Smartphone Bloodbath: Report Card at Half Point of Year 2010 for all major brands

So we are at the half point. Here is my 'report card' of the major brands, both in smartphone phone makers, and more importantly the smartphone operating systems for the mid-way of 2010. For those who do not know the US grading system, A is excellent, B is good, C is passing, D is poor and F is failing. The grades can be adjusted up or down a bit with a + (better) or - (worse). This blog is part of my bloodbath analysis of smartpone wars of 2010 and I am adding a series of strategy analysis for the major brands, in upcoming days.

MARKET IN GENERIC SENSE

The generic smartphone market grew 10% over the six months from the end of 2009. For any smartphone maker or operating system, just to keep up with the market growth, they had to grow 10%. The global market experienced very severe price wars in the Bloodbath in 2010. So for any smartphone makers that were able to remain profitable in that time, that shows they were managing their growth in line with the industry, during very hard competitive times. For dumbphone makers, the world's total phone market had migrated 15% of all phones to smartphone by Q4 of 2009. That is now 19%, so any dumbphone maker should have more than 19% of its total phone business migrated to smartphones to indicate being ahead of the market.

HANDSET MAKERS BY ORDER OF CURRENT MARKET SHARE

THE BIG 6 SMARTPHONE MAKERS

Nokia = B
Grew 15%
Market share 41%
Was profitable both quarters
Has migrated 22%

Nokia grew smartphone unit sales faster than the market and picked up market share. They did that being profitable both quarters. This is textbook good performance. Their migration percentage is consistently above the industry. Nokia has been pushing smartphones into lower cost price brackets, where most rivals can't offer competition, with a 100 dollar 3G smartphone for India for example. In China Nokia offers several 3G smartphones on the Chinese proprietary 3G standard (TD-SCDMA) used by China Mobile, which helps keep Nokia the bestselling smartphone in the world's second biggest smartphone market with over 70% market share according to the latest numbers by Canalys. What hurt Nokia was the premium segment, where the N97 has suffered and now the N8 is delayed. Nokia is the bestselling smartphone in Europe, Asia, Latin America, Australia and Africa. Its only failing market continues to be the USA where carriers refuse to subsidise Nokia's premium phones and Nokia suffers the image of a bargain price brand.

RIM = B+
Grew 11%
Market share 19%
Was profitable both quarters
(is pure smartphone maker)

RIM has grown Blackberry sales slightly ahead of the industry and its market share has been flat. RIM has generated profits both quarters. It is essentially keeping pace with the industry, but considering how many newcomers have joined the industry, this is good performance. RIM's grade is better because they have found a large range of new country markets in the youth segment where they have little compeition, mostly in the wealthier countries of the Emerging Markets. This isolates RIM from immediate heavy competition much like its enterprise solution isolates Blackberry from direct competition in the corporate space. RIM continues to be bestselling smartphone of the USA and has some isolated Latin American, African and Asian markets where it is also the leader.

Apple = C
Shrank 4%
Market share 14%
Was profitable both quarters
(is pure smartphone maker)

Apple is the only major smartphone maker to see decline in smartphone unit sales and thus severe drop in market share. As Apple made by far the best profits in the industry, they are now making the wrong choice, strategically for smartphone dominance, preferring short term profit maximization strategy vs reasonable profits but holding or growing market share. Apple has abandoned market share for the sake of profit. It is a suicidal strategy for the long term. Apple's release cycle of only one new iPhone model annually exposed its biggest weakness in July as the Death Grip antennagate hit the new iPhone 4. Now Apple's 'all eggs in one basket' strategy is suffering from one country to the next, as the US consumer watchdog Consumer Reports rated iPhone 4 as not recommended, and that has since been followed by similar condemnation by French and German consumer watchdogs. The iPhone 4 is selling well but Apple is under-performing now when it needs to make the best possible sales before the rivals bring newer phones to the market. Apple is not the leading smartphone in any country but is doing very well as a strong number 2 in the US, UK, French and Australian markets.

UPDATE AUGUST 5 2010 - I have added a thorough strategy analysis of Apple's iPhone.

HTC = A
Grew 36%
Market share 8%
Was profitable both quarters
(is pure smartphone maker)

HTC has executed perfectly. It grew unit sales far ahead of the market and major rivals, captured a lot of market share and made good profits both quarters. This is text book execution. HTC grade is boosted by excellent expansion of reach - adding China Mobile for example - and expanding the product range, with 6 new HTC models coming still during 2010. HTC has a strong presence in the North American and European markets.

Samsung = A-
Grew 22%
Market share 5%
Was profitable both quarters
Has migrated 4%

Samsung has also executed excellently. Samsung grew unit sales at twice the rate of the industry and grabbed market share. It launched the low cost Wave smartphone on the Bada operating system and the Galaxy premium smartphone on Android. Bada passed 1 million sales in one month, the best new OS based launch of a smartphone since the iPhone 2G in 2007, far better than more visible new brand launches by major brands like Google, Microsoft and Lenovo. Meanwhile Galaxy has sold a million units in just three weeks across 30 markets. Now Galaxy is scheduled for massive global launches. Samsung's migration proportion is far below Nokia and Motorola, but this is mostly a matter of late focus on smartphones and Samsung is clearly addressing the matter now.

