A Bloodbath for 2010: the Smartphone market preview

The big battle this year in mobile will be in smartphones. Not because of reasons many pundits and analysts now suggest, that somehow this is that everybody caught the iPhone fever or that Google somehow energized the field with its Nexus phone. No, those are overhyped views with an overly US-centric view. Remember that differing from most high tech and media industries like computers, TVs, air travel, advertising, military spending, music, movies, rocket science etc, where the US tends to reflect about half of global spending of the given industry. That is not so in mobile telecoms. US cellphone users (about 285 million subscriptions) represent only 7% of the global subscriber base of 4.6 Billion. While Americans are now getting heavily into smartphones, Forrester just today reported that the total installed base of smartphones in the USA is only 17%. The EU projects that for the EU region, smartphones will be half of all phones this year.

While the American pundits, journalists and analysts obsess about the iPhone, Palm, Google etc devices, that is not the main battle. Its a side-show in the big global fight for smartphones. And while some North American players are indeed quite strong - RIM is the world's second largest smartphone maker behind Nokia - this battle is now heating up considerably for 2010. Some very powerful players are bringing in their A-game. And both market leaders, Nokia and RIM have refocsed very hard for this upcoming battle to be able to respond to the challenges. Most other smartphone makers have not caught on. The battle will be brutal this year. It will not be pretty.

NOKIA

The reports of Nokia's demise were premature. Even Nokia's own analysis got it wrong for the third quarter of 2009 when they reported a serious decline in their market share. After all numbers came out, turned out that Nokia had had only very minor 1% fluctuation in its smartphone market share, and as is usual, Nokia's smartphone market share remained well above its global handset market share, itself the best in the world.

Last year analysts were not impressed with the N97 and then there was confusion about Symbian vs Maemo and what of Nokia's Ovi store for apps and various smartphone content and services. So where do we stand? Nokia's market share in smartphones is as big as number 2 and number 3 combined, and more importantly, Nokia's smartphone market share is better than its overall handset market share. And they are doing this with a mobile phone manufacturing juggernaut which has been profitable every single quarter of the decade, while each of their big 5 rivals has struggled and posted numerous unprofitable quarters along the way (the last quarter Nokia posted a loss, but not with its handset unit, the loss was due to its infrastructure unit NokiaSiemens Networks). Typically at least 2 of the rivals are unprofitable and in some quarters all four have been so.

Do not put any credibility to any "Admob" stats or pay too much attention to Nokia 'failing' in the US domestic market for smartphones. If the choice is to be the desired smartphone brand in the 93% of the world's phone market that is not the USA, or the 7% that is the USA, Nokia has certainly made the right call to its strategy.

But it won't be easy going. A couple of years ago, the Symbian operating system was owned across several giant handset makers (Nokia part owned with SonyEricsson, Samsung, Motorola etc) and had over 60% market share. Now being only Nokia's owned operating system, its installed base is about 50% of the world's smartphones and currently sell a little over 40% of the world's smartphones. Note that most of that decline was various non-Nokia phones shifting away from Symbian. Nokia's own Symbian sales level is very stable. But it is not growing, it is in slight decline. So don't mistake Motorola and SonyEricsson and Samsung (and others) shifting away from Symbian as somehow a 'Nokia decline' in Symbian. Nokia Symbian is still very healthy at or about 40% on an annual sales level.

What is Nokia doing? While it introduced Maemo to power high end smartphones, Nokia is aggressively pushing the Symbian system down to mid-price phones where 'feature phones' used to be. It is expanding its proportion of touch screen devices (to position more against the iPhone) and more importantly, expanding its proportion of QWERTY phones against the Blackberry. Some very promising news came out of the UK this past December, that Nokia is back as the top preferred phone brand among UK youth in the Mobile Youth survey of phone brand preferences.

Most of all, any analysts should keep in mind, that thephone market is not an open 'free market'. There are severe distortions by the enterprise/business segment, and the carrier/operator subsidy model in many countries. I explained these in my blog about smartphone market share secrets last year.

The key point to take away, is that Apple says openly that its best markets are in those countries with strong operator/carrier subsidies. They do not do as well in markets where customers pay full price for the phone (the real price of an iPhone 3G on AT&T is not 100 dollars, even Americans pay the real price of about 600 dollars for their iPhones, but the remaning nearly 500 dollars is hidden payments in the 2 year payment plan). Meanwhile, in every single market that is open, ie carriers do not subsidise most phones and the phone makers get to sell their own phones directly - and which are not controlled by a domestic maker or makers (like in South Korea for example) - Nokia is the run-away market leader in all phones, and in smartphones. For any analyst who suggests Nokia is 'losing' the game against the iPhone, that should give some pause. In all markets where there are no subsidies to distort the picture, Nokia wins hands-down...  And Apple itself admits it struggles in precisely those markets. Who makes the "most desirable" phones when we take price into the equation? Not necessarily the single best phone for internet surfing, but rather a series of phones to suit mass market tastes? Thats Nokia, hands down. As big as number 2 and number 3 combined.

Even with all that, expect Nokia not to grow market share this year in smartphones, and very likely to lose some in 2010. The competition is coming from every angle and the big leaders will likely feel the heat. Nokia has been aggressively moving downstream in price and gets some solace that its price points are difficult for smaller brands to match, but its going to be a very rough year. And whether any newcomer focuses against the iPhone or the Blackberry, they will automatically also then target some part of Nokia.

RIM

The amazing untold success story, far bigger story than Apple, is RIM. Blackberries were nerdy US centric business phones only a few years ago. Europeans and Asians would not take to the flat, wide, weird Canadian phones. Try as they might, even as American conglomerates took to Blackberries by storm, and started to call it the Crackberry - 75% of American business/enterprise smartphones are Blackberries (says Ostermann survey in 2009)

The rest of the world did not fall in love with Blackberries. But RIM plugged along and slowly got traction in many markets in the enterprise/corporate space. They did particularly well in Latin America. But then came the SMS texting craze even to American shores, and whether by design or by accident, the youth of the world discovered the Blackberry. Not your boss's phone, but your kid's phone. And success followed. About at the same time, again perhaps by design, perhaps by accident, RIM expanded its product line of Blackberries to more models and several of these were more suited to consumers. RIM added cameras to these, and what businesses previously were reluctant to accept - cameraphones - started to infiltrate the business phone space. But now the Blackberries were very well suited for consumer use.

First the overall numbers. Today one in five smartphones sold - actually already 21% by the third quarter of 2009 - was a Blackberry. Remember that only 17% of smartphones are Apple iPhones. Why all that hype about the Apple and total silence about the Blackberry? Partly because this success is on strange foreign shores. In Venezuela the bestselling phone brand - not smartphone brand - is the Blackberry. In Indonesia the youth most popular phone is now the Blackberry. In the UK survey of university students, UK is traditional SonyEricsson and Nokia 'back yard' - Blackberry is now the third most popular phone brand, not the iPhone.

