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« Are We Near 'Peak Screen Size' for Smartphone Screen Growth? Is 6 Inches Too Big? | Main | Deloitte Counted 120 Million Used Smartphones Were Sold in 2016 (growth of 50% vs 2015) - Understanding the second-hand handset market »

January 06, 2017

Comments

Alex Kerr

Great stuff Tomi, thanks. I wonder how many of the non-smartphones in use run Java Mobile/J2ME (i.e. installable apps) and how many don't (i.e. Nokia Series 30 equivalent)?

John A

Always interesting to read this blog. Byt the way HMD Global have just launched their first android device Nokia 6.

So now we can say Nokia is back for real in the smartphone war.

Tomi T Ahonen

Hi John

Thanks! That's a device and specs that is priced to move in numbers. $249 for a metal body Nokia with 5.5 inch screen at 1920 resolution and 16mp camera (with microSD support). That is very good value in the mid-range price. Launches first in China. It does seem like they'll just miss the gift-giving season in China but this will sell in good numbers, provided they also get distribution set up reasonably fast in many major markets. In China initially the Nokia 6 will only sell through one distributor. I would guess that distributor has made some serious marketing commitment with Nokia to get the exclusive deal and the global launch status.

If this is the mid-range product, expect uprated specs for the 'semi flagship' and lower specs for the 'entry level' model and for this to sell around March-ish and 3 models out by June-ish. HMD had suggested earlier (or rumors about it did) that they'd end this year with 6 or 7 models out.

On the specs the part that most delights me is the microSD support. I am guessing the phone may also be water resistant/modestly watertight and that some parts of its specs will still wait to be revealed that may have some more goodies for us. But from this, I am looking forward to the 'semi flagship' first top-end device as the 'bigger brother' compared to this (it is likely the last of the first three to launch, the lower-price model to hit stores before the higher price model but all 3 likely shown in Barcelona).

Oh and I do like the metal body vs that 'tacky disco plastic' look we now associate with Lumia series. I would expect HMD to also do the metal body in a series of colors if not at launch, then very soon thereafter.

Tomi Ahonen :-)

zlutor

@Tomi: here it comes: http://www.hmdglobal.com/press/2017-01-08-nokia-6/

let's see whether the King has returned, or... ;)

zlutor

@Tomi: the interesting thig how mobile opetators will react: support or ignore.

latter one will be writting on the wall - former one, well some real hope, at least...

Wayne Brady

Great numbers, thanks for this service.

I remember first encountering, via you, the notion that multiple phones and sims was common in many places outside the US. Now I am such a person. :)

I agree that tablets are computers, not oversized phones and that phablets have eaten into the tablet market. I still love my iPad and my kindle fire tablets, my 72 year old mom still loves them as well (she doesn't have a smartphone or any other type of computer). My college age kids have little use for tablets. Most everything is about their phone, or they are using a laptop. Wait...One of my daughters takes an old iPad mini 2 to class to take notes, I bought her a keyboard that turns it into a mini laptop.

I am surprised that smartphones are only half the install base by this time. There are a LOT ,ore android phones to be sold in the coming years

Abdul Muis

https://mspoweruser.com/microsoft-ranked-8th-on-the-list-of-companies-awarded-with-most-patents-in-the-us/

IBM and Samsung with most patents in 2016, Apple not even in Top 10

Abdul Muis

http://www.theinvestor.co.kr/view.php?ud=20170109000602

Interesting data
2012.. Galaxy S3 . . . . . 65 million
2013.. Galaxy S4 . . . . . 70 million
2014.. Galaxy S5 . . . . . 45 million
2015.. Galaxy S6 . . . . . 45 million
2016.. Galaxy S7 . . . . . 48 million

Wayne Brady

Thanks, Abdul, I've been waiting for someone to put up those Samsung numbers. Now if we only had numbers for the Note series. It should be clear, though, how badly the iPhone is trouncing the competition. Apple will sell 10M more iPhones this quarter than the best YEAR ever for the Galaxy S.

I know, that's unfair as Apple's number won't just be iPhone 7 - but you can bet it's still more than 2 to 1 iPhones vs Galaxy S/Note on an annual basis

Abdul Muis

@Wayne

If you go to that link, it say that number is only for that year. i.e. Samsung sell 45 million Galaxy S5 in 2014. It did not say how much S3 & S4 samsung sell in 2014!!!!

chithanh

Also the competition is taking away sales from each other, and especially mid-range Android phones are eating into high-end sales.

So comparing iPhone to Galaxy S or even Galaxy S+Note sales and claiming such is disingenuous.