Motorola = C+
Grew 35%
Market share 5%
Made loss Q1, made profit Q2
Has migrated 32%

Motorola grew unit sales at a very high rate and gained market share. But Motorola did this at the expense of profits, losing money in Q1, and except for a one-time payment, would have made a loss also in Q2. Motorola has burned most of its dumbphone market share, falling from 2nd biggest dumbphone maker in 2007 to 8th in 2010 but with that great cut in customers, its remaining customers see a migration rate of 32% to smartphones. This somewhat misleading statistic hides the fact that in the latest quarter, for every 1 customer moved to smartphones, Motorola lost 10 dumbphone customers. And even so, at that fire sale, Motorola has not been able to make its handsets profitably. Motorola has been retreating from the global markets and now only focuses on the North American, Latin American and Chinese markets. It is only barely the number 2 smartphone maker in China but nowhere else, not even its home market of the USA.

THE SMALL SMARTPHONE MAKERS

(I do not have accurate smartphone sales per maker per quarter, so we cannot give breadown by performance cateogry)

SonyEricsson = B
Made profit both quarters

SonyEricsson is moving along, under the radar of the biggest smartphone makers but continuing its smaller involvement in smartphones, and has been launching some Android handsets. That SonyEricsson returned to profits in Q1 and continued in profits in Q2 is a healthy sign. Now we'd need an added emphasis for the second half of 2010 to start to pull ahead of the rivals like LG, Lenovo etc. A rumored Playstation Portable compatible smartphone would be a big splash for the second half but recently those rumors have not been that strong as they were early in the year.

LG = C-
Made profit Q1, made loss Q2

LG seemed to be following in the footsteps of Samsung but after making a series of impressive Android announcements early in the year, LG has been underperforming in its smartphones launches. The big reason why the low grading, is that in Q1 LG was still making a profit in its handsets unit, but that went into losses in Q2. Now LG is deeply in trouble and has to sort its own phones business out.

Lenovo = C

Lenovo took a strong stand on the future of smartphones and the CEO has even said that in a few years, 80% of all Lenovo products will be smartphones. It launched the LePhone and Android based iPhone clone smartphone in China, but Lenovo has been struggling with higher than expected marketing costs, which hurt its profitability. Lenovo's LePhone goals seem modest for 2010, where they want to reach 1 million LePhones sold. Even so, as we hear no numbers after more than a quarter of sales, and as Lenovo complains of profitability issues with the handset unit, this is not an excellent entry into smartphones.

ZTE = C

ZTE is rolling out modestly priced Android based smartphones including some for the US and European markets. ZTE's home market is China where it is a strong dumbphone brand and has several smartphones. It is also expected to introduce low cost smartphones to several emerging market countries like in India, various African countries etc. So far ZTE has not been telling us much, which to me signals they are not yet performing well enough to discuss their numbers.

Toshiba = D

Toshiba has been in the process of merging with Fujitsu. We expected a push of the Toshiba-Fujitsu partnership to expand abroad, which has not happened (yet, at least to any meaningful degree). The Japanese market is too small for the two brands to achieve significant performance just in the Japanese smartphone sector.

Sharp = D+

Sharp was another Japanese company we expected to make a bigger splash into the global phone market. They have made some tentative moves but the big step for the Spring was Microsoft's Kin phones (that were manufactured by Sharp) but as Microsoft ended that project, it killed a lot of projected Sharp sales outside of Japan. Like Toshiba, Sharp cannot get enough smartphone sales only out of Japan to be a meaningful player in the market and will soon be overtaken by HTC that has a bigger global strategy. But Sharp has announced it will be releasing the world's first smartphone that offers 3D video without custom glasses, to be launched before the end of the year. So Sharp's near future looks a bit better.

HP = D+

Hewlett Packard bought Palm. It started right off the bat with very confusing statements from the CEO about why they wanted Palm. So far HP has been very ineffective in turning what many thought was one of the best smartphone handsets, and one of the best operating systems, into any significant market gains. HP may be taking a long time to evaluate its acquisition, but this market is moving very fast and HP is abandoning very significant quarterly sales now, while their phone is still competitive. Soon it will be outdated so HP needs to move in the second half.

Google = F

Google pulled the plug on Nexus One. It clearly failed in the market (even though many analysts think this is good for Google, so as not to have a rival smartphone against its handset partners). The strategy to end the Nexus One is a good one, but as a phone, it failed the market. Hence the failure earns them an F for the smartphone (see also below for Android grading).