On RIM, this is the only brand I can promise you, it will grow market share in 2010. Why? Because first of all, it has a 'lock' on the enterprise/corporate market. The business phone market will not shift simply because there is one hot new smartphone this quarter, like a Palm Pre or Motorola Droid or iPhone 3GS or Google Nexus One or Nokia E72. The business phone market is incredibly stable because business customer IT departments resist any change and any new systems to be added and to be supported. In the big US market, Blackberry can very safely rely on something nearly 75% of all business smartphone sold this year. It may fluctuate a little up or down, but it is incredibly stable.

At the same time, the Blackberry keeps making more inroads to business phone use in all other markets, due to its incredibly well optimized business oriented form factors, solutions and apps and services. The Blackberry is simply the best enteprise phone solution on the planet. Now they have President Obama as the ultimate unofficial spokesman, the Blackberry President. They have achieved such certifications as NATO level quality of security on their device so for any business users, this is really a secure and safe platform. Their non-US global business-oriented smartphone user base will grow disproportionately well, rivalled only by Nokia with its E-Series. This market share segment will be particularly secure from any inroads by any new operating systems like the Apple iPhone or Google Android or Samsung Bada. Not because the phone is bad, but simply because IT departments will fight tooth and nail against any new OS. A survey by TBI Research in 2009 found that 80% of US businesses refuse to have more than one operating system for smartphones - and in most cases that is now the Blackberry. This is an incredibly stable source of revenue and unit sales and subscriptions for RIM.

But its huge growth is that successful transition from business phone to residential phone. And while all the press, analysts, pundits and 'experts' obsess about touch screen smartphones, the truth is that far more QWERTY phones are sold worldwide than touch screen phones. The internet use is not addictive, but SMS text messaging is addictive as proven in university studies like the one at Queensland University of Australia. So while both inputs are of course desirable and have their proponents, the fact is, that QWERTY trumps touch screen. Why is Nokia now rolling QWERTY keypads to its cheapest non-smartphones? Nokia know this, they invented the QWERTY keyboard in the world's first smartphone, the Communicator 9000, and they were the world's first entity to suggest SMS might be addictive, a decade ago. Nokia know this.

But RIM have optimized their phones for mobile messaging. It is a perfect starting point. Then they have the Blackberry instant messenger, which appeals to the youth in particular as it offers free messages between Blackberry users. That in turn brings in a contagion effect, you want to have the Blackberry specifically, because your friends use it. And then there is the cool factor, suddenly the Blackberry is the phone all older teenagers and young adults want to have. RIM is right now in a sweet spot, all things going for them. It is no surprise, that in the shadow of the world's most spectacular high tech launch ever, the iPhone - RIM has consistently outsold the iPhone and grown its own market share.

I can tell you that often analysts and pundits even in the various early adopter markets like say Indonesia, where Blackberries emerged as the youth 'must-have' phone, inspite of their considerable cost differential above typical youth phones; the early experts were dumbfounded and could not explain it. I have heard various RIM experts say the same, that they are not sure exactly how and why, but are trying to learn this as much as possible and then capitalize on this knowhow.

I think it speaks volumes that Nokia is copying RIM not only with E-Series form factors, but now with cheaper non-smartphones adopting QWERTY keypads. Both RIM and Nokia know that the biggest single segment of the smartphone battlefield will not be touch screens, it will be QWERTY phones. And I would hope that at times the operators/carriers would be reminded of this too - that AT&T and O2 and other networks complain about congestion with the iPhone, but QWERTY Blackberries and Nokias do messaging, very profitable services for the operators... So its in the core profitability interests of the operators/carriers to promote QWERTY phones, not touch screen phones.

Anyway, all signs suggest that Blackberries are achieving 'must have' status among the youth. Youth fashions and desires can be fickle so this is by no means a guarantee of long term success, but for this year 2010 this bodes very well for Blackberry. As they are very secure to hold onto business/enterprise customers and see growth in youth markets, they are sure to pick up some market share points even in this very competitive year of 2010.

APPLE

Apple is also growing strong currently. They have been expanding their global footprint but it is a worrysome detail, that out of all iPhones ever sold, 43% have been activated by AT&T (Said AT&T late last year). The iPhone is the darling of Americans but doesn't seem to engender the same level of passion across the oceans. Yet 17% of all smartphones sold in the third quarter last year were iPhones. That is very good news for Apple and they keep growing year on year. Remember that as Apple only introduce one new model per year in June, they have that peculiar sales pattern where their sales grow in the second half of the year, but then always decline stronly in the first quarter of the new year. So don't be alarmed, but be prepared, that when the January-March quarter sales numbers come out in about April of 2010, there will be inevitably a decline in Apple market share. That is not a sign of trouble, it is only because the 3GS will be 9 months old by then - near-obsolete in smartphone terms - and the next iPhone is not due until June of 2010.

But its not going to be an easy year for Apple. The early strongly operator/carrier subsidised markets are all now 'done' and have the iPhone. As Apple tries to bring its ultra-expensive superphone to ever less affluent markets, it finds it hard to sell meaningful numbers. China is a perfect example, Apple was really struggling to get its iPhone to move in any relevant numbers in China. And its strategy of going with an exclusive carrier/network in major markets is backfiring (as I predicted) and they are now expanding networks in many markets. There is continuing speculation that the exclusive deal with AT&T will end as well.

Most of all, Apple faces severe competition in the consumer space. The 3GS was a good phone last summer but now is really showing its age already. 3 megapixels is very modest for a 600 dollar smartphone where other brands do 8 megapixels and in advanced markets like Japan and South Korea 12 megapixels is now the standard for premium phones. A flash? When can we see that? And no removable battery, no memory slot, no QWERTY keyboard, etc. Apple is seeing a lot of business going to near rivals who also offer 3 inch touch screens but in many ways 'better' features. And please Apple fans don't write about that. Yes, the Apple is by far the most user-friendly phone. But that goes only so far. And at some point Apple has to release more than one phone model per year else its market share growth will stagnate. I believe this year 2010 will drive that lesson home to Apple HQ loud and clear.

Anyway, Apple needs yet another hit this June. If they manage once again to do a magical phone that everybody loves, they'll be fine to the end of the year. But in 2007 when there were very few phones of a similar form factor, Apple had this 3 inch touch screen market segment to itself. Today every major maker offers 3 inch touch screens, and the competition is proving rough for Apple.

What is certain, is that for the start of the year 2010, Apple's market share will sink of course, due to an aging model line. Will it recover for the second half of 2010, will depend on how amazing the next iPhone will be (it will definitely be better of course). But now most new rivals are all targeting this Apple area - not the enterprise space where RIM is, and not the low price angle where Nokia is. The new competition will almost all hit Apple square center. Like the Google Nexus One right now.

