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« Revised Early Estimate of Nokia HMD Smartphone Unit Sales Year 2017 - Based on survey of carrier support and various data points | Main

November 03, 2017

Comments

Per "wertigon" Ekström

@Jim:

You're still missing my point.

The question is not, whether or not Sony can give Apple a run for their money.

The question is, whether or not Android can give iOS a run for their money. And here, yes it can, even in the premium department.

Abdul Muis

@E Petersen

"I am very curious, from a business/marketing perspective, what will happen. One thing is for sure, there will be disruption at some point. i can recommend professor Clayton Christensen's writings on this subject. How Apple is going to respond to such a 'new situation' is very interesting. It will also be very interesting to see how they will respond the day that sales start to drop and the company is put to the test. Will they panic or re-invent themselves? The same questions could of course be asked for Samsung, the current market leader. "

Me too. I'm also very curious about this subject. This is why I'm here. I see that Tomi understand the market, and I wish to learn his skill. Well, I'm learning so much from him, and I hope to see the day of Apple sales drop even more to study more from the situation.

Abdul Muis

@James Glu

"Hi Abdul...how about those great results for iPhone in China? You know...even BEFORE the iPhone X"

What great result?

Abdul Muis

@Wayneborean

"Oh shit, Jim is coming Unglued again."

I also hate when seeing him using reverse reverse reverse reverse reverse psychology just to avoid kick and ban by Tomi. It ruining my brain, and I got to pay real psychiatrist to fix it. LOL.


paul

@LongAAPLeology

It looks like iPhone X does not bring anything truly new except some marketing from Church of Appleology.

Here is a video you must watch: https://youtu.be/R59TevgzN3k

Jim Glue

@Per - the last public numbers we had on the premium segment was parity between iPhone and Android around the timeframe of the Galaxy S4. It's been downhill for Android ever since. Samsung looks like they have halted their breakneck fall for the time being...but nobody else was taking up the volume in the premium segment Samsung was losing. Sony is questionable whether they can or will stay in the handset market. HTC sold themselves to Google (yes, they still claim they will make their own phones). Lenovo continues to hemorrhage money as Motorola can't make a profit no matter who owns them.

We don't know how financially healthy the Chinese companies are. They can't be THAT profitable with their cut throat pricing. Some of them (like Huawei) are part of larger businesses that generate profits in other ways. (just like Samsung).

But no - the state of the union of premium Android is not great....and it's NOTHING like the 85% market share they have of the total market.

Jim Glue

I for one am shocked by the success of the iPhone X. That is one very expensive phone and there are no longer subsidies for phones ANYWHERE...not even in the US. Now, replacing subsidies are financing and leasing. People have just accepted the monthly fee for owning an iPhone and see the iPhone X as just "$10 more". It's really nice when you cultivate the most profitable customer base in the world.

Nokia's top of the line smartphones like the N70 were even more expensive "back in the day" than the iPhone X is today....they just didn't sell them in the hundreds of millions. Like Samsung, they had models for every price range. Dazzle customers with expensive phones that relatively few could afford, but you get the same sense of pride of having "bought a Nokia". In automotive they are called "Halo cars". Apple sells it's halo products to a huge customer base.

I really thought the iPhone X would be more like a traditional Halo product....one that only a small percent of it's customer base would buy. I didn't buy one...and if it were my year to upgrade, I might well have gone with the iPhone 8 due to the price premium of the iPhone X.

Apple is also brilliant in marketing. Remember how stupid a name "iPad" was? It's now just a household name world wide and nobody remembers the giggles and jokes about feminine hygiene products.

Well, now we have the notch. Clearly Apple didn't want there to be a notch. I was shocked that after seeing "the hole" in the Essential phone that Apple would do something even worse. And it is worse...don't get me wrong.

But rather than minimize the notch, Apple is turning the notch into an icon. You know you have Apple's latest and greatest when you see that notch. It is prominently displayed in their advertising. They did nothing to hide the notch (like wall papers with black strip at the top). Essential phone has many of their ads showing the back of their phone.