Microsoft = F

Microsoft also ended its smartphone project. I would say Microsoft earns an F- grade, (F Minus) if that was possible, because this was spectacularly badly handled as a short-lived phone project and totally bumbled launch and sudden termination. Many analysts (including me) felt that the Kin was a good prospect for the youth segment if priced correctly, ie Microsoft should have given it a second chance with renewed pricing, and its prospects in Europe looked good, but Microsoft simply pulled the plug. Microsoft has failed in the phone market (see also Windows Mobile and Phone 7 in operating systems grades below).

Palm = F

Palm ended existing as a phone maker after mroe than a decade and the last 3 years of consistently loss-making quarters. It was mercifully sold to HP and we may yet see the true merits of the work by the Palm engineers, now that HP owns the company.

SMARTPHONE OPERATING SYSTEMS BY ORDER OF MARKET SHARE

TOP 5 BIG OPERATING SYSTEMS

Symbian = B
Grew 11%

Symbian is now the oldest remaining smartphone OS (its roots are more than a decade old) and it is showing its age. There is a lot of fragmentation and the system is hard to learn and takes long to master and development times are long and many of the Symbian partners have been abandoning the platform. Yet the system is being updated and new smartphones are released on it regularly. The Symbian partnership was disolved and now Symbian is run by a Foundation and the system is fully open source. Symbian is Nokia's main OS, also supported by SonyEricsson, Samsung and mainly through the interests of NTT DoCoMo in Japan, most Japanese smartphone makers like Sharp are making Symbian devices. Symbian keeps plugging away as the biggest OS and has passed the 300,000 smartphones produced per day level (27 million per Q2). So for the full half-year, Symbian grew at the same rate as the market maintaining market share.

Android = A+
Grew 409%

Google's Android had a perfect half year. It now has all of its main handset partners already with Android phones in the market including HTC, Motorola, Samsung, SonyEricsson, LG and ZTE among the big handset makers, and many other tech companies like Lenovo. Android is a fully open source Linux based cutting edge OS. Yet inspite of its freshness, the Android OS is also going through rapid evolutions and upgrades, at the fastest pace of any OS out there. Android passed the iPhone globally in market share in Q1 and passed RIM in Q2 becoming the second biggest smartphone OS on the planet and the one growing by far the fastest. Its still less than half the size of Symbian but has risen to become the primary challenger for Symbian. Google experienced considerable resistance from handset partners and from carriers/operators when it launched its Nexus One phone, which Google has since terminated.

RIM = B
Grew 11%

RIM's Blackberry OS grow at the rate of the market roughly speaking, so its a B level performance. The platform suffers in that no other makers are providing Blackberry handsets. But at least RIM is keeping up wtih the heated pace of the smartphone industry growth, by expanding from enterprise customers to the consumer market. The OS is proprieatry and controlled by RIM. There OS needs are quite differernt in business and consumer, so RIM has been working hard on its multitouch touch screen interrface that is now being released. RIM has been gaining the favors of many carriers/operators for the lowest data loads for equivalent mobile web browsing of any smartphones, but its integrated and encrypted data handling has then been having some turbulence with some national regulators like in the UAE and India, where the local governments want to have access to Blackberry user messages and data traffic. 

Apple iOS = C
Shrank 4%

Apple's iPhone iOS suffers from the same problems as the Blackberry in that only one handset maker makes its smartphones but Apple clearly has also lost unit sales and market share in the past half year, so that is why the grade is a C. The OS is proprietary, tightly controlled by Apple and is the least compatible with the rest of the industry, to the degree of carrying on a public fight with Adobe Flash, which powers most videos on YouTube (ie the iPhone is the only major smartphone today that cannot show Flash based videos). The operating system itself, and the iOS supporting familly of devices by Apple help to build its reach beyond just the iPhone, as does its App Store but this is still a poor grade for achieving market decline with what after all is technically the best OS and related eco-system out there.

Windows Mobile = D
Shrank 36%

The major smartphone OS that has suffered catastrophic losses in this half year is Microsoft's Windows Mobile which shrunk by a third while the industry grew by a tenth. The partners were abandoning WinMo most visibly HTC which last year said they won't even bother to release any smartphones on the final WinMo version (6.5) - bearing in mind HTC has sold more than half of all Windows Mobile smartphones ever made - and similarly Motorola already shifted away from WinMo to Android. The partners and developers were further confused by the Kin phones announcements by Microsoft and then their rapid end (which were not strictly compatible with WinMo either). The OS is being wound down and replaced by Phone 7.

SMALLER OPERATING SYSTEMS

(for these again I don't have regular quarterly numbers, so we cannot give more details on performance)

Linux Mobile = D

Part of what was the Linux family has morphed into Android and MeeGo, so what is left tends to be proprietary Japanese smartphones/feature phones. The family is shrinking in size and importance.