Interesting

@chithanh
Why are we comparing Apple to all other manufacturers combined, but all other manufacturers to each other?
You can have OS comparison or you can have manufacturer comparison but as long as manufacturers share same OS, you can't have both.

chithanh

@Interesting
Firstly, Samsung releases mid-range phones which takes away sales from their high-end phones. But they still contribute to Samsung user base.

Secondly, comparing any individual Android manufacturer to Apple is kind of pointless. If anything, that Samsung in the presence of the Galaxy Note, their own mid-range AND the other manufacturers still sold so many Galaxy S is quite an achievement.

Wayne Brady

I see what you did there...sneaking in a talk about revenues :)

This is a MARKETSHARE blog. Ignore the trillion dollar business the iPhone and it's spinoff's have created.

I do marvel, nonetheless, that Apple was able to take and hold 2nd place even in unit marketshare. 10 years in, with all the communization that has occurred, Apple remains the #2 manufacturer of smartphones by unit count.

Apple captured and remains the #2 smartphone platform as well. While it looks unimpressive compared to Android's global unit share...consider the state when Apple entered the business.

Mighty mighty competitors - how naive Apple was to think they could just waltz into the telecom market when GIANTS were there: Nokia, Motorola, Sony-Erricson, RIM...and the telco's who ruled: China Mobile, Docomo, Verizon. There was Symbian, Blackberry, Windows Mobile, PlamOS, Java ME.

Ignore the trillion dollars in revenue as that's not marketshare news. Just think of the hubris of Apple, the music player company, jumping into the phone business - taking and holding second place...and still there and going strong 10 years later.

You don't even have to take into account that ALL of those dominant companies and their platforms were thrashed into non-existence (for the platforms) or run out of the smartphone business (or barely hanging on).

Even if you want to ignore how the iPhone both shaped Android and created the market demand for Android....look at Android the destroyer who laid waste to ALL that came before. Except for the iPhone.

Pretty damned good, without paying any attention whatsoever to the trillion in revenues in 10 years for Apple.

Per "wertigon" Ekström

@Wayne:

Android the destroyer is destroying iPhone as well. It's just taking a lot longer time than usual. :)

Wayne Brady

@Per - that's a wrong conclusion from global unit market share. Android is scooping up almost all of the "dumbphone to smartphone" transition, and the rest of the market is mature.

But those dumbphone customers were never iPhone customers. Android taking them isn't doing a thing to the iPhone.

The iPhone user base is still growing. Even though Apple sold less iPhones for the year last year (for the first time) - it still added to its user base. There are still more Android users that switch to the iPhone than the other way around.

Apple with iOS has a different strategy than Google with Android. They both are succeeding with their goals. Android absolutely dominates the unit volume, it's not even close.

Likewise, Apple dominates with profitable customers - it's not even close. Instead of launching cheap models and making a bid for the third world markets - Apple is focused on expanding its reach within the middle class wherever that is found (like Urban China). Apple is finding MORE things to sell to those SAME middle class customers rather than finding customers among the poorest people in the world.

To wit: the Apple Watch, Apple Pay, Apple Music, Beats Headphones, AirPods, iCloud, the App Store, iTunes, and the Apple TV. And that's ignoring the iPad and Mac which also participate in the "virtuous cycle". But just the iPhone related accessories and services show Apple's strategy.

Pick any one of them - and an Android manufacturer would make far more money if they had that iPhone add-on business rather than trying to make and sell Anddroid phones.

Samsung is the one exception, but then, you can see clearly that Samsung is striving to do every "add on business" for its phones that Apple does.

The "flop" Apple Watch became the second largest watch business by revenue. Only Rolex brings in more revenue making watches. All the Android smart watches combined don't even come close.

Apple brings in 8.5 billion in revenue just from its piece of the App Store, and pays out $20 billion to developers. and that's still growing at a nice rate. By itself, that's more than any Android manufacturer brings in outside of Samsung.

The AirPods will likely bring in more profit to Apple than any Android maker is earning.

Apple is winning in its strategy and Google is winning with its Android strategy.

Looking forward to the progress of the Google Pixel phones as that is far more of a straight up fight. I believe that Samsung is the company most hurt by these phones. But I do want to see Google give Apple a real fight.

Per "wertigon" Ekström

@Wayne: The Android network effects are destroying Apple worldwide.

down to 14.5 % market share or lower this year, and I expect this decline to continue. What happens when units sink to 190M... 185M...

