The Potential for Smartphone Platforms if All Phones Become Smartphones

Now that Microsoft has released the supporters of its Phone 7 platform for smartphones, we can do a bit of mapping of how the different smartphone operating systems might fare, if all of the current mobile phone makers, migrate all of their customers to smartphones. While Nokia has taken an aggressive path to migrating all of its users to smartphones, most of its traditional big 5 phone maker rivals had been slow to do so, and only got energized recently with Google's Android platform.

Note that there is an increasing body of opinions and forecasts, that in the mid to long term view, like towards the end of this decade, all phones would be smartphones. I think that is a very plausible view, considering the relentless pace of Moore's Law. But if so, which platform is strong and which is weak. Even if not all phones go to smartphones, its very likely that most phones in Europe, North America and the wealthy countries of Asia-Pacific will soon be smartphones. So this analysis is an early indicator of what platforms would emerge as major players.

Lets examine the Top 10 phone makers globally, and calculate what is the maximum potential of the platform, if all phone vendors of the Top 10 that have picked it, decide to support fully only that given platform. In some cases this is obvious, like RIM only supports Blackberry its own phone and no other providers support the Blackberry OS. Same for Apple. But in the case of Samsung its a bit of everything. Samsung has its own Bada operating system, but Samsung also supports Symbian, Android and the old MIcrosoft platform, Windows Mobile. So lets plug in the numbers and see what is the potential. Remember because I am assigning maximum support to each OS, that means our totals are far more than 100% - so in reality someone like SonyEricsson will probably continue to support a couple of platforms like Android and Symbian, so then these maximums will need to be adjusted downwards. But I think this is indicative of the 'upside potential' of each platform. I am ranking them in order of their currently stated support.

Symbian Foundation (closely linked to Nokia): 58% (currently 49% of smartphones)
from Top 10 supported by Nokia, Samsung, SonyEricsson, Sharp
Biggest current manufacturer: Nokia
Note Symbian without Samsung: 38%

Android (Google): 40% (currently 22% of smartphones)
from top 10 supported bt Samsung, LG, ZTE, SonyEricsson, Motorola, Huawei
Biggest current manufacturer HTC (not a Top 10 sized manufacturer)
Note Android without Samsung: 20%

Old Windows Mobile (Microsoft, discontinued): 34% (currently 12% of smartphones)
From top 10 supported by Samsung, LG, SonyEricsson, Motorola)
Biggest current manufacturer HTC (not a Top 10 sized manufacturer)
Note WinMo without Samsung: 14%

MeeGo (Nokia + Intel): 33% (not launched yet ie 0% of smartphones)
from Top 10 supported by Nokia

Phone 7 (Microsoft) 28% (not launched yet ie 0% of smartphones)
from Top 10 supported by Samsung, LG
Note Phone 7 without Samsung: 8%

Bada (Samsung): 20% (currently 2% of smartphones)
from Top 10 supported by Samsung

Blackberry (RIM): 3% (currently 20% of smartphones)
from Top 10 supported by RIM

iPhone iOS (Apple): 2% (currently 14% of smartphones)
from Top 10 supported by Apple

Linux Mobile (LiMo Foundation) 2% (currently 6% of smartphones)
from top 10 supported by Sharp
Biggest current manufacturer Fujitsu (not in Top 10)

I think the above shows clearly why Samsung decided to go with Bada and why Nokia would be foolish to abandon Symbian or its MeeGo platform to go Android.

Also note how big part of Android footprint is Samsung (also for Microsoft Phone 7), once Samsung shifts full attention to Bada, Android will be far weaker (as will Phone 7)

I think if you examine the full potentials of Symbian and Android, they are clearly the big players. Samsung will battle with Microsoft for runner-up role. RIM and Apple are far too small to have a chance once the transition is in full swing.

Comments

[HCE]

@Tomi

The 2730, as per Nokia's website, is not a touch screen phone. The cheapest touch screen 3G phone that I have seen from Nokia is the 5230 which has an MSRP of around $200.

Yes there are plenty of non-touch 3G phones for around $100 and I'm sure some touch screen 3G phones get heavily discounted down but the absolute minimum MSRP for a touch screen 3G phone is around $200 - and most are north of $300.

- HCE

[Henrikki]

Didn't have time to reader all the comments. Sorry, no need to answer if my comments are not relevant anymore.

I think u can forget any other major handset maker backing symbian. SE loves android, the android devices were, if understood correctly, the ones which made SE's profit. Samsung's effort have been half-hearted so far to day the least. Bada isn't going to help that.

