'm talking about genuine Samsung models like the Galaxy S4 and Note 3, not some domestic knock-offs. Admittedly China is a special case as certain Google services are blocked, but it shows that the situation is more complex than the "all your phones have Google or none of them do" situation described in some media.

@Tomi: No chance of a Motorola comeback? When I went back to England over Christmas the Moto G seemed to be hugely popular, more than any other phone except Apple or Samsung's flagships. If the same thing is happening in other countries I can easily see Google-Motorola breaking back into the top 10, especially if they can follow through with some more good models in 2014.

RottenApple

@Kevin P.:

" Samsung already make Google-free Android phones, and have done for some time. In China..."


You said yourself that China is a special market and for that reason doesn't fall under Google's terms - otherwise no Android manufacturer could sell there, so it doesn't count.


plum

As Roo44 pointed out:
"difference between flagship model (current 5C) and discount models (5S). " is incorrect. Being as how Apple sells only 3 models at a time, while others sell tens of different models, one would hope that "the most influential expert in mobile" might have been able to get this small fact correct.
However, facts seem not to matter to today's 'experts'. For example, are all these hundreds of millions of Android phones sold last year, and for this coming year, running the current version of Android (4.4)? If so, then great, but prove it. As the chart at http://en.wikipedia.org/wiki/Android_version_history shows, 30% are running a 2year old version of Android, with another 45% running even older versions.
If all these Android vendors are really selling new "smartphones", shouldn't the more current version of Android show a much higher share?
If they aren't, then can you really count them as today's version of "smartphone"?

Roberto William Sripalamama

@Tomi

What about Motorola and the AFFORDABLE motoG? It seems to me that moto will make a comeback in 2014. How about the other Chinese manufacture such as Oppo, Meizu? How big are they?

What went wrong with HTC?

BTW tomi, in your (other) post why did you seperate the Windows Mobile and Windows Phone OS user number, but not seperate the BB OS 6-7 and BB OS 10. BB OS 10 and pre-10 is 2 different OS just like WM & WP. Should you seperate their user base as well?

@Kevin P

Samsung did NOT fork android in China. It's still the google android, but wihout app store.

zlutor

What about Nokia's rumored Normandy: https://twitter.com/evleaks/status/418085111536435200

Will it be released or it was made for forcing M$ buying dumb phone division, only?
According to rumors it was not made in D&S division but in some research project thus remains inside Nokia after finalizing the deal with M$...

KPOM

@KevinP, Google is starting to aggressively price Motorola phones here in the US, as well. I think Tomi is underselling the possibility of a Moto comeback.

bdga

wow… now I know where the sun shines from. hope you don't spend too much time in front of a mirror… you'll go blind

Earendil Star

Hi Tomi, welcome back and Happy New Year!

On Apple, and its China strategy, an interesting read is from "China Mobile unlikely to boost Apple's Chinese gameplay". As I already said in my previous posts, Apple has now reached practically all relevant mobile operators worldwide (which means that there is no more space to expand geographically or on more carriers), and it appears that its negotiating strength is waning (carriers are interested in the iPhone, but are less and less willing to subsidise it at the same levels we have seen in the past). Am I saying that Apple is doomed for granted? No. But overlooking these factors is shortsighted if one wants to have an unbiased view at what is happening to Apple. Actually, these are the most important aspects to consider when trying to forecast Apple's future performance. All these factors do not bode well for the continued capacity of Apple to sustain its current level of profitability. So, all in all, I feel that Tomi's predictions -this time on the peak iPhone- are likely to be vindicated. Not that I hope to convince the usual AstroFanbois and their Baseless Boring WillBeToo propaganda delusions.

I also appreciated Tomi's view on MS' current position. The usual Boring and Baseless Astros always say that Android does not count, that Samsung is the real thing and the others are struggling (which, by the way, is BS, otherwise we would not see so many successful new entrants and challengers). Yet, when talking about MS' WP (P)OS, then the device maker does not count any longer, but what counts is the "Ecosystem". As usual when just speaking propaganda, one treatment applies for the enemy (Android), another for the friend (MS WP POS). So, when talking about Android, we are told to disregard the whole market and focus on Samsung only. But when talking about WP, everything counts. Well, I say then, following Tomi, let's be consistent and look at individual device manufacturers vs MS. Ooops... MS is no longer third...! but NINTH...! LOL.

Again, does this mean that MS' WP has no potential? No. Let's not forget that MS has already been propping up its devices unit (...ehm, exNokia) for a couple of years already (since the Symbian/Meego cash cow had been slaughtered and the company forced to focus on the WP (P)OS exclusively, which resulted in huge losses), and is likely to subsidize its loss making devices unit for years to come. MS has very deep pockets, and carriers and retail chains worldwide are more than happy to accept MS cash to sell their WP dumbphones. Plus, the Nokia brand still maintains its appeal, which is why MS is keeping it, and is the only real reason why Lumias sell in some markets (together with the low MS subsidised prices). But it will certainly be an uphill struggle for years to come.