Apple's Airpods look dorky. They do. I have a pair...they do. Love my Airpods. But Apple puts out REALLY cool commercials showing the Airpods in magical ways and...again...makes them iconic.

HMD is trying to do the same with the Bothie cam. My twitter feed is flooded with a really cool "Bothie"....but anyone with a brain would notice that it would be impossible for the woman who took the photo in the position she is shown...of the man in the photos that allegedly was taken together as a "bothie". At least with Apple's dancer dancing up the side of a building...you know Apple is selling a fantasy. HMD is just passing off a fraud

Abdul Muis

Not really apple news...
Not really smartphone news

but..
Broadcom Proposes to Acquire Qualcomm for $70.00 per Share in Cash and Stock in Transaction Valued at $130 Billion
http://investors.broadcom.com/phoenix.zhtml?c=203541&p=irol-newsArticle&ID=2314458

130B !!

Tomi T Ahonen

Hi Everybody

(longer thought series, am posting in 2 parts, this is part 1 of 2)

Was reading through the comments and reminded of our 'Bloodbath' years. Before the Bloodbath started around 2009, the industry was sleepy with many 'old regular' brands in the top of the smartphone bunch. Nokia nearly owned the market with more than half of the market and Symbian the OS had about 3 of every 4 phones sold. Brands like HTC, Blackberry, Motorola, SonyEricsson, Palm were up there with Samsung and LG. Huawei and ZTE were only just getting into the handset business and the occasional Japanese brand might visit the Top 10 like a Sharp or Fujitsu or Kyocera. Apple had just climbed into the Top 10.

Then came the Bloodbath for a few years. Nokia, HTC, Blackberry, Motorola, Palm and Ericsson of SonyEricsson all were ousted from the top. The Japanese were gone. The Chinese invasion took place and today only Samsung, LG and Apple remain of the original rivals in the race (with a possibility that Nokia via HMD could perhaps return). Seven of the Top 10 are Chinese brands with Huawei the strongest already at the rank of 3rd biggest. The picture today is very similar to what it was like when I declared that the bloodbath was over - even the market share portions are nearly the same for most of the brands in the Top 10. Only an occasional Chinese brand is moving in and out, similar to how Japanese brands did before the Bloodbath.

So the market has returned to being stable or "Normal". Even with 'big' events happening from phablet iPhones to Explod-a-pants Galaxies, the market has barely nudged one way or another. No total crash-dives to the end of any brand like we saw Motorola, Blackberry and Nokia dive 'off the cliff'. A new brand can enter the Top 10 like say Xiaomi, based on the power of success of a popular handset in China, and then not make it globally, until they build the retail reach. This is slow and expensive and will take far longer than that one popular handset model's life span. So then we see the kind of up-and-down pattern as the global reach is being built. Xiaomi now is at the top of its 'second hill' in that pattern as its India strategy panned out, but even that doesn't get Xiaomi into the Top 3 again.

So the 'sudden swings' in the market have ended. There was a turbulent period from 2010 to 2014 in which the swings were enormous and huge former giants were felled. But now, its a ho-hum market of tiny shifts at the edges of the market share races. You might gain a position or two in market share one quarter and lose a position or two in the next. But the Top 10 is mostly the same companies. At the top there is no race against Samsung. They are unassailable and unless they have some kind of Elop moment, they will be safely the biggest smartphone maker for at least the next 5 years. Their rival eventually will be a Chinese brand, most likely Huawei.

Apple cannot hold the Top 2 ranking, it will diminish over time and Huawei is showing diligent continuous improvement for four years straight, doing most of the things it needs to do, all while Apple refuses to 'care' about market share and doesn't expand its portfolio enough to 'defend' against Huawei. Apple is locking in much of its current base but cannot expand as the market keeps growing. Huawei consistently grows faster than the market (when looking at annual sales levels) and it means Huawei will definitely catch Apple. Like will do so and outsell the iPhone at least one quarter next year (one of the two summer quarters) and for full year, Huawei will likely pass the iPhone in 2019.