I would say for the year, if Apple can hold onto its market share - remember the smartphone market itself will explode this year -so there is going to be a lot of organic growth for those who can hold onto market share, so that is still good news. I don't see much chance for strong growth, but it does depend on that one new iPhone model next June. It could be a 'must have' phone perhaps. I'd say the single best tool for Apple would be a QWERTY keyboard but I've been saying that since 2007 and of course Apple don't listen to me haha...

HTC

The fourth largest smartphone maker is not SonyEricsson or Motorola, it is Taiwanese HTC. They manufacture for example the Google Nexus One. But even before there was an Android operating system from Google, HTC was the fourth largest smartphone maker with about 5% of the market. HTC has often struggled with the lackluster performance of Windows Mobile - HTC was the launch smartphone for WinMo early int the decade (after MS suddenly pulled the rug out from under their first-annnounced WinMo launch handset maker, UK based Sendo, if you remember) - and HTC has been WinMo's standard-bearer ever since. HTC CEO said in 2009 that 80% of all WinMo phones ever made, were manufactured by HTC. So now that HTC is shifting most of their smartphones away from the Microsoft operating system to Google's Android, is coming as a very hard hit to Microsoft.

So HTC was already plugging happily along in the fourth place, and now they have been increasing the awareness of their own brand, and then they have the sudden added support of the Google brand. This is sure to bring growth to HTC.  How far can they grow? They are perceived as a small 'built-to-order' maker, and don't have the brand appeal of the Samsungs and SonyEricssons in the eyes of the big mobile operators./carriers or the independent handset resellers in open markets. But they are now on a good growth path. I think they're a pretty sure bet to increase market share in 2010.

FUJITSU

So the fifth biggest smartphone maker is Fujitsu out of Japan. What? You never heard of Fujitsu's smartphones? Thats because they mostly focused on the home Japanese market the past few years. In Japan the major smartphone platforms are Symbian and Linux, but most smartphones are 'crippled' by the operators/carriers with standard features and often the user cannot install apps like they could on a similar device in most other markets. Still, as a smartphone maker, Fujitsu is experienced and big. Plus they are one of the biggest makers of laptop computers so they have that synergy in distribution chain, brand and tech support.

What can we expect out of Fujitsu. Last year they said that they are going to refocus on the world market. Expect Fujitsu branded smartphones to appear in selected markets during the year. They are a luxury brand sitting right next door to China, it would sound like a good strategy to push into China. Japan often looks at Taiwan as their back yard, so its another obvious early target market. Beyond that, it will probably be random markets this year as they sample world tastes and see which markets would be receptive to the Fujitsu brand of phones once again.

Fujitsu have the advantage of learning about end-user preferences in the single most advanced mobile phone market, Japan. So they can bring ideas and innovations and technologies that have an advantage. I would expect that Fujitsu will be targeting initially the top end of the smartphone market, nearer to netbooks and web tablets, and going of course head-to-head with the Apple iPhone line. But if they can hold steadily onto about a 4% global market share in smartphones simply by selling in Japan, and now start to expand, expect them to grow organically at least a few percentage points globally.

SAMSUNG

Samsung had been giving smartphones lip service for many years. They had smartphones on just about every platform, on Symbian, on Windows Mobile, on Android etc. Now they have decided that it is a battle they want to enter and to win in it. And they have made that strategic commitment of releasing their own smartphone operating system, Bada. Samsung had previously held something like 3% market share in smartphones, but - in feature phones with touch screens - they already outsell the iPhone. All Samsung need to do, is to switch their touch screen phones from their proprietary operating system to Bada during 2010, and they will exceed the iPhone annual sales in smartphones... 

If executed perfectly, Samsung would seem to appear out of nowhere and in one year leapfrog Microsoft Windows Mobile, Google Android and Apple iPhone. Don't be surprised to see this happening. The South Koreans are nothing if not competitive, and they work day and night and weekends to achieve their objectives. And Samsung says in every market they intend to be one of the top 3, or its not worth competing. They have the scale to do it, and I am very confident within at least 18 months they will overhaul those three, lagging only behind RIM and Nokia. Whether it happens in 2010 remains to be seen how far Samsung is along its diabolical world domination plans. But they will certainly grow every quarter this year once the Bada phones are launched. Grow every quarter, mark my words.

I expect that during 2010 Samsung will push its Bada operating system aggressively to its mid range feature phones, and by converting these to 'smartphones' - they will achieve the most amazing market share growth ever seen in the smartphone space. Yes, in some ways its a bit of 'cheating' with accounting, but it fits the smartphone definition and Samsung will be grabbing headlines. As these will predominantly be touch screen phones, it will be seen as being head-on battle against the iPhone, even though in price it will more appropriately be a battle against market leader Nokia.

SONYERICSSON

A bit player in the smartphones space, SonyEricsson was one of the first major smartphones and has had very high end prestige and popular business and residential phones in that area, but only a tiny part of their total lineup. Since Sony released the Walkman and Cybershot brands to the SonyEricsson partnership, the SE phones have been in the mid-range of excellent dedicated musicphones and cameraphones. But the advent of the iPhone decimated SE's musicphone market and the brand has been struggling severely to find a place recently. SE has been losing global handset market share and its smartphones have suffered in that same process. Even that news out of UK university students preferring SonyEricsson as the second most popular phone brand is actually bad news for SE, as previously SE was tops. They are moving down in preference among even the youth. All news is bad news at SE.

Recently with the Symbian OS shifting to Nokia ownership, SE has little reason to particularly push Symbian in its smartphones and is shifting to Android. But the total shipments are low in numbers and the total brand is in confusion. I don't see SE particularly growing. They have to stabilize their overall handset market share first, and then worry about smartphones. This could be a good year for SE to ignore the wars in the smartphone bloodbath and find attractive niche markets elsewhere and stabilize their profitability. I've been saying dfor years now, that what SE needs is the Playstation phone, which could be a hit product. Remember that most of the paid apps on the iPhone are games. But yes, if the PSP  phone appears, SE could have a sudden surge. Else - and more likely not - I don't see them as growing. They will be in the 'other' category of smartphones and mostly ignored.

MOTO

Poor Motorola. They are so on the ropes. I wrote my open letter to them, that they should do SMS texting optimized phones to save the company (something RIM ended up doing and growing magnificently). But Moto have staked the whole company on one Android phone, the Motorola Droid, and now 'Do no evil' Google has stabbed them openly in the back with the Nexus One. Motorola is doing its best, but their global handset market share has been in total freefall for years - they have gone from 22% to 5% in three years! - and they now are feeling the breath of RIM in their neck, a pure smartphone maker who may overtake Motorola in total phones shipped some quarter this year.

It was a risky move to make a heavy move into smartphones. The Droid is not going to make meaningful inroads into the enterprise space for the same reasons that RIM owns that space and others can't get in. So the Droid has to fight it out in the high end of the smartphones, against the iPhone and high end smartphones from Nokia to Google to HTC to Fujitsu to Samsung to Palm to just about anyone..  But it was a popular move to US based investors, so Moto made its bed and now must sleep in it.

