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« Ok, a Few Words About Microsoft Under Satya Nadella | Main | Sony Q4 Results in Smartphone Wars - We now have all rankings for Top 10 for 2013 - and some tidbits »

February 06, 2014

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Dipankar

Although Canalys did not write anything that is incorrect, but I do realize how some people could be misled. But I think these people probably have lesser knowledge of the reality in the industry to begin with. I mean, anyone should be smart enough to realize that growth from selling 1 device to 2 is 100% growth rate! ;-)

Wayne Borean


Dipankar:

So you think Canalsys should be able to shade the truth, and trick Consumers?

Wayne

NokiaLove

Why, Wayne, do you often find yourself buying phones just because Canalsys said that specific OS your phones use is growing fast in usage?

Kenny

Let's not forget that WP's pathetic growth rate was achieved by selling the Lumia 520 at loss. Just this one model account for 40% of WP sales now. At US$130 with no contract it can only be a loss for Nokia. Sales of high end Lumia are not enough to subsidize the low end. That's why Nokia's smartphone division makes a loss every quarter.

Tomi, what is your comment on the Android powered Nokia Normandy? Will Microsoft allow this to the released? If the Normandy is released at less than US$200 it will decimate Lumia 520 sales overnight.

Tomi T Ahonen

Dipankar - yeah. I did state on the top that technically Canalys was telling the truth, only it is deliberately selecing a statistic that will be almost always misunderstood if they don't give the total growth facts alongside it. The 'anyone should be smart enough..' - come on, Dipankar - did you SEE the coverage this past weekend? EVERY single article with Canalys numbers leads with that same silly misunderstanding. They knew what they were doing and we can't expect journalists - verbally talented people - to have wanted to study statistics at university..

Wayne - haha

NokiaLove - hey don't tease my man Wayne. I always buy the phone that Canalys talks most about. Thats why I have drawers full of useless Lumias.

Kenny - good point about L520. Hey, Project Montainview ie MView the Android phone by Nokia. Yeah. That was the rush job that Elop didn't want to do but I believe it was the Board that insisted he develop as it became obvious that Lumia had failed by about Q1 of last year yes 2013. So then they started the rush job of Mountainview so that it would be the backup plan and first Android phones for Nokia could be released this year. The gossip suggests first model was actually port of Meego based N9 which shouldn't be too hard as Meego was cousin of Android both being Linux based. The phone was leaked so that Microsoft heard about it - that is why Microsoft suddenly improved its offer and Nokia could sign the deal to sell the handset division. So thats the history. Now what next..

We'd all love to see it. We'd all go buy it. A 'real' Nokia powered by Android. That would be a killer definitely. But it will never be released. Because if Microsoft allowed now a 'Nokia' ie Microsoft phone with Android on it, every one with half a brain would read that Windows on the desktop will die soon... Microsoft will be the last company to join Android after they have squeezed every last ounce out of the dying breath of Windows. Its like when Sony finally threw the towel on Betamax and went VHS in the video cassette recorder wars... that is you last move. They will most definitely never allow MView or any other Android phone (nor any other Android gadget) to be sold by their Nokia handset unit. Sorry. Won't happen..

Tomi Ahonen :-)

Nobody Special

For illustrative purposes, you mention the Olympic sport of "speed scating". That's something I'd like to see. Do you know whether the event will be broadcast by NBC or RedTube?

Tomi T Ahonen

Nobody - haha gosh. I plead... I'm a goddamn foreigner not a native speaker.. (so being a debate coach for several years in America coaching kids to use the English language more efficently to win arguments in competitive speech contests would disqualify that excuse? No it wouldn't. yes it would!. No it wouldn't. Wouldwouldwouldwoulddddd)

Thanks. I'll go un-invent the funniest winter olypic event and lets make it back to skating.. Besides, what would we Finns know about ice skating anyway only all our lakes freeze at winter as does the seas to Sweden, Russia and Estonia..