Bada = A-

Samsung's Bada did a remarkable launch, reporting more than a million Samsung Wave phones sold using hte Bada OS, in Q2. This is the most impressive new OS launch since the iPhone in 2007. The growth is strong and Samsung is rapidly rolling Bada out to all major markets as its low cost offer with Android based Galaxy smartphones as Samsung's premium product. The big problem Bada has is that it does not have other phone makers signed up to support the platform, but there is time for Samsung to recruit some. The OS is literally one quarter old so far. The start has been most impressive.

Palm WebOS = D-

HP bought Palm but didn't then do anything significant with it. What was once cutting edge, is becoming duller by the day and HP seems very confused what it wants out of Palm. Is it a business solution or a consumer offering. So far HP's stewardship of Palm has been bordering on failure. And this is the hottest time in smartphones, there is no time to waste now.

Phone 7 = B-

Microsoft's Phone 7 transition from Windows Mobile was clumsy and left many developers out in the cold. Meanwhile the brief Kin project confused matters. And in the migration of the family from the outdated Windows Mobile platform to the modern Phone 7, has lost Microsoft at least one of its biggest traditional supporters, Motorola. So the Phone 7 family is surprisingly weak, led by Samsung (who has clearly bigger interests in its own OS of Bada), HTC and LG, and then non-phone makers like PC vendor Dell. We have not seen any Phone 7 smartphones yet, but the first will be launched before the end of the year.

MeeGo (and ex Maemo) = B

Nokia's transition project from the old Symbian platform to the cutting edge Linux based open source MeeGo, developed together with Intel (and based in part on Nokia's previous Linux based OS project Maemo) is still in n development. A long set of developer partners was announced but none were major phone makers (apart from Nokia) and included for example some car manufacturers who want to use MeeGo for their in-car IT/entertainment systems. The first MeeGo phones are not expected until in 2011.

Thats it, my grades for the major brands in the smartphones bloodbath of 2010, at the half-year mark. I will return with a few strategy blogs about a few of our main players.

UPDATE AUGUST 5, 2010 - I have now added the first strategy analysis: Apple iPhone.

Comments

[Enyi]

Great stuff!

Keep it up.

[mhz]

I think your Apple prejudices slightly blind you again Tomi, and it appears to effect your technical analysis of the other players, but we know you're weak in that area but your stats are always pretty good.

RIM doesn't support flash either. Does Bada? Who knows.
http://news.yahoo.com/s/pcworld/20100803/tc_pcworld/rimstillworkingonflashforblackberrydevices
Only on Froyo does Android support Flash 10.1 (and is driving handset/carrier upgrade to this version)

Rim deserves a C for just hanging on in there, but it's difficult to see where they have to go from a technical viewpoint.

Window phone 7 - what's the point of rating an operating system which doesn't exist.

Meego, how can this attract such a high grade? As of last quarter the N900 had only generated 100,000 sales - which is an appalling performance:
http://www.reuters.com/article/idUSTRE64R1DI20100528

There's also considerable unhappiness with Nokia about the sluggish support for N900 and the transition to MeeGo for e.g. http://jaaksi.blogspot.com/2010/02/n900-meego-and-barcelona.html

Meego deserves a D.

Bada? It's unclear whether this is distinguishable as a Smartphone OS. Has it attracted large developer support, or is it just SHP wrapped in a new name? C at best.

Symbian. Has lost pretty much all handset manufacturer support outside of Nokia and fixed function Japanese devices and some random Chinese devs who let's face it will build anything. There aren't any public SE, or Samsung plans to release devices on Symbian. It's 15months for e.g. since Samsung's last Symbian phone. There are promises on the horizon and with Nokia cutting back it's handset portfolio should release better devices (for e.g. N8) so overall C-.

iOS. Still the best product on the market for Smartphone users, poor handling of the iPhone 4 issues though. B.

Android - I'll agree.

[Brian]

I am not sure why Tomi is down on Apple, but agree that the PR around antennagate was not good. I would give them a B.

Phone 7 deserves a C.

[C. Enrique Ortiz]

Tomi, is the comment on Nokia "Its only failing market continues to be the USA" accurate? I thought Nokia had pulled out from Japan as they couldn't penetrate it. Or has that changed? Any other markets that should be mentioned?

ceo

[Series 40]

A slight bias can be expected from a former Nokia executive, but I cannot really see how Nokia can get a B on its success on smartphones? There hasn't been a success since N95. There are a lot of promises and a major bet is on N8 but right now it is not the time to assume that N8 will be a hit and give grades based on that. Only time will tell.

I'd also like to correct one error in your iPhone analysis: You seem to claim that iPhone -users cannot view YouTube -content because YouTube is Flash. That is plain wrong. One should separate the tolls used in creating the player, the platform used to deliver the content and the technology used to encapsulate the video content into stream. YouTube is H.264 and it can be viewed on players that have nothing to do with Flash.

[Tim Gorree]

I think the analysis is very sound. Thank you Tomi for continuing to enlighten us with what I believe to be a more realistic view of our industry than generally found elsewhere.