I don't see Moto having much chance outside the US market in this heated contest, to peddle its smartphone to consumers who had grown very tired of the Moto brand the last few years. Not in this year with so many exciting new smartphones appearing in the same price bracket. And the US market is not big enough to give Moto the gains it needs. I see Moto overall losing handset market share and being irrelevant in the numbers of the smartphone battle. Incidentially, ZTE out of China as a non-smartphone basic phones maker is about to pass Moto as the fifth biggest phone maker, so the fall from grace continues in any case, Moto is headed to the waste basket of the industry.

Motorola may appear on the charts for US smartphones with some market share, but nowhere near market leader RIM or second place iPhone. Too little too late. When will Moto close shop? At Forum Oxford we have already a Motorola death-watch... They are certainly already on the ropes

PALM

Palm sells only about 800,000 smartphones so apart from being a curiosity in the US market, they are irrelevant in the big picture. They don't account for one percent of the market and have essentially no chance of growing market share in this bloodbath of a year in smartphones. I would not be surprised if Palm passes onto history during this year.

LG

A more interesting player in smartphones is LG. LG is the third biggest handset maker out of South Korea and like Samsung, they have pretty much ignored the smartphone space. But - remember the original 'amazing' looks of the iPhone? That totally radical one button touch screen flat 3.5 inch screen wonderphone when first shown by Steve Jobs in January 2007?

The looks of the iPhone, exact dimensions, etc, were considered in January 2007 to be a copy of an industrial design winning LG phone - from 2006. Apple designers cleverly copied an award-winning LG design to create the 'wow' factor in 2007, because LG had not brought this phone to the Western markets (we eventually saw the consumer version of it as the LG Chocolate, released in Europe before the iPhone launched in the USA in 2007). So LG knows fully well how to do this type of phones and form factors. They just haven't bothered to do that as a "smartphone" so far. But the LG Chocolate was Europe's bestselling phone at one point in 2007 and in its lifetime has sold more units than all iPhones.

If LG feels like they'd want to have a major market share in smartphones, they could do the same as Samsung, introduce a smartphone OS to the next edition of the Chocolate and having a far cheaper phone of the popular touch screen and 3 inch screen form factor, they could easily outsell the iPhone 'as a smartphone' within about a year - to 18 months. But that 'step' is not even taken yet, as Samsung did announce its Bada operating system and will clearly now fight for the smartphone space, LG has not made any such bold announcements. At the CES this week LG has introduced two smartphones and they made noises that they'd like to get more market success in smartphones. If they so desire, they can become a massive global rival in no time. Remember in scale as a handset maker they already are far bigger than any North American phone makers including Palm, Apple, RIM and Motorola.

OTHER JAPANESE

There are actually seven handset makers out of Japan and several have expressed interest last year in moving abroad, or 'returning' to the overseas phone markets that the Japanese brands (other than Sony/SonyEricsson) abandoned a decade ago. Some of the brands will not be doing it as smartphones but some may. We have powerhouse electronics brands there like Panasonic, NEC and Sharp. And the biggest of the Japanese handset makers is Kyocera. Any of them may find it suddenly appealing to capture part of the limelite in smartphones and do a nice little splash some time in 2010. But I don't see them taking big market shares in smartphones but keep an eye out for the GSM World Congress in Barcelona in February for any surprise announcements.

DELL

Doesn't it seem like every PC maker is suddenly doing smartphones? Dell is also in the game now. They will be releasing their first smartphone in America on the AT&T network. Dell will struggle severely for early years in their entry, in building carrier relationships with the 160 or so significant mobile operator/carriers and the 600 overall; as well as hundreds of national resellers in so many markets. They will find that the smarpthones market is totally different from the PC market and that normal free market rules do not apply. And that to get scale, they have to move downstream and diversify fast - like Blackberry has done. I don't see them being a global powerhouse yet and won't register in the one percent market share range this year, but they are yet another brand doing high end internet-oriented smartphones (against the iPhone).

GOOGLE

Google's entry into the smartphone space is seen by some as going back on their word (that they do not intend to be a phone maker), and by others as stepping severely on the toes of their Android handset maker partners. The Google Nexus One suggests there will be a Two and more, so it seems like Google has made a strong commitment to become a handset maker brand, whether their phone is physically made by HTC or not.

Initially the Nexus One is energizing the US focused tech media and analysts into a frenzy but I would think this will subside. It is a phone positioning at the iPhone end of the consumer market, as a pure touch-screen device and labeled a 'superphone' in the US market, it is already attracting direct comparisons to the iPhone. Price wise its conveniently 10% cheaper. But Google has the advantage of not limiting the Nexus to one carrier only. And quite alarmingly for the iPhone US market aspirations, the Nexus will be both in a GSM and CDMA version (T-Mobile first, but Verizon version to follow). Google also has the Vodafone networks as reseller partners so it will make quite a splash globally as well.

Because it goes against so many other similar Android devices and tries to fight against the iPhone head-on, I don't see them replicating Apple's first year success of 10 million units, so the Nexus will be very low in the single digits even if all goes well. But behind the scenes, many Android device makers cannot be happy and there is probably a lot of lobbying to stop Google from this path. They may find a device maker revolt and be forced to pull out. On the other hand, most of the Android partners have poor options right now - Windows Mobile 6.5 is not much of an option and going back to Symbian means supporting rival Nokia - Google may well be seen as the lesser of all evils (as opposed to 'do no evil')

MICROSOFT

Microsoft once had 30% of the smartphone market share. Yes thats true. Today they are vanishing fast. They have seen many Windows Mobile handset makers shift to Android and Samsung launch their own OS, so expect WinMo to keep losing market share. The worst news, one could say devastating news was that HTC decided to focus on Android for this year, as they won't do WinMo 6.5 devices and await WinMo 7. Microsoft has promised WinMo 7 will be released at the end of this year but so often in the past Microsoft's launch dates have slipped and the WinMo handset community and developer community have no reassurances that Microsoft has woken up to mobile and is taking it any more seriously now as it has in the many years of the past. (My open letter to them has been read widely at Microsoft HQ but they still don't get it).  

Microsoft has to expend a lot of resources to support WinMo 6.5 and develop 7, all while their market share seems to be cut in half quarter after quarter after quarter. One wonders why they bother, and there is a deathwatch for WinMo also at Forum Oxford already. There is no light in this tunnel and one wonders at what point MS simply decides to throw in the towel and not bother to fight for this dwindling opporunity, especially as the fight heats up so much this year with so many fresh new players and far more modern operating systems.

WHAT OF APPS STORES?

Haha, Apps stores are a total non-story. They do not matter one iota in the big battle for smartphones this year, but you will hear all kinds of silly stats and forecasts and billions of downloads. That will not determin the market success. I told you what decides market success globally in smartphones. I also told you the media's silly obsession with app stores is pointless. But I furthermore said that app stores are a good trend, and eventually, in many years from now, we may have real value out of app stores. Whenever you hear 'app store' mentioned in 2010 safely skip the story, it is meaningless to smartphone market success. Don't fall for the app store hype.