Back in the pack at Rank 4 and below, there is nobody that in any way strikes as perfectly poised to follow Huawei. What we could well see, is a consolidation phase where someone with very deep pockets starts to buy out rivals. Lenovo theoretically could be that player already but they seem to be spooked by how impossible it is to get the Motorola monster under control and into profits. Lenovo's own smartphone unit was profitable before the Motorola purchase, so it is not an impossible feat. BBK of China (owner of Oppo & Vivo etc) is another possible player who could get into that strategy. For BBK the global footprint is missing for Vivo & Oppo & OnePlus - so a purchase of an international brand like say Sony's or LG's phone biz could be the way to get the international reach faster than building it organically. Here they no doubt look at Lenovo's struggles with Motorola and worry, as Lenovo did originally succeed quite nicely with another large American brand, IBM (laptops).

I've said it before but it strikes me now how dramatic the period was. The years before the Bloodbath were serene calm period of nerdy geeks admiring smartphones that sold in modest numbers. Then came the bloodbath and in a few years the whole world was wrecked. Now nearly only new brands remain both in hardware and the OS platforms. And we've returned to a period of stability in the market.

(that was the intro to what comes next ie part 2, about disruption)

Tomi Ahonen :-)

Tomi T Ahonen

Hi Everybody

(continuing with part 2 of 2, now onto disruption)

That said, about disruption, Christensen's book, the current stage of the industry... There are essentially two possible paths. One is, that there is 'the next big disruption' like large screens or smartphones or music players or text messaging or digital communications were to the mobile handset industry and offered massive opportunities for newcomers. Nokia took Motorola's title in the transition from analog to digital and then while many made plays at Nokia, they held their crown up to the smartphone stage where they self-destructed. The music player gave a rise for Sony's Walkman musicphones and the phablet screen size to Samsung's Note in capturing a lot of market share fast.

If the 'next thing' say teleportation or time travel comes to the phones in the next few years, then yeah, we'd have another 'disruption period' still to come. But EVOLUTION will not do it. Just evolving screens to be a bit more larger, or a bit more clearer, or cameras a bit better or 3G 4G speeds become a bit faster into 5G and 6G, that won't be enough. For disruption to be possible it has to be a meaningfully revolutionary new ability added to the 'Swiss Army Knife' that is the modern mobile phone. Even something as massive as payment system, isn't 'enough' because that has been done on mobile phones in some ways for 20 years now, and even mobile money is just an evolution on that path. I mean that we need something truly radical. haha, even 'seeing through walls' is NOT disruptive enough (FLIR cameras on CAT smartphones)

So if there is another thing to come, that can't be seen yet (or that I am currently just too dumb to see) then yes, there would be room for another moment of Christensen's disruption to happen and all incumbents - including Apple - would be in danger. But there comes a point probably in every technology when it just reaches the kind of saturation in its utility. Which gives the other possibility.

What if there is no more radical disruptive change coming to the mobile phone handset. From here on out, it is only evolutionary changes, no more revolutions? That moment WILL come at some point. Look at personal computer. It evolved tons early in its stage, until Toshiba gave us the laptop form factor, and then a few iterations of laptops to get color screens and hard drives onto the laptops, and suddenly there is no more 'revolution' from the laptop of 1997 to 2017, the form factor is the same. It has only been evolution since, no more revolution. Screens are bigger and brighter and are of a slightly different aspect ratio, and the internal performance has kept pace with Moore's Law so the laptops of today are MASSIVELY more powerful, but that is EVOLUTION, not revolution.