Another reason to consider for the WP lacklustre performance is the attitude by MS towards its customers and "partners". MS has always been used to living in a monopolistic space, where it was the only meaningful supplier, and where the enterprise was what really counted: "convincing" an IT head is much easier and cheaper than doing the same in retail. Furthermore, its incumbent position coupled with its culture, made it a terribly arrogant entity. MS has always been used to take unpopular one-sided decisions, as no alternatives were available, and to force feed its customers with all the crap it made (ribbons, face changes, W8 modern adridden UI, etc.), just because it estimated it added to its bottom line. A latest example: most Symbian users are being left in the cold after 1 January 2014, because the OS is no longer being actively supported, and despite original declarations by Nokia to ensure support until 2016. Some apps suddenly stopped working, rendering the devices almost unusable, because they had been deliberately programmed with an expiry date. An even worse fate to that suffered by the unlucky WP7 Lumia 900 launch customers, who were MacroScrewed after just two months of their purchase, when MS launched WP8, which would not be installable on the... at the time Lumia Flagship!

So, it's not only that MS devices are crap, and force the user in a locked ecosystem, it's also the arrogance that will marr MS' ambitions. Or at least, make the attainment of success much, much costlier. At a time when the market will inevitably reach some saturation (yes, the smartphone exponential boom years are almost over), it's not the best place where one would like to be.

On one thing though, I disagree with Tomi: I do not think the bloodbath will become more boring in the future. In fact, given the lesser space available because of the reaching of saturation levels, the fight will most likely become even more intense. Very interesting times lie ahead of us.

Earendil Star

Eduardo, hat tip for the Ben Thompson link. Although I disagree on the suggestion that Android *exclusively* would have been Nokia's best option, what I most liked is the convincing unveiling of the tragic THTRH Elop mole nature, demonstrated by the MS propaganda he blabbered about. Ben Thompson says:

--quote--

Nokia should have [...] used their unmatched supply chain and distribution to do to their competitors, well, exactly what Nokia had been doing to their competitors for the last decade (if you think Samsung is running roughshod over everyone today, in 2007 they could only manage 41 million phones compared to Nokia’s 110 million)

As an aside, a few months ago Stephen Elop came up with a new reason why Nokia was right to choose Windows Phone:

“I’m very happy with the decision we made,” he said. “What we were worried about a couple of years ago was the very high risk that one hardware manufacturer could come to dominate Android. We had a suspicion of who it might be, because of the resources available, the vertical integration, and we were respectful of the fact that we were quite late in making that decision. Many others were in that space already.”

“Now fast forward to today and examine the Android ecosystem, and there’s a lot of good devices from many different companies, but one company has essentially now become the dominant player.”

This is revisionist bullshit of the first degree. Had Nokia gone with Android, and the result had been one dominant player, it very likely would have been Nokia. More likely it would have been Nokia in first, Samsung in second, and everyone else fighting over scraps.

--unquote--

Exactly! Just go and tell the usual Astros. Useless.

khim

I think what you need to know about Android and Nokia is just this one quote from comment in a Tomi's blog:

Tomi- yes, I'm guilty of the 'drunk on iphone' comment and thanks for the citation! However, I think you're wrong about Android. Android is license free, it has multiple operators and MNO's backing it. It's reach will rapidly become very big indeed. It will overtake iPhone in 2010, it is seriously challenging incumbants; and I'd expect to see a Nokia phone running Android within 3 years (if they are still even building hardware then! ;-)

Andrew J Scott | December 09, 2009 at 09:50 AM

http://communities-dominate.blogs.com/brands/2009/12/us-west-coast-drunk-on-iphone-yes-but-android-is-not-the-answer.html

Note that while this is just a comment in the Tomi's blog it's a bit usual because the whole article is dedicated to the "refutal" of a single line "People on the West Coast of the US are iPhone drunk; its time to wake up to Android" from the very same Andrew J Scott. There Tomi explains how Anroid that "if Apple is the Cadillac as a niche luxury product, then Android as Maserati, is a far far more niche, more rare luxury product", that "Nokia is 'doing everything right' even if some analysts does not like the current model of E71 or N97", etc.

Today we know what happened, right? Nokia decided to go without Android and is no longer doing hardware - that was one of the options. And it was in 2009! Before 2010 underperformance, before Elop, before everything! Smart people understood what goes on back then and options for Nokia were two: go without Android or go away. Nokia spurned Google so much in 2007-2009 that Google was not all that inclined to give it preferential treatment in 2011, but even without preferences it could have been a winning combination. May not be to the level that Nokia would still dwarf the competitors but certainly better than WP have been.

RottenApple

@Earendil Star:

Concerning Microsoft's arrogance, a lot of this was Ballmer, so there's some hope - albeit slim - a new CEO might change things.

About Apple, well said. I find it funny that the Apple proponents are persistently ignoring the potential problems that may lie ahead.

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