Tomi Ahonen :-)

mark

And you're being a bit duplicitous by not mentioning that Nokia smartphones were already in steep decline when they switched to Windows Phone. And that the primary reason for the switch was Nokia's lack of competitive app store and developers tools.
They weren't hoodwinked into the switch, and didn't sacrifice their success for it. They were going down the drain fast and needed Microsoft's expertise in building a third party app ecosystem before they ended up floating in the sewer weighed down by unprofitable feature phones.

Matches

While what you say is true, that "never in a million years can Windows Phone catch up to Android if Android keeps growing TWENTY TIMES more than Windows Phone", that is also not a misleading way to look at the data. You took the change in total unit sales and turned it into a rate over time. This is like saying:

"A toddler increased his weight from 20 lbs to 25 lbs in one year. His teenage brother increased his weight from 130 to 150 pounds in the same year. The toddler will never in a million years catch up to his big brother if the the big brother keeps growing FOUR TIMES more than his sibling."

Of course that is true. But that is also misleading. The baby is growing at a much faster RATE than than his brother and any reasonable person would use RATE of growth to project the future, not raw pounds gained nor unit sales.

WP actually WILL pass Android since it is growing at such a faster rate. Because if this holds up, in the year 2038, WP will sell 296 trillion phones and Android will only muster a paltry 276 trillion :-)

Of course this is only jest. But I wonder why you rail so vehemently about this report. I did as you suggested and googled it. They include right there on the page the exact same thing as the 3rd graph you posted here as the "real" "truth", (except it also included the other platforms iOS, BB, and "Others"). It's right there, the truth you're saying they're obscuring, on the Canalys website. The. Same. Graph.

You imply in this post that Canalys is "reporting the opposite of what is the truth", that they have implied that WP is somehow winning or catching up to Android. But right there, in the lead paragraph, it states "Android's dominance grew." It also points out, right there in the opening paragraph, that "Microsoft saw a percentage point share rise to 3%".

And you call for the analyst to be fired. You call his name out and call him a moron. Jingwen Wang. The man who pointed out Microsoft's soft end to the year, and is quoted in the Canalys release as saying, "Nokia and Microsoft failed to stimulate sufficient demand for the latest Lumia products to deliver a seasonal sales boost," and "Microsoft has much to do if it is to continue carving out a growing share of the smart phone market." Yes. Shame on this man. Clearly this man is a corrupt moron and should be fired.

Interested to know

The current generation of people in their 20's don't seem to make distinctions between marketing propaganda and journalism. Really, they don't even seem to care as long as they get paid by someone.

The Nokia Android phone seems like the old Microsoft idea of "embrace, extend, extinguish". The old MS would probably feel that once you've bought a junky MS Android phone slathered in MS Bing/Office services they can upsell you on a true MS Windows phone with even better services on top. Once you're converted to a pure Windows phone then MS's monopoly is safe again.

Tomi T Ahonen

Mark - no you are totally wrong. Nokia smartphone sales GREW from 77 million in 2009 to 103 million in 2010. That is not 'steep decline'. That is not decline. That is not just growth - that is STEEP GROWTH. Nokia grew MUCH MORE than Apple's iPhone in 2010 !!!! Please check the numbers, Nokia Quaterly results are on their website for anyone to see.

Matches - ROTFL - that was brilliant ..by year 2036. I really literally laughed out loud! Thanks!

Interested to know - yeah that really looks like it was it..

Tomi Ahonen :-)

s

Hey Tomi.

I wish you fixed your article a bit: like choose which order of derivative you really want to talk about, remove the comment about basic math (because a) its not basic and b) its not about the math, it is about boundary conditions. Just like Matches said math suggests WP will eventually win provided same growth rate stays long enough).

Next up I really did not like comparison of market share and speed; that one's misleading into belief that market share is first order derivative of something.

That said, WP was not sold for the full year 2010, was it? So part of your nice graphs are a bit misleading, too. I know that here you followed Canalys numbers, but still think it should be fixed.

Too bad it ain't gonna happen now.

RottenApple

@s:

"Just like Matches said math suggests WP will eventually win provided same growth rate stays long enough"

But it won't! The more the system grows the more the growth rate will decline.
Anyway, math also suggests that in order to catch up to Android, WP needs to grow more in absolute numbers, not just relative to previous results.