I also like the report card system you use to compare companies performances against each other using what appear to be equal and tranparent parameters. These parameters may be challenged but the numbers you use always check out. Much appreciated.

[Toni]

Tomi, you should put Symbian and Meego in the same "basket". Why? Because of Qt framework. Nokia is pushing Qt framework to be major development tool for making mobile application on their platforms. For developers it doesn't matter what OS is running on the Nokia smartphone, as long as the application is developed with Qt.

[Cards Home Business In Australia]

Thank you for this useful information. I will share it with my friends. I have done bookmarked it. Good luck

[HCE]

@Piot

Thanks for the link. I knew I had seen those numbers before but I forgot where. BTW - the iPhone is essentially flat Q2 '09 to Q2 '10 - not up as you say.

So what we have is that if we compare Q1 '09 to Q1 '10, we find that only iOS and Android grew faster overall than the smartphone market. If we compare Q2 '09 to Q2 '10, we find that only Android grew faster overall than the smartphone market. This is traditionally the iPhone's worst quarter and still iOS managed to grow almost as fast as the smartphone market (61 percent vs 64 percent). Both RIM and Nokia grew a lot slower than the market in both the Q1 as well as Q2 comparisons.

**This** is the comparison that I have consistently said Tomi should be making (well, either this or year over year) and he stubbornly refuses to do so. Let me also add that, assuming these numbers are accurate, that these are the sales numbers we should be looking at. The actual number of phones that found their way into the hands of users, not the number of phones that were dumped into the channel by manufacturers.

- HCE

[cycnus]

Hi all,

Here is my 2 cents on apple iOS.

Apple iOS won't be the dominating factor in year to come based on:
1. It's only apple... other manufacture can't make a phone with iOS, thus, other manufacture would not support iOS, and please also remember what apple did to their Mac Clone maker.
2. Why is #1 matter? because other company that were were better at distribution channel and making more affordable product, will put money on symbian/android/meego/bada/etc... not apple iOS.
3. When symbian/android/meego/bada/iOS/etc have a feature that were almost comparable.... for example, apple always define SMART = multi touch,.... then OS is not important anymore, and that's when we enter the different level of war... and this is WHERE apple FAILED!!!! apple appstore is a hype heaven, when nokia/motorola/sony-ericsson/zte/huawei/rim/etc make an appstore that were'nt so stuck up compare to apple and also giving a bigger user base than iOS, the developer WILL change it's course.

So, regarding iOS, I'm agree with Tomi, that apple need to change it's policy to gain more user. Perhaps by the 'q' model or the nano model. but that's not enough too.

As for RIM, I think their strength in BBM would not be the major factor in Enterprise / Young generation anymore, as other phone maker already catching up with BB. Right now, when they try to enter the other market, their platform weakness would starting to backfire against them.... recap. BB only good in personal messaging, like push email, chat. but their OS is not powerfull in multimedia and other factor.

As for symbian,
many thinks that symbian is bad/ugly/old
But the truth is, if we use the engineering term:
What nokia did with symbian in symbian foundation were making a foundation for 500 floor bulding, and right now the foundation is already strong, but all the bell and whistle + kitchen sink were not properly placed right. When the new Symbian^4 is done, symbian would be very hard to challenge. Because no other company than nokia have a knowledge and experience to build an OS optimized for mobile platform.

So, in the future, symbian would be the dominating factor, and I agree with Tomi on symbian matter, because I already see the strength of symbian.

[PekkaR]

Thanks Tomi.

To others:

Please keep in mind it's a market share analysis of the last 6 months, looking at the companies only as smartphone manufacturers and then the (smartphone) platforms. I found any further tweaks to the grades rather logically explained by the comments. Future prospects seem to have been given some extra weight for the smaller operating systems.

Regarding Apple, Tomi is simply consistent about his market share focused message. In his industry analysis perspective, as long as the companies are even slightly profitable they should be investing into market share growth. The efficiency of turning would-be profits into market share growth then makes the difference in the final result. Any profits stacked up and stuffed into a mattress don't matter until they're visibly (publicly) spent on a new project or buyout that results in market share.

He has already explained elsewhere why he follows market share. Remember he's not a financial analyst and has little concern for stock price or dividends.

[Mark]

@Piot

Interesting but flawed analysis. I don't think it's numbers that Tomi doesn't want us to see, I think it's a case of numbers you've dredged up to support your own view.

The author of the report admits there are a number of interpolations here because he doesn't have full data so he uses Symbian's estimated actual numbers because we know what they are for certain. Unfortunately he does this for RIM and iOS too even though we do. If you look at Q2 2010 (Apples' Q3 due to offset) the numbers are fine (8,360 to 8,398 from Apple's report) but Q1 is way out (8,412 to 8,752 from Apple's report). This is an error of 4%!