Symbian And Nokia stands alone like the cheese. Ok, they stand together..:).

[christexaport]

@ HCE,
you replied,"The 2730, as per Nokia's website, is not a touch screen phone. The cheapest touch screen 3G phone that I have seen from Nokia is the 5230 which has an MSRP of around $200.

Yes there are plenty of non-touch 3G phones for around $100 and I'm sure some touch screen 3G phones get heavily discounted down but the absolute minimum MSRP for a touch screen 3G phone is around $200 - and most are north of $300."

At what point did smartphone = touchscreen? Was the MotoQ not a smartphone? Blackberry? E71? How about the Qualcomm prototype?

The reason people choose a smartphone is the added features and extensibility, not a touchscreen. And Nokia and others provide options in smartphones costing around $100. They may not be good enough for you, but you don't have to buy their devices, they do. You continue to act as if Tomi lied, when its never the case intentionally, and certainly not the case now.

@ Henrikki, you seem to ignore the large amount of support from major players in the Symbian foundation. Remember, Samsung, Nokia, and SE make up the three largest manufacturers of devices to date. This ignores the carriers and ODMs like Foxconn (they make the iPhone and other devices) that can go around the manufacturers in the future should they desire.

Just because you don't see Samsung and SE Symbian hardware today doesn't mean they aren't on board. They are likely waiting on Symbian^4. No use investing R&D in the old UI toolkits, which is where most of the differentiation will come between devices. Let's talk more NEXT summer, when the Qt ecosystem is fully online and supported by Nokia. Its still early.

Samsung seems to have no problem using any OS available. SE will need an OS for low end markets. They will battle Android, and we KNOW which OS does the cheap devices well. They won't transition all of that featurephone share by making consumers jump from $40-80 devices to $250-500 devices. It will have to be closer to $100, preferably even lower, and Android just isn't efficient enough to undertake such a task.

[christexaport]

@ HCE,
"Well, you can buy smartphones anywhere (including the USA) unsubsidized and not have a data plan - nothing stops you. Of course, then the price of your smartphone goes from $100 to $350-400. You save maybe $100-150 over two years by not having a data plan. The smartphone (even without the data plan) costs a lot more than a regular cell phone - and that cost is not something everyone will be willing to pay. "

AAAAAAAAAAAGH!! Another mind skewed by the anomoly of the US market...

The price of devices NEVER changes, especially not in the US. When you sign a contract, you never pay less, and usually pay more because of high contract requirements with no buyout option. So that mythical "$100" smartphone doesn't go to $350-500+. It was always that price! The carrier just covers part of that cost, knowing it will recoup at least that over the life of the contract, and still make a profit.

You usually save at least $480 by not having a data plan for two years, assuming a typical US data plan of $20 a month x 24 months. But most will have a data plan. The real benefit is freedom. You avoid a contract, which means no ETF, which are usually $300-400+. With no contract, you can switch to any carrier IN THE WORLD at no cost to you, perfect for someone looking to be as mobile as possible, which is the intent of the mobile phone, right??

What benefit is a mobile if its tethered to a geographical location, with penalties if you leave it of having to keep paying a bill for service you don't or can't use on the low end, and a massive ETF if you decide to break the contract? The current US system makes it easier for users to buy high end devices by making a homogenous pricing scheme, where all high end devices are an affordable $199 on contract.

This is why the US is swarming with Android and iPhone users, since they run the high end at the moment. Nokia is barred largely from selling high end devices in the US for no good reason, but that may change soon. If it does, I hope they keep that same love they gave Apple's iPhone to Nokia, so we can prove just how big an effect it has on the market.

[Tomi T Ahonen]

Hi HCE, vvaz, Piot, em, cygnus, Mark, Alb, Matthew, Henrikki, christexport

HCE - about that 'fantastic scenario' of switching from dumbphones to smartphones - is not my idea. It is suggested by almost all major analysts about phones. But just consider Moore's Law. The iPhone 4 of today, or the Samsung Galaxy or Nokia N8 or Blackberry Bold - superphones that cost about 600 dollars without contract. The price to sell that identical phone in 2019 - according to Moore's Law - is 10 dollars. So if the Africa phone today is basic 25 dollar phone with monochrome screen, WAP interface and T9 input, will have 5 megapixel camera, 3G and GPS, 3.5 inch retina display touch screen - and cost 10 dollars at the end of the decade. Why would the world not have all phones be smartphones? You do believe in Moore's Law, don't you HCE?