Look at the car. The first modern car was the Cadillac a hundred years ago. It had four wheels (some early cars like the original Daimler Benz had 3), it had a petrol engine in the front, you drove it by steering wheel, you had the pedals by which you gave it gas to go, it had lights, it had a transmission, it had a body, it had an electric ignition so you didn't need to go out and turn a crank to start the engine. Since then there is totally consistent clear evolution where cars of the next DECADE are similar in appearance to the previous decade enough to know the TYPE of car or vehicle even a decade later. Gradually cars evolved to be less tall, the tyres became wider, the bodies became more streamlined. Some technology was added later that would help make the car easier to drive or safer from automatic transmissions and anti-lock brakes to seat belts and airbags. It wasn't until this decade that the rival idea (that existed 100 years ago) of the electric car became a real potential rival to replace the petrol-engined car. But the INDUSTRY lived through a CENTURY of stability (in terms of the technology and design of the device).

Look at housing. The basic one-family house has remained constant as a design concept, we go in through a door, we have a heating system in the belly of the house, we have some indoor plumbing and electricity. There is a 'bedroom' and a 'kitchen' and a 'living room' etc. This idea was stabilized what 200 years ago. Some new things were added but the concept of the 'house' or home hadn't changed by revolution since I guess indoor plumbing. And the apartment house was a stack of those private houses built on top of each other, in standard forms, where some utility was shared (like a central heating element for the whole apartment building) and you add the staircase or elevator. But apartment houses built 100 years ago are still perfectly usable today, as long as they were built structurally sound enough to be still standing today and safe to live in haha.

I do think we have arrived at this second option. The smartphone form factor and consumer experience has now reached a (relatively long) period of evolution without revolutions. If so, then there is no 'chance' for a disrupting rival to enter, and the only way you fight yourself to the top is by steady consistent marketing strategy. How Toyota overcame the American rivals to become the largest car maker; and how Volkswagen Group then overtook Toyota now. An industry that keeps consolidating, smaller brands are eaten up by the larger brands (Jaguar, Volvo) or extinguished (Saab, Oldsmobile). And the most cost-effective mass manufacturing will tend to give the best opportunities to growth (Tata, Hyundai). Oh, and China will have its own series of brands that nobody else seems to even know about (Geely, Chery). I think the automobile industry of the past say couple of decades, is a good analogy for what is ahead for smartphones.

At some point it is likely that the electronics to enable a smartphone functionality will be so tiny, that the 'handset' vanishes and becomes just some jewelry or cosmetics or is eaten or worn in some way. So it is possible that the phone form factor DISAPPEARS like say answering machine physical boxes disappeared when voicemail function was transferred from the residential home answering machine box, into the telecoms operator's service provided via the network. In that way we may see an end to the handset. But 'revolution'. I am doubting it but not ruling it out. I would LOVE to see one more stage of total revolution for our smartphone industry. But get used to it, the phones 5 years from now, they will look like the iPhones and Galaxies of today, only slightly more powerful with a bit larger screens etc..

...my thoughts for today...

Tomi Ahonen :-)

Tomi T Ahonen

Hi Everybody

Meanwhile on the market size. Strategy Analytics had same Top 5 as IDC but their market size was 20 million bigger, at 393.0 million total units for Q3.

Tomi Ahonen :-)

Winter

Real disruption that would threaten current smartphone makers? A tough one. Here are my guesses in the mobile space:

1) Screenless phones.
You do not look at a screen, but you project your screen
directly into your eyes like an overhead projection, or
better, using a computer-brain link.

2) Your handset become a fully functional AI agent. You do
not use your phone, your phone really behaves like a human
personal assistant. It will arrange a movie/game evening with your
friend(s), organizes their transportation, order the delivery
meal with favorite choices of all the guests. After you
finished your meal, it will switch on the large screen with
the movie of choice and set the lights. (you get the idea)

3) You enter the Borg with your handset.

I expect only 1 to be disruptive, because it will change the gadget itself. 2&3 could be evolutionary.

E.Casais

Tomi,

You have identified and discussed the main technical parameters that determined the big shifts in mobile phones so far: processing capacity, communication performance, interaction mechanism (e.g. display).

Mobile phones belong to the computing industry, but you forgot one essential factor, which was at the core of many, many disruptions in the computing industry: persistent storage.