IN SUM

What will it look like after 2010 is done? I see Nokia in the 35 to 40 percent market share range. RIM will grow to the 22 - 25 percent market share. Apple may hold onto about 15-18 percent share depending on how 'awesome' the next June 2010 version of their iPhone is. Samsung is likely to grow at least past the others with Bada to fourth place and will certainly eventually overtake the iPhone, but that I see happening more in an 18 month scale than this year. Still they will be a solid number 4. I'd put them around 10% give or take a few points.

HTC will be the biggest of the smaller players due in large part to Google's Nexus and its brand. It will help sell any HTCs. I would say HTC grows but to something like 6% or 7%. At worst they hold fifth place at about 5%. Toshiba is going to push abroad, expect them to battle HTC. LG is a dark horse, depending on if they go full steam suddenly into smartphones or are happy to do touch screen feature phones.

The other brands will be in the roughly 1 percent or less range including Motorola. SonyEricsson, Palm, some other Japanese makers, Google's own brand (double-counted in HTC above), and Dell. Should SonyEricsson do a PSP phone (most likely then as a smarpthone) that would give SE a big boost. And I'm pretty sure we'll see more PC makers rushing to a smartphone near you, like Lenovo, Acer, HP, Toshiba etc.

It will be a bloodbath in 2010 and we will be keeping score in the media often. The only thing I urge you to keep in mind - the US market is totally not symptomatic of the rest of the world. Only one in 12 phones sold in the world is in America, so don't think the biggest battlefield will be on those shores. No, the big battles at the high end of the price range will be in Western Europe and the low end of the smartphone battle will be in Asia. Those are the markets where this war will be won or lost. But it will be an interesting year in mobile.

Addendum - someone commented asking me to explicitly mention my background, that I have been employed by Nokia in the past and that Nokia is still a customer of mine. That is true, and I say so countless times in my books and on this blog and when I speak in public; but perhaps it again needs to be repeated? I left Nokia HQ in 2001 and my last post with them was the Global Head of Business Consulting. Perhaps I should also state that earlier in my career I was employed by a company that was an Authorized Apple Reseller as one of their Apple/Mac trainers, so I probably also have a strong positive Apple bias. Since 2001 I have been an independent consultant. I do not disclose any customers of my consulting who do not first openly acknowledge their relationship with me. Nokia has been kind enough to do so, so yes, Nokia is one of my reference customers. Out of this list of handset makers, so too my reference customers include RIM, Motorola, SonyEricsson and LG. There are others on this list who have not yet disclosed in public that they have used me. Note that in this blog I am positive of some of 'my customers' (RIM and LG) and negative of others (SonyEricsson and Motorola) and am both positive and negative of Nokia. I am known for speaking the truth as I see it, even when this means that I am critical companies that have given me consulting work. The amazing thing is, they do respect that, and keep giving me more work. But yes, if you need to hear it, yes I am a Finn, I was employed by Nokia up to 2001 and they are still giving me consulting work, as do four other companies in this list.

PS - two items may be of further interest to visitors. A video of my presentation of the mobile industry - nicely showing my slides as well, side-by-side, entitled the next four billion (mobile phone subscriptions to the planet that has only 6.7 billion people and over 4 billion mobile phones) has been viewed over 3,000 times already and many seem to quite like it. Its at this link Tomi Ahonen keynote presentation from Picnic conference Amsterdam.

And for those who would like to read about some astonishing numbers of the mobile phone industry - more cameraphones than digital cameras, more alarm clocks used on phone than stand-alone alarm clocks etc, read my essay on The Nokia Decade.

UPDATE Feb 10, 2010  - The TomiAhonen Almanac has now been released, it has 180 pages, 84 charts and tables (13 more than the 2009 edition) including a whole chapter dedicated to phones and smartphones. See sample stats, first opinions and ordering info at this story TomiAhonen Almanac 2010 Released.

Comments

[Jason Grigsby]

Good stuff as always Tomi. One thing you didn't talk about with the iPhone is the end of AT&T exclusivity. There are strong indications that this is the year exclusivity ends.

I think Apple is banking on growth in the U.S. due to the fact that people will be able to get a subsidized Verizon iPhone. Assuming that happens, there is likely to even be a percentage of current iPhone users who are not only excited by the new iPhone release, but also excited to get off of what they perceive as an inferior network.

FWIW, I not an Apple fanboy trying to defend the iPhone here. Just think there is an element to the market that you didn't touch on that may have some impact.

[Rodrigo M]

Why don't you just disclose that you Tomi Ahonen is a formar Nokia executive and Nokia is a major customer of your research and consulting activities?

[Richard spence]

Tomi

The big problem I have with this analysis is the definition of Smartphone. For me Apple have created the first "real" smartphone. One with an upgradeable o/s, a proper browser that can access the current internet and a way of changing its behavior - installing apps. Nokia/RIM to date do not produce smart phones, they produce *just* phones. You are not comparing like with like.

The iphone is an iconic device because (much like sony walkman did for personal stereos) it defines what a smartphone is. Nokia despite the years of opportunity have just missed the boat. Their market share is huge but it is for phones not smartphones - they have a lot of catching up to do. Symbian is a laughable operating system with poverty stricken, arcane development tools, don't get me started on RIM.

Dismiss the USA at your peril. The iphone has finally put a decent smartphone, with a decent development environment into the hands of American software developers and it is American garage software developers who have led the computer revolution from the 1970s to today. They will create the smart phone and applications services that the world will use.

I speak as a European mobile software developer who has created software services for both Nokia, RIM, Apple and Google Android.

Richard Spence
Bluetrail

[Romain Criton]

Great article Tomi, I'm especially glad to hear about Samsung's bada, which I feel has been largely downplayed by tech media. I too think that Samsung has what it takes to make it a big success, including on mid-range phones, a la Nokia with Symbian. Samsung is very clear about their intentions when they say on their website:
Samsung has developed bada to make these exclusive smartphone experiences available to everyone.

[Romain Criton]

@Richard Spence: well judging from your own smartphone criteria, I don't see where was the novelty in the iPhone:
- Upgradable OS: Symbian phones had it years before. Heck, even Windows Mobile phones were upgradable
- Proper browser that can access the "PC" Web: didn't Nokia have a WebKit-based browser in the N95, which was released before the iPhone ?
- Installable apps: Symbian & Windows Mobile had it from day one. iPhone DID NOT HAVE installable apps until 1 year after its original launch !

Many people believe that Apple has invented a whole lot of tech stuff, but that's not true: Apple integrates other's inventions, make them actually usable and turn them into unique, great products and bring them to the mass market.

It's not about ideas, it's about execution

[Tomi Ahonen]

Hi Jason, Rodrigo and Richard

Thank you all for your comments. I will reply to each individually.

