Yeah the final quarterly numbers are now rolling in. First up, we have the first of the big 3 analyst houses reporting its final smartphone sales numbers (for Q4 and for full year 2014). My regular readers know that I always calculate my number as the average of the totals from those 3 (used to be 4) houses, and from that I then plug in the known individual manufacturer numbers and estimate the remainder to fit best available info. So yes. Strategy Analytics was first out of the box, they counted full year 2014 to have hit 1,283.5 million ie 1.28 Billion smartphones sold worldwide. For Q4 their number is 380.1M (and yes, those who are playing along at home, your spreadsheet is correct. Strategy Analytics have found some more smartphones this year they didn't report before, about 3 million more.. yeah, me too. Wish they'd tell us which quarter they found them haha). Ok lets hope we get Canalys and IDC to report their numbers soon as well.
UPDATE PART 1: shortly after I posted this, IDC also released their final count. Total market 1.3B for 2014, Q4 sales 375.2M smartphones (Sammy number added to below)
LG FINAL 2014
We have the official number from LG for the full year. They shipped 59.1 million smartphones. LG hasn't given us their quarterly numbers regularly so its been guesstimates based on the - ahem - guesstimates by the analyst houses and other reported news so based on what I had for Q3, LG's Q4 would be down to 15.5M (down 8% from 16.8M in Q3). We should be cautious, the Q3 number was not solid, BUT, this would be consistent with Samsung reporting declining unit sales from Q3 to Q4 and we know Apple iPhone gains were not from the ultra-cheap rivals, it will be from the premium name brands - like Sammy and LG. But yes, I currently am modeling 15.5M for LG for Q4 but will go still revisit their Q3 and Q2 to see if I have to adjust those perhaps. We know the full year total, so if I reduce one of the earlier quarters, that would mean larger number for Q4. But yes, in Q4 in this preliminary share, LG has a market share down to 4.1% (from 5.2% in Q3).
Note that LG is reporting profits in its handset business, so this is a healthy rival, has been profitable now three quarters in a row. And of its migration from dumbphones to smartphones, LG is about on par with Samsung, as 75% of its annual handset shipments were now smartphones. Note for the global industry the migration is only about 67% so this is better than industry transition (or say, Microsoft-Nokia who still linger in last place with only 20% of their handset production shifted to smartphones in Q4, far less for the full year haha). So LG is holding steady at 4.7% annual market share and for 9 months have been profitable. I think its now time for LG to ramp up the competition and start to grow, show us what you can do.
If you are curious about where will LG end up on the annual Top 10 list, we know the top 4 positions are already taken, and at least one Top 10 rival does have bigger sales than LG out of the bottom 6. So LG can best hope for 6th ranking but also they won't be 10th or 9th (fight between ZTE and Sony). Depending on final Coolpad and TCL numbers, LG will finish between 6th, 7th and 8th rank, very likely 6th.
MICROSOFT LUMIA (NOKIA)
So then outside the Top 10 we had Lumia number at 10.5M (I had expected 12M if you remember my posting when the shock news came that only 1 in 3 Lumia handsets that had been shipped, had ever been activated). There I clearly said my Q4 number for 2014 was half-quarter number (6M) so I had expected Nokia-Microsoft to have its normal big Christmas quarter but the performance was truly lame. The Microsoft 'Nokia' brand of dumbphones is being ramped down rapidly, they declined total handset sales from 52.2 million units in Q3 to 50.2 million in Q4 (decline 4% when usually this is hot Nokia sales quarter). That included a decline of 3.2 million units of dumbphones for a gain of only 1.2 million more smartphones. Still this pattern continues with Lumia and Windows, that Nokia/Microsoft cannot achieve even a 1-to-1 conversion from dumbphones to smartphones, Microsoft is bleeding nearly 2 customers out, for every 1 customer migrated to Windows. Back before Stephen Elop wrecked Nokia's handset business juggernaut, that migration was consistently better than 1-to-1 and yes, irony of ironies that was with the 'obsolete' Symbian OS. (and every single quarter that was done profitably). Can you see how dead Windows Phone OS is? It is performing dramatically worse than SYMBIAN did haha. After all those 'glorious' updates to the OS from Windows Mobile to Windows Phone 6, to Windows Phone 7 to Windows Phone 8. And its still poison today.
Yes, the Lumia unit still generates a loss over at Microsoft and the 'news' that Lumia set a record is only bogus Microbrain propaganda, as the Nokia smartphone unit has not RECOVERED yet even to the sad sales levels it had as recently as Q1 of 2012 (when Nokia sold 11.9 million smartphones) and the sad Lumia recovery is far far from Nokia's peak of 28.3 million in Q4 of 2010 when Nokia was more than twice the size of the iPhone, had 29% market share and was four times the size of Samsung, and reported Nokia record profits in its smartphone unit. Incidentially since Lumia was launched, it has not produced one quarter of a profit. And yes, one in three Lumia units that has shipped from the factory to the retail channel, has never been activated. So yeah. That is a dead OS right there, Windows. No wonder all handset makers and developers are bailing out from the OS. Even Sony's Vaio unit which was supposed to launch Windows smartphones alongslide the Vaio laptops that run on Windows, no, they are now launching on Android instead. This when Vaio is an independent company now, not part of Sony. They examined Windows - even as its 'synergies' with the Vaio laptops - and they will launch Android instead. But Lumia yes it finished outside the Top 10 for year 2014 with a market share of about 2.7% (down AGAIN, from the pitiful 3.1% it held a year ago). Microsoft taking over from the mess Elop created at Nokia did not revive the Lumia unit. It is dead.