Winchester-form-factor hard disks were what enabled the advent of workstations, and diskettes the advent of PC. Cassette tapes gave rise to the Walkman. VHS completely changed TV viewing, and DVD disrupted the cinema industry. In turn, cheap flash storage enabled digital cameras and smartphones.

If there is a disruption pending, it will take place in the area of persistent storage.

Think about a new technology that replaces flash, and provides orders of magnitude denser persistent storage for the same energy requirements. Currently, top of the line devices provide 256 GB storage capacity (via a combination of internal and card memory). Imagine 256 TB. Many things will change or become possible.

Ever heard of Gordon Bell's pioneering life-logging work? Basically, it is an attempt of recording everything taking place in his life, day after day, hour after hour. I do not know what purpose this could really serve, but a novel storage medium would definitely enable a seamless life-logging with a mobile device.

Think about week-end hiking: with all its sensors (existing as well as new ones) your mobile could record a 360 degrees, high-resolution, possibly holographic archive of your entire trip (kind of a super-duper GoPro device). Notice a rare flower, or a difficult to see bird? Take a high-resolution, high-zoomed view and annotate it (vocally) with exact GPS coordinates. That would require huge storage capacity -- local of course, uploading via a mobile network, even 5G or 6G will not work (too heavy, too expensive, too low operator caps).

With such local storage, mobility will return to a full computing centric device. Currently, it is going into a terminal-like direction: smartphones are increasingly geared to rely entirely on the cloud and apps to access, retrieve and store information (whether iTunes, Dropbox, GoogleDrive or whatever), including personal information (the demise of removal storage and local connectivity options in high-end smartphones bears witness to this trend).

With a massive, cheap local storage capacity, one can return to using the cloud to access information only when needed (via comparatively expensive mobile networks), and keep everything personal (such as life-logs) locally. Backup strategies will have to change accordingly. Local connectivity to save or exchange vast amounts of data will have to be beefed up. It will not please Google, Apple, or Microsoft who thrive on analysing (and at least for Google and others, reusing) customer data stored in and transiting through the cloud.

Several firms like HP, IBM or Intel are hard at work trying to figure out the next generation of persistent storage, as the technical limits of flash are already foreseeable (we are not close from reaching them with products on the marketplace, but engineers in labs already foresee them).

So this is my bet on the next disruption. I suspect everything mentioned (by Winter, Tomi and others) will ride on it. Current AI requires loads of stored information to "learn", for instance. It is not enough to have a personal AI machine in the mobile device -- one also needs the vast amount of data (which can be collected according to one needs, with the mobile device) to train it. AR and especially VR require lots of data to create (partially or totally) a universe. Current strategies for autonomous vehicles go for exhaustive, detailed 3D maps accurate to the centimer. And so on, and so forth.

Interestingly, none of the major smartphone players is a major player in storage -- except Samsung...

Abdul Muis

Oppo & Vivo were big in Asia.
At least in China, India, Indonesia, Malaysia, Philippine, Singapore....

Oppo & Vivo is the one that made xiaomi sell the phone offline. Because good and affordable doesn't have to be hard to buy... (Xiaomi concept of selling phone online only with a flash sale).

Oppo/Vivo is very good with their distribution strategy.

Winter

@E.Casais
"So this is my bet on the next disruption."

With disruption, you expect an upheaval of the market, with new brands entering and old brands disappearing. But everybody can add more memory to a phone when it comes to market. So, lightweight GB harddisks did not revolutionize computing, but instead revolutionized media players with the original iPod. Large touch screens revolutionized feature phones, not gaming or media players.

So, your high persistent storage will change applications and connectivity. However, that can all be build into the current form factor by the incumbents.

However, a fully functional smartphone in an earring with some "magical" direct-in-your-eye projection (and stereo vision recording with two earrings), that is something new. Especially if it has access to all your data, private and professional with AR/VR manipulations (and, obviously, some kind of dictation with a silent speech interface). And even that would not be disruptive enough in my view.

For a real revolution, we would need a new technology, say, some easy brain-computer interface, or fully functional hands-free AR/VR.