We know what RIM and Apple's numbers are, why doesn't he use them?

The other error is one of your own making. Nokia is not Symbian, it is a subset of Symbian. You have missed this point in your calculations.

If you use the real numbers - and that's the challenge, Piot - using numbers that are freely published - then it tells a different story. Of course, you can't always do that so if you are going to use analysts' figures then it's sensible to use a composite from the four big players (Canalys, IDC, Gartner, Strategy Analytics) rather than just one.

So it looks like Tomi did his analysis the proper way which you would expect given that is his job and you've cherry picked one data source that supports your personal point of view.

I think you owe him an apology.

[Tomi T Ahonen]

Thank you for the comments everybody

I will return soon as always, to give direct replies to everybody, so please keep the discussion going. I am workign to edit down my first 'strategy' piece and I think you all will hmmm find it 'interesting' haha if not necessarily 'enjoy' haha.. I am fighting to cut down the wording so let me finish that, then will be here with comments to respond to you all

Tomi Ahonen :-)

[HCE]

@Mark

A couple of points.

1. The difference in numbers is probably because the author is estimating actual sales to customers not the number of phones dumped in the channel (that is the number that manufacturers report).

I don't think Piot "dredged up" numbers. Going by what manufacturers called "sales" is not a good idea - and not just in the context of phones. Take the US auto industry - for quite some time the US auto manufacturers made their sales numbers look better by dumping cars in the sales channel, we ended up with tons of unsold cars and of course, at some point, things just fell off a cliff. I am not suggesting that things are quite as bad with Nokia but it is a good idea to try and estimate number of sales to end users, if you can do it with some accuracy.

2. Symbian, is becoming more synonymous with Nokia by the day. Yes, Sony-Ericsson, Samsung et al are members of the Symbian foundation but they are focusing a lot more on other operating systems. And it looks as if Nokia is doing better with their Symbian phones than anyone else is - so if you actually took Symbian numbers, they would probably end up being worse (though I admit, I have not done the analysis). I am not saying that the Canalys numbers are definitive - but as I said in my first post, these are probably the correct numbers to look at - **if they are accurate**.

In the end, I have no great love for any company, Apple included. It just boggles my imagination that someone would consider that a company that is making money hand over fist and is selling practically every phone they can make is considered to be doing badly, that no allowance is made in this analysis for the rather well known seasonal patterns in Apple sales and that a company that is having issues, that is about to fire its CEO is given an almost unqualified thumbs-up.

- HCE

[Christian]

The Android momentum is incredible and it will be very difficult to stop. At Techonomy conférence Eric Schmidt had announced the number of 200000 Android phones activation per day. Within 3/4 years, The Android OS will go on low end and middle end of the mobile phone market with the Mediatek partnership.

The Android OS is free and Google share some ad revenues with the handset maker and the carrier:

http://abovethecrowd.com/2009/10/29/google-redefines-disruption-"less-than-free"-business-model/

It is a better deal than Symbian, windows mobile 6 or windows phone 7 for Carrier or handset maker. From a developer perspective the best bet is Iphone and android development. And the Apple decision to only allowed native application is a tough one for other system less successful than Android or IOS.

But handset makers must fear Android:
http://thenextweb.com/mobile/2010/07/26/uk-android-handset-sales-booming-350-growth-in-2010/

“The figures suggest an increasing number of consumers are now asking for Android handsets by name,” commented GfK analyst Megan Baldock. “Operating Systems are no longer simply a by-product but a key selling point in their own right.”

Google brand is very strong and maybe one day the people will buy a Android phone and after they will chose the handset maker.

For the moment the Google strategy is just perfect. And Apple strategy to stay on the premium side is clever because they sell hardware. They have a good fanbase.

[Tomi T Ahonen]

Hi Enyi, mhz, Brian, C Enrique, Series, Tim, Leebase and Toni

Enyi - Thanks!

mhz - so first, RIM. According to YOUR source, RIM is trying to enable Flash, while Apple obviously won't allow it. Enough said. On your grading of RIM 'C' - so you think that it is fair to give the same grade to RIM as LG and Motorola - both of whom made one of the two past quarters of a LOSS while RIM kept both quarters profitable - and RIM grew its unit sales on pace with the market. I think RIM is a B performance or we have to drop LG and Moto to a D, which I think is not fair on them..

On Phone 7 I grade all OS's and all major handset makers in the bloodbath. They had plenty of news and announcements that tell us how the OS is doing. Not well enough haha.. As to MeeGo, the move from Maemo to MeeGo getting Intel to join the partnership is certianly a big plus for Nokia and former Maemo.

On Bada you are judging it on conjecture of what the technical merits might be of the OS. I am judging it like any others in this analysis - primarily by market share performance, and Bada is the second best OS launch of all time, behind only that of the iPhone. 1 million Bada phones in one month is a fantastic result.

