Bloodbath Q3 final numbers: the Smartphone Race gets ever more tight

We now have the final numbers for the total smartphone shipments, as reported by the big 4 in smartphone analyst houses: Gartner, IDC, Canalys and Strategy Analytics. I have taken, as always, the average of their reported quarterly total numbers and am calling the third quarter total smartphone sales at 80 million even. Last quarter was at 61.7 million.

So the year is only heating up with smartphone sales! I am now projecting the year to end in the 290M to 300M range, which is well above what all analysts (including me) thought at the start of this year. It means also, that we are very close to whether smartphones outsell all types of personal computers including tablet PCs, this year. I was expecting that to happen next year.

SMARTPHONES TOP 6

So lets see how the smartphone manufacturers split up for the third quarter in market share. I have reliable numbers for only the top 6, so that is how far we can go.

1.  Nokia, Finland, 26.5 milllion for 33.1%
2.. Apple, USA, 14.1 million for 17.6%
3.  RIM, Canada, 12.4 million for 15.5%
4.  Samsung, South Korea, 7.9 million for 9.8%
5.  HTC, Taiwan, 6.8 million for 8.5%
6.  Motorola, USA, 3.8 million for 4.8%
Others about 35 manufacturers 8.5 million for 10.6%

TOTAL  80.0 million smartphones sold in Q3, 2010

The market grew 30% in just one quarter (almost any other industry would be thrilled if their industry grew half that number.. in one year!). The smartphone market is nearly doubling on an annual basis, growing about 90% depending on which analyst numbers and which exact point in time you use as the reference point. Wow. As to a migration of all phones, globally 24.5% of all phones sold now are smartphones. In advanced markets its now about half, like here in Hong Kong 48% of all phones sold are smartphones.

Every one of the big 6 smartphone makers grew unit sales from Q2, but Apple and Samsung grew far faster than the market. Note that Apple growth pattern is the exception to all others on the list, because they only release one new model per year, their big growth is always this Q3 period, then their sales are relatively flat for the next three quarters.

Two major leaps here, Apple leaped past RIM to take second place - something that the pundits had expected to have happened long ago - and the more stunning sudden jump is Samsung, who passed HTC for fourth place. Of the other major Android makers, Motorola and HTC grew a little faster than the industry this quarter, but Samsung rocketed with the biggest growth percentage of any smartphone maker, propelled by the Galaxy line of smartphones. The Galaxy line alone would be bigger than Motorola and almost as big as all HTC phones sold.

Nokia had a typically weak third quarter - traditionally Nokia's worst quarter of the year, hurt even more this time due to the further delays to the flagship N8, which only shipped on the last day of the quarter. But be forewarned, Nokia always follows the weak Q3 with its strongest quarter in smartphones, Q4, with the Christmas sales period. And even in its weakest moment of the year, Nokia sells more smartphones than its nearest rivals number 2 Apple and number 3 RIM - combined.

Under the radar, of the big 5 dumbphone makers, LG is having a horrid year in smartphones (and they replaced their CEO). SonyEricsson is doing a brave attempt but can't near Motorola's numbers. Sharp from Japan is likely to soon report robust numbers judging by their aggressive moves to return to international markets. Fujitsu's sales tend to still be only in Japan.

OPERATING SYSTEMS IN Q3

The real story for most of our readers is the smartphone operating system platform war, as that has a direct impact to any developers out there reading the blog.

Symbian (Nokia) 29.0 million for 36%
Android (Google) 20.0 million for 25%
iOS (Apple) 14.1 million for 18%
Blackberry OS (RIM) 12.4 million for 16%
Windows Mobile (Microsoft) 2.4 million for 3%
Bada (Samsung) 1.3 million for 2%
Others 0.8 million for 1%

Total 80 million

Symbian has for the first time fallen below the 40% level, as the other non-Nokia and non-Japanese manufacturers are defecting from the Symbian family. Remember that Symbian is not only Nokia, as it is the OS specified on most phones for NTT DoCoMo, Japan's biggest mobile operator. But as the rest of the major handset makers like Motorola, LG, SonyEricsson, Samsung etc have either left or are leaving Symbian, with NTT DoCoMo only left with Nokia, it could be rebranded the N&N operating system haha, for Nokia and NTT DoCoMo..