And on brand loyalty, my guess is you are in the USA, if your friends often do not know what brand of phone they have. In Europe or Asia - far more advanced markets - people tend to know very well what phones they have and show great loyalty to their brands. Also they are quick to point out bad phones - and recently the loyalty with Nokia has taken a severe beating for example.

Piot - yes, numbers are my buddies. I said VERY CLEARLY in the blog, that the numnbers will exceed 100% due to me counting the upside potential of each phone brand to each smartphone OS. So Samsung assigns the same 21% to Symbian and to Android and to WinMo and to Bada etc..

vvaz - actually its a bit of both. Some Chinese steamrollers are here already - ZTE and Huawei already, with Lenovo rising. But yes, in smartphones its still the platform.

em - thanks for directed replies

cygnus - for the cheapest smartphones the OS is likely going to be one without royalties and Android is likely to rule there

Matthew - thank you very much. You made a lot of points in that long and detailed comment. About the 15 iPhone changes, please check out the OPK blog story, its in the middle of that I recall. I have earlier listed the 12 changes that happened up to iPhone 3GS. About the phone functionality and compatibility - yes, Apple is doing some bizarre choices.

I have been trying to argue Apple needs to release a combo touch screen + QWERTY (slider/folder) version of the iPhone. That might not ever happen, I recognize that. But WHY not provide a memory card slot as you point out? Why on earth not? What possible Apple branding benefit can this give, except that the iPhone is worse than EVERY other smartphone? Its crazy! Same for the replacable battery. In the USA you have reliable electricity (well, most of the time haha, with some brown-outs haha) but in half of the world there is not reliable electricity 24 hours a day. The need of more battery power is VERY real in Africa, India etc. So all other - all other - smartphones offer replacable battery so you can have the spare battery fully charged, if your main battery runs out. But not Apple. And why this silly fight about Adobe Flash. Again, ONLY Apple is stubborn to refuse it, an internet staple and powering most videos on YouTube. So the iPhone 4 is so cool, look at these videos - oh, oops, can't see this cool video. Then take out 2006 ancient Nokia N-Series 3G smartphone and go to same YouTube site and video plays brilliantly. Who is the dumbphone here.

About subsidies and Nokia - that is not up to Nokia. It is always up to the carrier/mobile operator. And that is personal relationships between the local account management from Nokia and the corresponding handset people from the carrier/operator. And its never in a vacuum, as always rival phone makers are peddling their phones to try to win market share. So say LG has a mission to grab market share on that continent. The local account team has a special permission to sell their LG handsets at a specific discount in certain levels of volume sales - and then LG has allocated some marketing budget to that country. So the account manager says if you take twice the normal amount of LG phones this month, I can pay for your newspaper ads, if they feature the LG phones. And the mobile operator is doing regular Sunday paper ads against its competitors, about their per-minute charges etc - so yes, this is a nice savings for that operator, if LG pays for their newspaper ad (this month). But then we have a flood of LG phones - this means we take less Samsung, less Nokia and perhaps drop Motorola altoghether this month.. To balance the extra LG in this month's sales.

That is the daily grind in the handset wars, times 600 operators/carriers, times 40 handset makers, times 2,000 actual handset models manufactured at any one point in time... And for Nokia, the operators often think Nokia is too big and too popular, so they often like to favor 'any rival' to keep Nokia from coming too big in their market. That is the typical problem the market giant has in any industry haha..

HCE - there are plenty of cheap touch screen phones too and the prices are coming down all the time.

Henrikki - haha good one

christexport - thank you for the directed comments. and I totally agree with you, one of the most 'criminal' faults of US carriers is that they force customers to take a subsidised phone on a 2 year plan, but if you show up with your own phone, they still charge you the same price. I am hoping the Congress or some watchdog or someone takes this up. It is totally against the US consumer, and is abusive, and considering the obscene profits the carriers make it is an archaic practise that has to stop..

Thank you all for writing

Tomi Ahonen :-)

[Nasula]

@HCE

The prices are already extremely close to 100 USD for a Nokia 3G touchscreen smartphone in Europe and I can only imagine what the prices are for other vendors in lower income countries like India. Propably even lower.

The price for a Nokia 5230 in Finland at a normal retail store (Gigantti) at the moment is 99€ with 23%VAT. With US style pricing that would be 75.46 Euros. With the daily exchange rate that would be pretty precisely 100 USD. That is a touchscreen smartphone. Others sell it at 119€ (around 120 USD with U.S.-style VAT-free pricing).

This with navigation (global turn-by-turn without network connectivity), haptic feedback etc.

And you honestly think that the price is not going to sink even further in the next years? Propably will and with even better specked phones.

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