Abdul Muis

http://www.reuters.com/article/us-apple-court-idUSKBN14W2VH
U.S. appeals court revives antitrust lawsuit against Apple

Wayne Brady

@Per - how can Apple be destroyed as its install base grows? this notion of "network effects", while applicable in other areas, has already shown to NOT be pertinent to the iPhone.

How so?

1. The iPhone sales are at over 200M per year, and the install base is somewhere around 600M. The iPhone already has the scale to survive.

2. The 14.5% share is not evenly spread around the world. The iPhone has large share in the most valuable world economies: US, Japan, Urban China, Euro 5

3. All the network services (besides Apple's exclusive ones) are on both platforms. Facebook, WhatsApp, SMS, Skype, Line, Wechat etc. etc. including all of Google's

4. The distribution of "ecosystem participating users" is heavily skewed to the iPhone. And it's getting worse for Android as they bring over the next 2 billion of the world's poorest and least literate customers.

chithanh

@PWE
Android is not destroying the iPhone. The iPhone will be around for a long time.
But what happened is that Android made the iPhone irrelevant for the future of smartphones, and put it on a trajectory that it cannot break out of.

Much like Microsoft is now irrelevant to the future of computing. But far from destroyed.

I think it is important to distinguish between these two things.

Wayne Brady

Define "irrelevant"? When will the US, Japan, GB and Aus markets be irrelevant? iOS has 40-57% marketshare in those markets. 20-25% in the rest of the Euro5 and Urban China.

Now "future of computing" outside of mobile phones -- then sure. Android, like Linux it's built on, is going to be put everywhere. I don't think any of the iOT devices are going to run iOS (not sure they are going to run Android).

It will be interesting to see where tablets go with Android. It boggles my mind how STILL bad the state of Android tablets are compared to iPads. Not speaking of the mass of cheap tablets used as tv's. But "the future of computing" use of tablets. It's not Android that's the problem, but getting developers to create tablet apps that REMAINS an issue.

Mind you, I love my $90 Kindle Fire HD 8 which succeeded last year's $50 Kindle Fire 7 (which I left in a taxi). I've been giving them away as gifts. Netflix, Amazon Prime video - these are nice little portable media watching devices. SDCards let you "side load" all the pirated movies you wish (not that I know anything about that). I even replaced my mom's aging iPad 2 with the Kindle Fire HD 8.

But these are not going into corporations as work tools, pc replacements like iPad's are, and now the iPad Pro.

Per "wertigon" Ekström

@Wayne:

See, them profit things?

That's what they said about IBM and the PC too - "You know, these cheap-ass PC computers will never get anywhere, IBM is highly profitable, why would they want to invest in the PC market which is clearly a lot less lucrative market! It's insanity! Better to go with these mini computers, we're making a killing with those!"

And that's the problem with your reasoning. Apple will sell somewhere around 210M units this year, and I suspect the number will be less than 210, but I have no proof. Next year, that number will diminish slightly. Like say, 203M. Still no problem.

Then, the slow bleeding starts. 195M... 191M... 188M... Still bleeding but it's ok, Apple is awesome, they'll turn this around! 184M... 180M... 175M... And then... 140M... 105M... 87M...

So in 12 years time, Apple is down to one third of it's units, with Android relentlessly chipping away at them, one piece at a time. And this is even when Apple makes fantastic phones loved by everyone.

So yes, it will take around 15-20 years before Apple is done, at this rate. But unless they disrupt some other industry that can now drive their iPhone sales, the iPhone is eventually going to be toast. :)

Tomi T Ahonen

Hi everybody

I'm sure you guys spotted this & discussed it already (am rushing at airport) but just quick note, gosh, stunning numbers. So Nokia 6 will go on sale 19 January in China (only) and Chinese New Year is right at the end of the month this year, so they have just about a week to sell it. And the retailer is taking orders. They have 460,000 orders in first two days. For the mid-price Nokia for China alone. Yeah. Nokia is back.

Tomi Ahonen :-)

Wayne Brady

@Per - that's some projection from a really good year that was only "down" in relation to the EXCEPTIONAL year before. Also, the iPhone is still taking customers away from Android at a 2 to 1 win to lose pace (per the last update from Tim Cook).

Android is simply getting almost all of the dumb phone to smartphone transition. Those customers are neutral as it relates to Apple. They weren't iPhone customers before, and they still aren't.

The PC is on the decline as some of it's use case has been taken over by tablets and smartphones - and because the replacement cycles are ridiculously long (compared to what they were).

Winter

@Wayne Brady
In any market, the cheaper option will eventually develop to be good enough and take over the whole market minus a luxury segment. From cars to watches, to computers (mainframe, workstation, PC, going into tablets, to phones).

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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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