ABOUT SAMSUNG DECLINE
So I can't analyze Samsung numbers yet because Sammy didn't give their number for Q4 or for the full year 2014. We did hear, however, that their unit sales were DOWN in the Christmas period. That is VERY bad news. They were at about 78.5 million in Q3 so we can expect Samsung to be in the range of say 70M - 77M now, and that puts it squarely in the sights of the iPhone - for total smartphone sales lead in a quarter. Yes this is Apple's spike-quarter after their new model launch but still. Even if it is only one quarter, this is quite a shock. And we don't know the exact number (we may hear it at some point but probably not. We will use the average of the Samsung numbers as reported by the big analyst houses). But Samsung did say their quarter-on-quarter unit sales for 'smartphones and tablets' was down. The tablet business is not big enough to account for it, this is mostly down on the smartphone side. What is curious, however, is that Samsung also said their Note 3 phabet sales were strong and helped boost Samsung average sales price up. So while Apple launched the iPhone 6 series phablets, those apparently didn't bite (heavily) into Sammy's phablet sales. Maybe it was more Apple's exiting customer base who rushed to get the large-screen iPhones. And if so, Sammy's damage was done probably more on the bottom end of the scale. There we do see a heavily surging Huawei who has had a banner quarter (and perfectly timed for its home market, China). Xiaomi did not eat Samsung's Christmas dinner, as Xiaomi sales are down from Q3.
I wish we had more numbers, haha, but it does seem, that as Note 3 sales are still strong, the iPhone 6 Plus did not eat into Samsung phablet business. But as Samsung didn't say its Galaxy S5 flagship was strong (and it is after all, an 11 month old flagship) that is probably at the top end where Samsung now took a big hit from the iPhone 6. Meanwhile, at the bottom end, it is definitely not Xiaomi who is beating Sammy (only in China, but even there Xiaomi sales are down from Q3) no, that is led by Huawei with a strong surge currently. Meanwhile we heard from Huawei that they could grow even more at the bottom end but want to move upscale where bigger profits are available. And a shift in Samsung flagship Galaxy S4 to phablet Note 3 sales would not shift the Average Sales Price upwards, it would keep ASP flat. What is needed is for low-end phones to suffer and shift that balance more to upscale phones. So Samsung's big damage came at the bottom end, primarily to Huawei. But also ZTE and Lumia are up in the low-cost smartphone sector. Meanwhile other premium brand smartphones seem to also take a hit from Apple's Christmas spike - LG is down from Q3 and Sony previously already complained that they will downgrade their guidance for full year smartphone shipments. And for its impact of scale similar to Lumia haha, Blackberry was also down at the premium price end.
Thats kind of how I read it, where the big threats are and who is gaining and who is in trouble. And back to that iPhone spike - once again, this was a weak jump in the best quarter that Apple can have any year. It didn't even reach the levels Apple has had in past Christmas quarters for iPhone spike sales. Now Apple will see again the declining quarterly market share until in September we see the next iPhone. And as we've already heard from Huawei and Xiaomi they are rushing out their 'iPhone killers'. Samsung is definitely sharpening their knives for the fight this summer with the next flagship Galaxy. LG is now pretty healthy and preparing their next round. The battle will be joined and Apple's Christmas free ride is now over. But Sammy Sammy Sammy. They are now very much vulnerable.
There is one more bit of news. Samsung is giving guidance that smartphone sales in Q1 will be down due to seasonal factors ie after-Christmas sales decline. We can read between the tealeaves that Apple also expects such a decline into Q1 (January-March) quarter and with that, its now a real race between these two giants for also the next quarter. That is stunning. Only a year ago Samsung was twice the size of Apple. And Apple did not grow faster than the industry. Its Samsung who has stumbled, quite badly, in 2014. Can they correct this badly listing ship over at Gangnam. We know the next iPhone sales spike will come for the Christmas quarter of 2015. Samsung needs two strong growth quarters in the summer if it intends to achieve a 'buffer' to remain top dog this year, to counter the spike coming from Cupertino at the end of the year. It will perhaps be an interesting year, after all, in Bloodbath Year 5 haha.. Stay tuned.
And if you were curious how did Strategy Analytics award the Q4 race between Apple and Samsung? They didn't. They gave it as a tie. 74.5 million each haha.
UPDATE PART 2 IDC gave the race to Samsung on a margin of 600,000 smartphones in Q4, and 75.1M units for the Samster
More Q4 and end of year analysis as we get numbers