Actually, I think the real disruptive crisis will be ultra-high capacity batteries with the energy density of gasoline. But that has nothing to do with mobile.

Abdul Muis

https://i.pinimg.com/736x/21/ed/bd/21edbdd0ff547f8083b98a0512e33aaf---years--s.jpg

Jim Glue

I concur, Tomi. I think the current pocket computer that can make phone calls....is a stable form. If any of us could REALLY see what's next, we could become billionaires.

I think it will be pervasive computing that could disrupt smartphones. AR/VR glasses would just be add on's....but if you had computing "everywhere" you wouldn't need to carry around your own personal one. Smart houses, smart walls and the like.

The smart watch could eventually be viable for computation...but you still have to have a screen. Perhaps that's the evolution. The computer (which is what a smart phone really is) can be on your wrist or in your pocket and power any screen that is convenient. This might be a step along the way to pervasive computing.

Of course, if some type of holographic projection can give you a screen "in the air" at any time...that would free up the form factor of the glass slab in your pocket.

But there are some fun and exciting steps along the way to that day.

AR is going to be truly exciting even with today's glass slab form factor. And some time in the next 10 years we will have "Google Glass Two" that will finally deliver a screen that people will want to put on their face. Of course, it will probably come from Apple :)

Mobile VR should be exciting for gaming. Not today's version of putting your phone on your face...but using the pocket computer to drive a real immersive VR headset. There interesting industrial, tourist and other uses. VR will come to powerful stand along computers first...but in time, the pocket slabs should be able to handle that as well.

There is a long way to go with camera improvements. I'd really like my phone to truly play side by side with a traditional DSLR camera. Work with external flashes. Have lenses. Be excellent in low light.

As to the Chinese, I keep wondering what's taking them so long.

Winter

@Abdul,

So true. I am old enough to remember the first airing of Star Trek Enterprise. Back then we marveled at these impossible SciFi gadgets from the distant future. Now they look so,... big and clumsy.

E.Casais

@Winter

"everybody can add more memory to a phone when it comes to market."

Only when it has become commoditized. The first movers will have a serious advantage. And they are not called Apple, Amazon or Google.

"lightweight GB harddisks did not revolutionize computing"

They did. In the second half of the 1970s, 5" disks allowed new types of computers, away from the mainframes with their huge disk packs.

"instead revolutionized media players with the original iPod."

The real revolution was the walkman, with cassette tapes. The iPod was an evolution thereof based on flash, after the intermediate evolution based on CD and mini-CD. Nothing truly revolutionary there.

"that can all be build into the current form factor by the incumbents."

The point is that this will enable _new_ form factors -- and not necessarily by the incumbents. Nothing prevented using Winchester disks on mainframes -- but they actually sent the personal workstations and affordable LAN-based file servers rolling.

"an upheaval of the market, with new brands entering and old brands disappearing."

And that is exactly what may happen with very miniaturized, very high capacity storage. New entrants controlling the technology will play a dominant role. Incumbents whose business model is based on a terminal-orientated, cloud storage-defined service provision (Google, Apple, etc) will be upset.

"some "magical" direct-in-your-eye projection [...] is something new"

I remember that those direct in your eye devices were already a thing some 20 years ago. They did not thrive. The closest to a comparable mass-market offering was Google Glass. It did not thrive. As you mention, were it even successful, such a system would entail "stereo vision recording" and "access to all your data" -- and we are back to massive storage. This is the key that will enable those form factors. Nothing will be really feasible without it.

In essence, what are Google, Apple, Amazon, Netflix, Microsoft, Facebook and all new Internet firms basing their services, and existing and future business on? Humongous storage capacity. Just imagine cheap, massive storage suddenly migrating to the client side -- and it is pretty clear that some upheaval will take place on incumbents. Storage is not glamorous, but it is a fundamental driver of disruptions -- in mobile as elsewhere.

Tester

I don't think that a full revolution is needed here to upset the playing field.
That will happen all by itself once the current premium prices have to go down. All of a sudden that would mean that those participating in that segment will lose a lot of their profits.

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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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