Jason - thank you. Yes, its a good point and something Apple quite needs - to be on 'all' networks in all markets. There are a couple of problems with the Verizon scenario, particularly the one about CDMA. Apple so far has saved a ton of money in not attempting a CDMA variant, and putting all radio research into only the GSM platform. That gives them (with WCDMA/UMTS ie 3G and HSDPA ie 3.5G) the whole world. CDMA would only cover North America and a few selected other countries mostly in Asia and Latin America, amnd often second or third tier networks in those.

In almost all countries of CDMA the migration is away from CDMA to GSM. The fully operational and functional and 'modern' CDMA networks with easily 10-15 years of life left, have been switched off in favor of GSM in countries such as Australia, India, Mexico, Chile, South Korea etc. So for Apple now to put effort into a CDMA variant just to get onto Verizon's network would be tremendous effort for very modest potential gain. Note that going to T-Mobile gets half the gain for no extra R&D as T-Mobile is on GSM.

But regarless of whether its T-Mobile or Verison (and Sprint, CDMA would obviously open Sprint as well..) that would be to Apple's considerable advantage. They saw for exanmple in France that once the networks all started to carry the iPhone, its sales took off. Good point. I think I do mention it in the article but not explicitly..

Rodrigo - ok, if you insist. I added the paragraph pointing out also that I am a former Apple/Macintosh trainer (and Apple fan) and that my current reference customers include not just Nokia out of this list, but also Motorola, RIM, SonyEricsson and LG. I have other customers from this list who have not yet revealed in public that they work with me, so I have not disclosed those names of course. But you can imagine its almost anyone from the top, as also my reference customer list includes the world's largest mobile operator, China Mobile; the world's largest mobile operator group, Vodafone; the world's largest mobile networks supplier Ericsson; the world's largest mobile application developer Buongiorno; the world's largest mobile internet company NTT DoCoMo; the world's largest computer maker HP and the world's largest IT services company IBM. Are you happy now?

Richard - I hear you and I understand what you mean. And there are two points here in your comment. One is, whether Apple had been a transformational (smart)phone - and I agree it has been. We measure the telecoms industry in two eras, the time before iPhones and after iPhones (as I predicted in my blog of the same name). You know this haha.. But yes, so the Apple iPhone did totally transform this industry.

But does that negate earlier smartphones. I think that is completely unreasonable to say so. You know from working with Symbian before the iPhone, that the world's first smartphone was the Nokia Communicator. You also know that the original iPhone 2G did not even fit the modern definition of a smartphone (the newer iPhones do). Just because we have 'better' smartphones now, does not negate the earlier ones. Its like saying only PCs after the Mac should be considered PCs. Come on, the original Apple II is a personal computer as is the original IBM PC (as in the Charlie Chaplin PC) that used DOS etc. Yes, the iPhone made smartphones radically easier to use, and easier for developers to develop apps for, but that is IMPROVEMENT not creation of something.

I understand what you're saying, but I don't buy the argument. Certainly currently there are phones that are easier and less easy to use, and easier and less easy to develop to, but the commomnly accepted definition is that if it has an industry standard OS and users can install apps - whether most users do or not - then its a smartphone. That is the definition used by Gartner, by IDC, by Canalsys, by Nokia, by RIM, by Apple, by HTC, by Microsoft, by Google, by Palm, by Samsung and by Toshiba. I will go by that majority view, sorry, and not eliminate some systems because they are a bit too difficult haha...

Thank you all for writing

Tomi Ahonen :-)

[Jason Grigsby]

To reinforce your point about RIM in 2010, I have to assume that they will release a new browser based on their Torch Mobile acquisition sometime this year. If they do so, expect them to skyrocket up in the metrics that the media (particularly US media) seems to be paying attention to (e.g., AdMob's and Net Application reports on mobile browsing market share).

[Richard spence]

@Tomi @Romain

In my post I said that Apple have defined what a smartphone is. Sure you can install apps on N95s - but hardly anyone does. Sure there is a webkit browser but it there are pretty useless for surfing the real web. Sure you can technically upgrade the o/s - do you know any end users who have?

I have been in the trenches trying to create services for these types of devices for some years and believe me it is horrible. If these so called smartphones had been any good we would have a vibrant services industry for them now - we don't. Most people who own Nokia smartphones have no idea they can install apps on them, there is no discovery and frankly hardly any apps as Symbian/J2Me dev is so bad. On the web side the web usage stats for these devices is pitiful given the installed base of phones.

In your reply you give examples of Apples IIs, to Pc to mac. I don't think this is a comparison that I would make. Comparing Symbian to iphone is like comparing an Amstrad Word Processing Device to an IBM PC. The Amstrad came with fixed software was ok for doing the odd letter but the IBM PC is a really general purpose computer that created a massive software industry.

I do feel you analysis misses the real importance of the iphone, it is a genuine watershed moment for mobile - finally we have a device we can create services for ... at last!! Nokia make and sell plenty of "phones" but they a lot of catching up to do in Smartphones. I think they know it too.

Somewhere in a garage in the US someone is inventing really cool apps/services for the iphone/android - because unlike Symbian/RIM devices they can.

For the record I do not own an iPhone. ;-)

[Philipp Weiser]

You might not want to start the Windows Mobile death watch just yet. As you point out in your Smartphone Realism Pt. 2 post, IT departments hate change. So they'll be buying new WinMo phones for a long time to come...

Microsoft could probably seize all development on WinMo (not that they have done much develepment anyway) and still continue to sell nice amounts of units.

As with the Internet Explorer, it will be enough for them to try and not fall too far behind with each new version.

As someone who's stuck with a HTC WinMo at work, it's really sad that we all have to suffer from Microsoft's inertness.

[miko]

@richard spence,

what do you own? your questions in your first paragraph are blatantly ingorant, to say the least. my 1 yr old Nokia N85 has about 100 apps installed and growing every day. The OS have been upgraded many times thru OTA, maybe not your definition of upgrade, but for a non-techie like me, it is. i dont understand about the webkit browser, but i do use Opera mini/mobile and skyfire browsers.

[cycnus]

Hi,

This is one of the BEST review of the cell phone industry I ever read that I believe is NOT biased. First, let me say that I really hate to see when analyst said that iphone will rule the world. It's not that I'm against iphone, but because i know the fact that iphone selling well just in the USA. kudos for you to pointing this out, as other reviewer failed to do so.

Second, I'm from Indonesia, and you mention about blackberry fever in Indonesia. I have a good news and bad news for blackberry. First, the good news. Yes, bb has doing some great advertising the phone. The president obama use is, then our president susilo bambang yudoyono decide to use it. And then, suddenly, the nokia communicator lost of it's prestige to bb in indonesia. The cell phone operator also pushed this bb so hard, because the ARPU (average revenue per user) has been down from US$30(year 2000) to US$3-US$5 (year 2006) due to price war between operator. With bb, user will use the bb service that were US$15-US$17/month, thus operator were very happy with bb.