I reported last quarter that Android had passed the others to take the second place in operating systems. Not all agreed with that view. Now clearly Android is moving far ahead and there is no longer any doubt, its lead is so big to number 3, Apple's iOS. Blackberry OS rounds up the top 4 who are 'major' operating systems, each powering at least one in 7 smartphones sold worldwide.

Microsoft is vanishing from the radar, now down to 3% only. Meanwhile Samsung's Bada makes its first appearance on the charts, as the most successful new OS launch since the original iPhone. Yes, its true, Bada's first 4 months have been even more successful than Android's first four months. Keep your eyes on Bada.

ANDROID SPLIT

I am also tracking each of the smartphone operating systems by brand. The Android handset distribution might be of interest to some of our readers. I have the top 4 makers for the Android family in Q3 split as follows:

1. HTC 33%
2. Samsung 31%
3. Motorola 18%
4. SonyEricsson 8%
others 10%

As always, feel free to quote any of these numbers and please mention that the source is TomiAhonen Consulting.

For anyone interested in the industry statistics and numbers, remember my annual publication with 84 charts, tables and graphs of the major mobile industry numbers - at 180 pages, its a terriffic bargain at only 9.99 Euros. See sample stats and pages at TomiAhonen Almanac 2010

Comments

[Sameer Shah]

as usual great analysis. Vintage Tomi. @tomi, why do you call this a bloodbath, when all the players are reaping profits with improved smart phone sales.

Nokia - showed profitability.
Apple - best quarter ever.
HTC - Awesome growth in profitability
Samsung - good show
Moto - back in black.

[Tomi Ahonen]

Hi Sameer

Great question. But its because of all the devastating losses and blood by the not-winners in the bloodbath. Remember the start of the year with the superphone? Google is gone. And the world's biggest baddest strongest IT software company, Microsoft, who launched their own phones? Kin died within days. And once upon a time there was a global giant smartphone maker named Palm. They be dead now. And LG? Fired their CEO. One could say Nokia's year in smartphones has been anything but peachy, as they fired their CEO. Lenovo? Crying bitterly how expensive it is to launch into smartphones. So for the good news, there is plenty of bloodletting haha..

Thanks for writing

Tomi Ahonen :-)

[SN]

What actual phone models from Nokia are considered "smartphones"?

I personally would only really classify E-series + N8; maybe a few other N-series ones, but definitely not all of them.

Any others?

[Phil W]

@ SN, a smartphone is a converged device that is capable of running third party apps natively and all symbian phones from Nokia can do that.

You may not like that and want to change the definition to suit your preferred vendor and you are entitled to that view, but be careful what you wish for, because there will be plenty of other people who will want to redefine the smartphone definition in such a way that it may exclude your favourite.

[chat]

I love nokia phone buti hate the symbian os system its slow and useless. I use the n97 mini and i wish tha i could change the system but its not possible so i may switch to htc or motorolla with wm or android cause those sytems are way faster.

can you guys give me a good advice please?!

greets Chat

[Barbon]

@SN

If you look at latest Nokia portfolio, the 4 devices (N8, E7, C7 and C6) share the same HW and SW platform, so if N8 is in all others are.

On the previous generation, 5800 and N97 share the same platform as weel with nothing differentiating on device from an other on capabilities - delta is on memory, camera, GPS, WiFi, Cellular access - but the computing platform is the same.

And on non touch devices, the same story applies. i.e. the N96, 6788i, C5-01 and X5-00 are sharing a lot even if they are targeting different markets.

[KDT]

As a developer, I disagree with the statement - "The real story for most of our readers is the smartphone operating system platform war, as that has a direct impact to any developers out there reading the blog."

OS market share just for cell phones is the least important to mobile developers.

What is important is....

1. How likely are the users of said platform likely to buy products?
2. How large is the mobile OS platform in question
3. How much of an ROI can I expect -- i.e. development cost compared to sells.

Answers.