The entire thing is truly hilarious. They celebrate that their sales have increased from next to nothing to double of next to nothing. Quite an achievement.

Compared to how Android performed, the WP growth is mere noise.

s

@RottenApple

"But it won't! The more the system grows the more the growth rate will decline.
Anyway, math also suggests that in order to catch up to Android, WP needs to grow more in absolute numbers, not just relative to previous results."

Won't happen in real life? Yeah, quite so.

Tomi T Ahonen

Hey guys.. at least I TRIED to make our most boring topic possible - statistics of telecoms 'funny' and I TRIED to use different analogies. The one I was wracking my brain about forever was that skating one, I just couldn't find anything that could work but then thought that would be similar. If you can give me another please do...

But yeah, haha, I knew we'd get the math-dawgs out with this posting haha.. Let me take those suggestions under advisement haha..

Tomi Ahonen :-)

Another ex-Nokian

Just wondering, if smartphones below $130 are sold at a loss (as someone said above) what would Nokia's market share of smartphones above $130?

Tomi T Ahonen

Another - we could do some estimates if Nokia had given us the usual breakdown like their regional sales and revenues but they stopped doing that now in Q4. They didn't even give enough data for us to count the ASP accurately for Lumia vs dumbphones..

It is pretty obvious what the reason is, as Lumia sales tanked but featurephones grew, it means big Christmas for Asha which woulda been very embarrassing for Microsoft that Asha is outselling the hottest latest Lumias now.. so Nokia just said 'lets call all the Microsoft stuff discontinued business' and let MS worry about it from April

Tomi Ahonen :-)

CN

Tomi, could you please clarify one thing. You make hell of a noise Canalys playing with numbers. I agree with you, with small volumes %ages naturally twist the facts and story looks a bit weird.

However, I feel you do the same - you choose something that serves your purposes and if so, I'd like to know why.

"Nokia smartphone sales GREW from 77 million in 2009 to 103 million in 2010. That is not 'steep decline'. That is not decline. That is not just growth - that is STEEP GROWTH."

I agree with this one too. However, now you have decided to talk about absolute volumes instead of those market share figures you typically use. In 2008, Nokia's smartphone market share was 52.4%, in 2009 it was down to 46.9% and in 2010 down to 32.9%. 2011, to 15.6%. That, I guess you agree with me, is not steep growth.

These figures from Nokia, Tekes, Gartner and IDC - so pretty credible players I'd say.

A very nice interactive chart still available in here:

http://yle.fi/uutiset/kuinka_huonosti_nokialla_oikeasti_menee_analysoi_itse_laskurilla/6737500

For non-Finnish speaking: Älypuhelinten markkinaosuus = Smartphone market share

Tomi T Ahonen

CN - yeah totally valid point and completely true. I have those on my blog too haha as you should know..

Nokia's smrtphone market share held rather stable through 2008 after which they fell modestly each year to 2010 - this as the number of global giant rivals tripled in the smartphone space so obviously the guy who had started with 100% and was biggest would see erosion. But the rate of modest annual decline roughly one in ten points per year while the growth in absolute numbers simultaneously was at rate of four in ten.. and growing more than anyone else in the industry so pulling away from all rivals.. I know. That modest decline in market share then turned catastrophic in 2011 setting a world record in fall. If you remember about this time last year I drew the comparative pictures vs Palm, Motorola, Siemens, Blackberry etc.. Nokia's world record fall - in market share - for 2011 then was followed by even greater fall. As in the numbers you listed Nokia's market share fell to half in one year. No market leader in any global industry of Fortune 500 sized players has EVER seen their market share fall by half in one year - not even New Coke or Toyota with its brakes etc.. And that world record fall was then followed by even worse fall in market share - a fall of two thirds going from 2011 to 2012... So Elop took his own world record for failure and managed to top that with an even more disasterous world record.

I have this all on the blog and discussed it ad nauseum..

Cheers

Tomi Ahonen :-)

Webbb

Tomi.

Why are you comparing unit sales in your numbers and not revenue?

Why are the unit sales better than revenue? I don't remember you addressing this on your blog.