Now, the bad news. Cell phone operator were trying to hide the hidden cost of bb in small print. There were lots of bad story here and there in Indonesian news paper, internet forum, etc, that when traveling aboard, someone would be charge with expensive roaming fee when connected to the blackberry server. I know for sure that there were a tiny market of less than 3% of user that have 'done' with bb and back to nokia. second, the bb representative in indonesia were very arrogant. there were an interview in the past by the biggest indonesian news paper to bb numero uno in indonesia about the cheap Chinese product with keyboard/thumbpad. and he said "the cheap chinese phone is only a steeping stone for that user for using bb, because it would be a shame to use such a cheap product, and it would be logical once that person have a money buying the real product that could up his status." This comment were like a storm in Indonesian people. And make a good percentage of people vowed not to buy bb at all. I, myself, a bachelor degree with good amount of salary won't buy any bb because I hate such arrogance. Nokia on the other hand, released their cheapest phone to date with nokia life tools and showing their care about the poor too. so, bb will going down because of it's arrogance. more bad news.... nokia messaging / ovi chat will surely be a better choice for indonesian because of the better priced. US$ 4/month for nokia messaging + ovi chat, compared to US$16/month for bb. With a group of anti bb (because of the arrogance + cheaper nokia messaging + bad publicty of hidden roaming cost) 2010 will be the year that bb fever will be cured in indonesia.

Now about bada.
I don't know if samsung will be success with bada in the long term. The korean company need to show the long roadmap of bada to be really success. For non-smartphone, no one care about support. the most important thing is phone+sms. that's it.... but no one will buy a smartphone that would not have a good support (firmware update). and samsung need to show that they were able to give such a good support for their product.

about nokia.
contrary to other believe such as symbian is old need to be replaced, I believe symbian were one the best operating system. it might not be suitable as the top os anymore, but for middle end, it would do just great, and nokia doing right with the maemo/s60/s40 positioning. BUT... nokia doing their hardware VERY WRONG.

First, the N97 fiasco. It's all about the RAM. the RAM / C-drive is too small. Nokia has been doing a if it's not broken, why fix it. Nokia need to make their phone with more RAM, especially, if their user willing to shell out US$500-800.

Let me say this... the N97mini, has double the RAM, while it looks like an improvement, I believe, nokia should quadruple it instead because N97/N97mini is THEIR TOP OF THE LINE. They should not do a '128 MB is enough' or '256 MB' is enough. They should be AT LEAST doing a enough TIMES TWO for a product that were US$400+.

Now, about the all their current line of the E series. I believe E52/E55 should AT LEAST have internal memory of 1GB, so it should be C-drive + 1GB internal memory to store email/sms/photo/video + tranflash. Their E72/E75 should at least have 2GB of internal memory. and so does their N series... reason...

I really hate nokia for this. I own Nokia E series and MUST store the email/sms on the memory card. If I store on the C-drive, it would be full in no time, and make my phone DEAD!!! and because I store it in memory card, I lose the ability to hot swap. DARN!!!!!!!! This is NOT a good bussiness phone, and I really hate it.!!!!! (note, I use Axis in Indonesia, they give their user 1000 free MMS each month, 1000x50kb photo = 50MB, so... go figure, why my C drive are draining so fast, other than email with attachment too).

Nokia problem is not the software choice or bad hardware, but their trying to use the if it's not broken, why fix it ideology. I even wonder if anyone that have a decision on designing nokia phone ever use email on their nokia.

Best Regards,

[James M]

@richard spence,

Symbian has thousands of applications and has had for years, before the first iphone app was written. Just because there's been no central place to get marketing info from (apple's great coup is generating headlines) doesn't mean they aren't there. http://www.engadget.com/2010/01/08/live-from-nokia-ceo-olli-pekka-kallasvuos-ces-2010-keynote/ Nokia are claiming 300,000 app developers in China alone for Symbian.

@Tomi T Ahonen

"couple of years ago, the Symbian operating system was owned across several giant handset makers (Nokia part owned with SonyEricsson, Samsung, Motorola etc) and had over 60% market share. Now being only Nokia's owned operating system"

You make a mistake when talking about Symbian being owned by Nokia, it is not. Symbian was bought by Nokia and now the Symbian Foundation has been setup to be custodians of the platform as it moves to open source. The Symbian Foundation has many members, Nokia, SE Fujitsu to name but a few.

[Brendan]

Hi Tomi,

A really insightful view of the next year in the smartphone industry, which I would expect from you! Very good point about Samsung - though to turn this into an advantage they need to make sure Bada is a good platform for development. I have heard this is not the case, but give them time.

Only one thing is bothering me though, in the Sony Ericsson analysis you say - "Recently with the Symbian OS shifting to Nokia ownership, SE has little reason to particularly push Symbian in its smartphones and is shifting to Android."

You must know yourself that Symbian is not Nokia owned. In fact, now Sony Ericsson have a BIGGER stake in Symbian since it is a not-for-profit foundation instead of a private company in which they have a (smaller) shareholding. If you didn't know that then I'm quite disappointed that someone who comes up with such insightful views can get that wrong.

[Mr Swiss]

usually...i would not get so upset..but...
i stand corrected wasnt the nokia 9000 the first smartphone? and lets add that the nokia 7650 was the first symbian smartphone...which in turn was an OS built directly for smartphones...(thus the fact that it looks aged now)...
the iphone was the 1st smartphone OS to be upgraded? let me go back a few years with the Nokia N90(oh the 1st Nseries device which carried superior multimedia capabilities) was able to be upgraded via Nokias (Device) software update updater...followed behind by the N70(correct me here but still is the worlds best selling smartphone?) N80, N93 and N95(and im being sporadic with the devices only listing the ones which were the flagships).....
full web experience? iphone? does "optimized for" ring any alarms? where other devices actually showed the actual web pages with no optimizations?...alot of people forget this point...that loads of webpages have been optimized for the iphone....its like .mobi just became .appiphone
you can develop for iphone easier- true fact that you can..but how easy is it to actually get past apples red tape? no problem here with other OSes...as a matter of fact there was an article recently stating how app store developers are now moving away from the app store due to the restictions of apple...while other OSes are making it much easier to develop apps....
and to your n95 comment about peple dont/didnt know you could install apps...if that were of any truth...the developer Samir of the famed "Rotateme" application would not now own his own developing company and also working in conjunction with nokia...if people didnt know....
it is an insult for mr richard spence to even state that he was a developer....given such ignorant facts spewed from him. if human waste could fly your mouth would be an international airport!!!!

[Freem]

I think Nokia is on the decline because they have totally overslept the changing dynamics of the smartphone industry.

X6 or E72 all the way up to N97.. just a weak lineup!

Nokia is weak in all the segments right now to compete, the only reason they sell so many phones is because of their brand recognition, thats it. Once the consumers find out that what they're buying is not on par with the competition they will run in masses and never look back!

X6 is so expensive for what it offers, namely a huge headache, it should come with all the CwM music collection pre-installed on the device DRM-free to justify the price.

E72's email client is so laughable that even the free flash gmail app is better to use.