Symbian - you are simply wrong on it. Nokia sold 24 million out of the 27 million Symbian devices in Q3 meaning 3 million were by other makers. Thats more 'non Nokia' Symbian than ALL Motorola or ALL Samsung smartphone or ALL SonyEricsosn or ALL LG etc.. Not by any means meaningless.

On iOS - so you think when the market grew - and all of Apple's rivals grew - and Apple lost unit sales and lost market share, that is a 'good' performance? Worth a B. No it isn't. Its not good performance, and no matter how much you love the iOS, that is not what gets you the grades in this bloodbath - its about market share. iOS gets a C not a B.

Brian - I am very clear why. The market grew 11% since the start of hte year. Apple declined 3% (meaning it lost 14% from just keeping up with the market). That is not good performance. Thus Apple market share declined both quarters of this year. That is not a good performance and Apple does not earn a B. You have to at least grow to earn a B

C Enrique - sorry I was not clear. I sometimes confuse what I meant as North America and USA. Yes, in country markets, Nokia has also failed Japan and South Korea, but inspite of those, sells more than 50% of all smartphones in Asia... So I meant regional markets not national markets. I will go correct that, thanks.

series 40 - on Nokia, remember this is total smartphone bloodbath, not only superphones. In the bloodbath year of 2010, Nokia has grown unit sales both quarters, has grown market share and made profits - both quarters. Few of its rivals managed that. This is why Nokia earns a B. But its not perfect, Nokia is not growing faster than the market and it has faults at the top of the market. If we drop Nokia's grade to a C, we place it in class with those rivals who either made a loss like LG or Motorola (not acceptable) or didn't grow (like Apple, not acceptable). I think B is the right grade, if we grade Nokia for its whole range of smartphones.

On flash and YouTube - I never said all YouTube videos are Flash, I said the majority of YouTube content is on Flash. So yes, you can view YouTube but many videos there will not play if you don't have Flash.

Tim - thanks! Yeah, I liked it too haha, as I thought about how to 'grade' the performance so far and it hit me, what about doing like a report card from school haha..

Leebase - Come on, Leebase, you've been here plenty of times enough to know, it is about the market share. And yes, we all would love to 'fail' as spectacularly as Apple is turning short term profits out of what should be long-term investments of winning the war, not the battle.

About Antennagate - I said Antennagate did not impact Q2.

Then you talk about YoY sales - that is irrelevant. This is the 'Bloodbath 2010' analysis - AS YOU KNOW. I started this analysis at the start of the year and have followed it carefully since. We are not picking some meaningless point in time in the past. We start at January 1 (ie December 31 of 2009) and count from there. Who wins and who loses. Apple is losing. You know this.

And iOS is irrelevant. Again as you know, if we measure car sales then Honda cannot add its motorcycles to boost its count of cars. The race for world domination is in smartphones not iPads. Go to an iPad site to count tablets, not here.

Then you mention Apple's strongest loyalty in the industry. I totally agree. Which is therefore even more a crime that Apple loses market share. You mention Apple's industry-leading profits. If that was done with growth in the market, that would be great. If Apple sacrificed market gains to get short-term profits - that is bad management, period. Profits while holding market share (or growing it) is fine. Profit at the expense of market share is a long-term strategy of suicide with ever diminishing customers. Idiotic.

Toni - I thought of that, and with Maemo I would have. But with Symbian and MeeGo there are non-overlapping owners of the OS. With MeeGo there is Intel, so we can't count it as the same family.

Ok, that is the first batch of replies. I'll do Piot's bizarre stats comment next.

Tomi Ahonen :-)

[Tomi T Ahonen]

Piot and the Canalys numbers.

Ok, Piot. I think that first line 'the numbers Tomi doesn't want you to see!' was a cheap shot. You've been here countless times over the years, Piot. You know fully well that this is the biggest collection of free stats on the mobile industry anywhere on the internet. And that I celebrate all major stats as they are reported. My personal motto - written in every one of my 9 books and printed on my business cards even - is 'in a connected age, sharing information is power.' Why would you say 'the numbers Tomi doesn't want you to see' ? Have I ever tried in any way to limit the data available to our readers? You have no basis for saying that.

But lets take a look at that link and those Canalys numbers. First, you notice the numbers (or the posting at least) have been 'updated'. That is what analysts often do, their preliminary numbers are different from their final numbers. Like take the Q1 total smartphone number, that Canalys now tells us in August 2010. It is 54.3 million units.

Do you recall what Canalys told us in May that Q1 looked like? They said it was 55.2 million units. Canalys was clearly above the other industry analysts, so now they've adjusted the older Q1 number downwards. Is it likely that Q2 numbers will be adjusted too? Strategy Analytics said Q2 sold 60 million units in smartphones, Canalys said 62 million. It may be that Canalys adjusts its numbers again in the future. As you know, I give preliminary market share numbers based on my own monitoring of the industry per quarter, and then I wait for all 4 major analysts to report, after which TomiAhonen Consulting uses the average of the 4 analysts. Based on that average, my Q1 number was 54.4 million unit sales of smartphones.