CN

Thanks Tomi. Was pretty sure you delete that one too. :-)

So, from 77 M units up to 103 M looks good only until you take a look what's going around you. If, with "such impressive growth", you're market share goes down from 47% to 33%, you should understand that it's not OK. You call this modest, I'm not so sure... 26 M more devices than in previous year, market share down by 14 %-points. Growth? Sure, but not in a healthy way. But then again, that story we know already - we just debate if it started in 2010 or far earlier.

Symbolset

The goal with market share is to leverage ubiquity to influence the direction of the market. Here is the right way to look at market share growth: the "finish line" in the market share race is 100% market share. You can't get more than that, and if you achieve it you control the market utterly until something disruptive comes along. Anybody can look at how much they improved by considering their motion toward the finish line. In this case "opportunity" at any point in time is the distance to the goal: 100% - your share. This gives small share starters an advantage, but a fair one - the opportunity before them is much greater as they have more of the market to gain. An improvement then would be to improve (1 - (100 - share finish) / (100 - share start)) for any period, as that is the fraction of the distance moved toward the goal.

With 68% share in 2012, Android really didn't have a lot of distance left to the goal (using Canalys figures). The start opportunity is 32% (100 - 68). Going to 79% they closed on the goal by 11 points and the finish opportunity is 21%. 1 - (21/32) = .337. They have moved 1/3rd of the way to the goal. They achieved 1/3rd of the opportunity before them (total ownership of the mobile ecosystem) in one year. That's a fast rocket and the goal is within view. They will probably slow down on this metric this year, as the loyalty of Apple's fan base is playing "goal line defense" in American football idiom, and will increasingly resist Android's march to the goal as it approaches.

Now look at Windows Phone. Finish opportunity is 97%. They don't give us the "before" number but we can figure it out. "Shipments increased 90% to 32.1 million" = start units 16.9 million. Divide by 2012 units given as 785 million and you get 2.2% start share. That's an embarrassing figure for Microsoft, and that's probably why it's not given. Start opportunity is 97.8%. 1 - (97 / 97.8) = 0.008. Microsoft has achieved 8 tenths of one percent of the goal of 100% market share. That finish line looks horribly distant. Since Windows Phone is the only one that needs three digits to express the difference rounding may skew the numbers, but not much. There is no denying that they are not approaching the goal at any appreciable rate. They are in no danger of influencing the course of mobile technology until they change this.

On this scale Apple is moving backward but of course they aren't running in the market share race. They are playing for money instead and winning at that sport. We will see eventually how wise this strategy is. For now they are dining on gravy.

"Other" and everybody in that category moved backwards, of course.

Spawn

What clear is that WP8 is done. Bill Gates doesn't went out to public and declares a failure long before work on fixing that begun. Microsoft pulled out of WP - remember Nokia's outcry ~a year ago? see the minimum changeset coming to 8.1? - aborted the WP8-line, moved all resources to a new strategy.

Is it a WP9 or is it a complete new, different strategy the new CEO needs to bring to the market? I bet, I am sure, its the end of WP in that form. Think a minute how such a syrategy-shift could look like. What if your goal is selling devices, services, connecting them? Microsoft is Windows and they shift away. WP makes no sense. Amdroid does. Take it, replace Google services and Samsung devices, profit. What did the new CEO lead? Services. What's Nokia job? Devices. They are working on connecting these, making a product and only quesrion left is if basing it on Windows is helping or preventing to succeed.

Would a Microsoft/Nokia Normandy fit? Hell, yes!

Baron95

Why is this discussion relevant?

Windows Phone is a (very) distant 3rd ecosystem.

The discussion is simply about, are they going to grow at all or stagnate and die.

The only question is a directional question. They are so small that comparing it to Android is silly.

Compare them to Blackberry - who is not growing and is dying.

Having said that - yes, Tomi did make it a fun discussion - and tying in the Superbowl in a smartphone market share discussion was off the chart.

Tomi T Ahonen

ROTFL - you are DEFINITELY not the real Baron95 haha.. cheers! the beers are on me! 007 :-)

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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