How about, the E-series is supposed to be all business right? Well if you try using the build in calender or contact app, its just pure anti-business! If you want to remember your client's birthdays which are stored in your contacts guess what your calender wont know it and there is no way to tell the calender go and import all birthdays. If you search for a contact and you only remember his company name, well guess what your all business phone wont know you're looking for a business because it only searches the names of your contacts!

The N97 has a 3 row QWERTY keyboard.. enough said!! The inventors of the original QWERTY go ahead and destroy it!

Ovi maps is so laughable and slow that it should pay you to use it, not the other way around considering that Google Maps is free to install und much better to use. The Navigation part is not bad, it should be free though.

Their chat app is so laughable i had to immediately uninstall it.

Their touch screens are so ridiculous, if you want to use the N97/mini and all their touch screen phones for that matter, you better sharpen your nail on your index finger and make it pointy in the middle otherwise the phone wont properly recognize when you try to touch it.

I used to like Nokia because they were leading the market, nowadays, they're stuck in the past. They can't fire their senior engineers who are clueless with today's technology demands because they once were actually leaders and helped Nokia get to where they are now, and now the same people who helped it get there will take them down.

Nokia fire your top designers and engineers because for the past 3years they have shown no results, they're old and stuck in the old ways. Get some fresh blood in there and let them make some bold moves.

[Jason Lackey]

Tomi, if you have used an N97, X6 or any of the latest touch screen Nokia Symbian devices it would be clear that Espoo 2010 is Detroit 1980 and that the seeds sown with these awful devices will be reaped in plummeting market share. To command anything, you need to own the high ground. Today's high end device can easily be tomorrow's midrange and the day after's low end, but today's low end will never be anything but tomorrow's giveaway.

[Alexandre Bouillot]

First Nokia Smartphone was 9000. First Symbian Smartphone was the 9210. First S60 Smartphine was 7210. iPhone cleary bring a different model from the era before it. Apple isn't after complying Carrier requirement and don't care being frontal with their business model.

iPhone was one of the first 3G phone without video telephony embedded. It was not unusual on Nokia's E line up, but not on mass market range.

For years Nokia was struglling between pushing apps to the phone - remember Preminet - and not ruin carrier's portals and what was their appstore at that time.

Apple succeed transforming carriers into pipe for data and bring unlimited Internet on subscription plan.

Google is now benefiting of this and is able to produce Android on the same ground.

Regarding Internet experience, when I'm browsing on the net, I'm pretty sure I have the 'generic Internet' pages (the one 750K/1.5Mb) and not a cut down version without flash.

This might explain why Nokia's smartphone devices are under represented in adMob stat. I'm pretty sure I rarely cross them during browsing.

I'm planning to try to make an app to check what site are visited, then make stats on what add network are the most proheminent...

[JB]

Interesting take as usual. Your analysis is very carrier/feature set based. If you were to compare the players on different criteria you might see a different picture. What about customer satisfaction as a driver of sales? Mobile is a product that people share face to face, word of mouth is probably a huge driver of sales, particularly with people upgrading from feature phones. If you can capture a big percentage of the upgrade customer, your going to grow. Or you could look at who has the strongest connection with existing customers, or who has a robust feeder system... By these criteria RIM and Apple are way out in front and the have been eating up the lions share of the market growth for the last 3 years (0 to 17 is amazing!). I'm not sure you've made a strong case for Nokia or Samsung to grab a big chunk of the new audience and without the new users they can't maintain share, let alone grow.

[Hyoun Park]

Tomi,

Fantastic post, but a couple of points I disagree with:

1) The assumption that RIM can count on its 75% enterprise market share. If they thought that, they would not have hurried into the consumer space as quickly as they did. With the increasing consumerization of enterprise IT services, we're going to see more iPhone/Android to go along with Symbian/WinMo/RIM. Specifically, iPhone has critical mass in specific geographies to make inroads and the device management companies are quickly stepping up to cover these new OSes. As companies analyze the cost of training, hardware acquisition, software acquisition, and cost of support, both math and strategy will start leading to the increasing adoption of multiple OSes. For the 80% of businesses who only support 1 OS, I'd be interested in seeing how many of them have individual-liable devices in their companies. Based on our numbers, I'd put good money that more than half are unofficially supporting additional mobile OSes. This unofficial support ends up affecting the enterprise mobile ecosystem whether it is acknowledged by IT or not.

2) One of the challenges that Nokia, RIM, and the Japanese providers struggle with is their focus on hardware functions at the cost of UI. Although this worked well in the early adopter phase of smartphones where only techies or tech-advanced cultures picked up on the smartphone, we've moved into an early majority phase where intuitive usability becomes far more important. Simply put, if I need a manual, the device isn't worth it at the majority phase of adoption. As long as Nokia doesn't realize this, they are doomed to become increasingly irrelevant to the future of smartphones. I think they're well positioned to continue to be the market leader in cell phones in general and have taken fantastic steps in owning emerging markets. But this will be at the cost of thought-leadership and creating the next generation of smartphones. Eventually, this will catch up to them (and all other hardware-focused vendors)

One of the reasons that HTC has been so successful is that they realized this from the beginning and rather than simply provide hardware functionality for WinMo, they created intelligent skins and form factors on top of winMo that have been far more usable than anything Microsoft has figured out for themselves. If HTC had taken a Nokia approach to development, they would have missed their opportunity to become the great company that they are today.

[Davide Rota]

I'm sorry but after reading some of your articles I really had to comment! Really liked the different point of view of your posts, the numbers/business/market share view, but I was also so disheartened ...

So let me sum it up:

Big customers buy retro phones because their IT departments are too afraid to support new OS and new technologies and carriers don't want to sell them new phones anyway.
People will only buy the cheaper subsided phones available in their country, be it N97, iPhone or whatever.
People will also value a lot more some useless feature like flash or Mpixel or color ahead of important ones, like OS choice or CPU speed etc..
People will happily spend tons of money for useless premium services, ringtones et similia, but will not care of good, quality applications.
Everyone can make smartphones since apps, community and developer support are apparently not needed. You just need to come up with a new OS, put it on your lineup of dumb-phones, et voilà. The cheaper the better, quality is not required.

You are probably right because that's exactly the way the mobile industry has worked for decades and that's why mobile phones basically sucked and Apple managed to release a product years ahead of the competition.

I'm so glad Apple decided to take the risk and propose a revolutionary product, putting quality OS and polish over meaningless tech specs, leveraging great apps over ringtones and so on...
I'm still convinced, but maybe it's only a stupid hope, that in a while the differences between the innovators pack (IphoneOS, Android) and the others will be too big and glaring for anyone to just ignore them. And I hope that more and more competitors will stop just thinking in terms of numbers and start to put some love/passion and innovation in their products.

Also I'd like to quote another user comment "To command anything, you need to own the high ground. Today's high end device can easily be tomorrow's midrange and the day after's low end, but today's low end will never be anything but tomorrow's giveaway."