1. I don't know about Nokia, but Android users are anywhere from 33% - 66% less likely to buy apps than iOS users depending on which source you read. You have admitted yourself that iOS users have more disposable income.

2. I could care less whether the user is running the OS on a phone or not. In that case you have to consider the entire iOS platform -- iPhone's and iPod Touches (and to a lesser extent iPads).

3. Both Netflix and Rovio (Angry Birds) have come out recently saying how much harder it is to support Android devices because of fragmentation. So you're combining more resources with fewer willing customers to pay.

[HCE]

Tomi, I has one basic question that I have not seen answered anywhere. What in your estimation is Android's market share outside the US? Most Android detractors point to Android's sales being largely in the US. Do we have any hard numbers breaking up Android sales across regions?

- HCE

PS - Google and Microsoft have suffered setbacks but are not out. As best as I can tell, there will be a Nexus 2 and Microsoft is re-launching the Kin phones on Verizon pretty soon.

[Brian S Hall]

Thanks. Best review of the core Q3 numbers.

[Frank White]

Nice to see that you leaving Nokia. Nokia can´t innovate, its an old hardware company, there are confused with software, damm apple what have you done.

Android will rule the world, but thats not all. As a app developer i say iOS is for now much better. You make much more money, there is no fragmentation und the Apple User´s spend more money.
For the long run Android will be the first choice, for consumers and develovers.

[Carlos]

Loistavaa taas Tomi!
Thx again for the post and summary of the situation. Have you thought about posting the figures as charts? It would be great to be able to visualize how shares are changing over time

[CJM]

Quarter after quarter everyone discounts Nokia, and yet they are ALWAYS at the top. Have you used Ovi lately on the new Symbian^3 devices? Have you used Symbian^3? I have an iPhone, BB, E72, N8, and Samsung Galaxy (I test software for a living). I have to say, the new Symbian will give the others a very good run for their money. It is far more usable than iOS or Android. Nokia had by far the biggest ship to turn around, and that ship is now pointing in the right direction.

I think it is very misleading to group all 'Android' devices into the same group. Some of these Android OS's have been very customized, like Linux on PC's. As pointed out above, we have found that supporting Android across these various devices is very expensive, and not realistic in many cases. Android has a big challenge: how do you allow for customization, but keep application performance and behavior the same across platforms? If the device manufactures cannot customize as much, they will be relegated to their basic hardware capabilities, which will be a very low margin business. I would say that these Android based devices are fighting a losing battle to the bottom of profitability, unless they can come up with some serious differentiation. This is why BlackBerry, Apple, and Nokia have (wisely) decided to keep their proprietary combinations of hardware and software.

Android is a great OS, and good for end users, but I wonder how good it will be for manufactures longer term. I believe they will need to customize the OS and hardware even further, and in doing so, will make 'Android' more splintered.

[Plastic Cards]

When Google made a foray into this industry, one knew there must be a definitive reasoning behind it. SmartPhones are here to stay and multiply.

[Toby Treacher]

Tomi, great stats many thanks for the analysis. I have been working with some operators at the sharp end of smartphones and we are starting to see some pretty alarming implications for customer services. The numbers will go even more nuts next year, but the newer customers are going to need even more help... Have you come across any research on this?

Post here: http://blog.tobytreacher.co.uk/smartphone-hurt

[business legal advice]

nice posting i eally inspired your article thanks for sharing us.

[BK]

Tomi, would you like to give some comment on recent Nielsen research on what teens (13+) want in US. It suprised me that they found intent in non-iPhone smartphone is considerably bigger than that for iPhone (19% vs 13%). So I though it'd be interesting what kind of spin you give to this.

Cheers.

[Red Bull Hats]

I support nokia. I think this is a good choice

[cool gadgets]

Someday i missed her so much ,but i know that we can not come back.

[Shoes Wholesalers]

It is quite important for all of us Americans to think about our budget and spend as negligence of these things have caused worst times for us in recession.I would love to bookmark your blog as there are very interesting and encouraging articles!

[new era hat]

I think developers would be wise to go where the action is. Most people avoid app downloads for fear of screwing up their mobile; NOT on an iPhone.

And that, my friends, is why the iPhone will dominate.