So if you think Canalys is now 'correct' and its Q1 number of 54.3 million units is the 'correct' number we should all use - then note also, that three months ago, Canalys was wrong by 1.7% - and TomiAhonen Consulting was off by 0.2%. Who is giving value to its readers, 3 months earlier? And whose to say Canalys Q2 number is now valid either?

There are some serious problems with this summary of Canalys numbers too. It reports the Symbian number for Q1 as 24M and for Q2 as 27M - numbers consistent with Symbian but then in the notes - Canalys says 'Other includes Symbian devices not sold by Nokia' - so the Japanese Sharp, Kyocera, Toshiba, Panasonic etc Symbian phones, plus Samsung, SonyEricsson etc Symbian phones are 'more' than these? Yet Symbian itself reported the 24M and 27M number. There are definitely problems with some of those numbers, most of all those about the iPhone. But I'll get to that a bit later.

Then you make mistakes analysing that page you mention - The Symbian number is Symbian, not Nokia. There is no Nokia in those pie graphs and not in the numerical charts. They talk about Symbian which you interpret to Nokia. The official Nokia number of sales in Q4 of 2009 was 20.8 M units. In Q1 it grew to 21.5 M and in Q2 it was 24 M. That is continuous clear growth. This is the formal statement of a public corporation in its official quarterly results. Why would I take that bizarre Canalys page over Nokia's official numbers (or others like Apple).

So lets go to the most bizarre numbers in the stats. The Apple numbers for Q1. Apple itself reported Q1 sales of 8.75 million units of iPhones. Canalys reports it as 8.36 million. Now, I take it you will accept Apple Q4 number for Christmas 2009 was 'correct' at 8.7 million unit sales of iPhone? So, if you take Apple official numbers, iPhone sales declined unit sales from Q1 to Q2. If you want to use these Canalys numbers, then iPhone unit sales declined from Q4 to Q1. Either way, in 2010, iPhone - and only iPhone - unit sales declined in one quarter. Either way I win.

Then on Android. Piot, I do not understand when you say 'for weeks Tomi has said Android is 24%' - I do not recall saying that. My current model has Android at 19% which is the number for Q2 that I have been reporting, Tweeting etc. I did a search of 24 on the blog and didn't find any mention. I do see that currently - effective today - the rate of Google's sales suggests about that rate but for Q2, TomiAhonen Consulting says Android barely passed RIM and achieved 19%. As to that 'discrepancy' that you find between my 19% and Canalys's 16% - bear in mind all Canalys Q2 numbers are consistently lower than mine - including Apple's market share. I called it at 14%, Canalys calls it at 13%.

As to the USA being behind - well all stats used by the industry - and most analysts even based in the USA agree, that the USA lags the leading countries in mobile. That the USA now sells more smartphones than in the past does not make it the leader. It has woken up late. Only a quarter of US phones are smartphones, Western Europe is nearing half.

On your 'honest question' Piot - you KNOW this 'bloodbath' analysis is FOR THE YEAR 2010. I am not picking an arbitrary point in time in history, from which to find an optimal point of analysis. I am tracking the race this year. So we start on January 1 of this year. And its clear, this year Apple has been losing actual unit sales per quarter as well as severe losses in market share. What you talked about was the glory days of 2009 when Apple was still growing market share. That ended in Q3 of last year and Apple has been in free-fall ever since.

So Piot, for this year, the facts by every single source agree - Apple has lost sales so far, and Nokia, RIM, HTC, Samsung and Motorola among smartphone manufacturers and Symbian and Android among OS's have grown sales. Most of them also grown market share. Apple's market share - the only one of the lot - has declined both quarters. That is the truth in the year of the bloodbath.

So yes, thanks for the link. Piot, I would ask you to retract the statement of 'numbers Tomi doesn't want you to see' or else show me where I have said I want to limit facts from any discussion on this blog.

Tomi Ahonen :-)

[Christian]

I disagree with your evaluation of windows phone 7. I give it a D. The Microsoft strategy is confusing. Microsoft is a horizontal player but they only target the high end market with high minimum specification for windows phone 7 hardware. With Moore law, it will change but Android will soon target mid and low market.

And they enforce restriction to the customization of the UI. For UI customization, Android is a better choice for handset maker and it is free. In a highly competitive market the cost of windows phone 7 is a handicap and it seems Google share the ad revenue with handset maker.

I think the Microsoft strategy could be clear if they choose to do vertical integration and sell their own smartphone. Because some choice look like as they target the Apple market.

[small business websites]

give me a mobile that will let me skype around the world and make mobile to mobile calss just using skype... the days of telcos making big profits are coming to a close

[white iphone 4]

Thank you for taking the time to publish this information very useful!I'm still waiting for some interesting thoughts from your side in your next post thanks.