This is the "Bloodbath" Final Report for Smartphone Market Share Battle 2010
So, we finally have the last of the big 4 analyst houses reporting on the handset sales and smartphone sales and I can now calculate my numbers. As I have said many times before, I use the average of the big 4 analyst houses for the overall market size and then use the best info I can find (ideally the actual quarterly numbers from the handset maker quarterly reports) to calculate market shares. We can now report on the Smartphone Bloodbath of 2010 (I have been calling my analysis of the market share battle for smartphones last year, as the Bloodbath), and give the final count. I'll do Q4 quarterly results first briefly, then give the full year 'final report'.
Q4 NUMBERS
The top 10 smartphone manufacturers in Q4 were:
1 Nokia . . . . . . 28.3M . . . 28%
2 Apple . . . . . . 16.2M . . . 16%
3 RIM . . . . . . . .14.2M . . . 14%
4 Samsung . . . .10.5M . . . 11%
5 HTC . . . . . . . 10.2M . . . 10%
6 SonyEricsson . 5.2M . . . 5%
7 Motorola . . . . .4.9M . . . 5%
8 LG . . . . . . . . .4.7M . . . 5%
9 Fujitsu . . . . . . 2.0M . . . 2%
10 Sharp . . . . . . 1.7M . . . 2%
Others . . . . . . . . 1.5M . . . 2%
Total . . . . . . . . .99.4M
Whats new from Q4? Plenty of shuffling in the rankings. Samsung has jumped ahead of HTC. SonyEricsson has jumped Motorola for 6th place. LG came from nowhere and is challenging now ole' MotoMoto for that place. And Nokia's smartphone market share has dived under the 30% level for the first time ever, and also, for the first time ever, Nokia's nearest two rivals in smartphones now sell more smartphones when added together, than Nokia alone. The giant is no longer as invulnerable as it has been in the past..
The smartphone OS battle for Q4 has Symbian still on top. The widely reported story from analyst house Canalys, that Android would have passed Symbian has now been rebuked by both IDC and Gartner, so my immediate Tweet and blog about it, that Canalys numbers did not stand up, seems easily verified haha.. (who gives you the value in the stats to this industry, eh? Who told you first? Over 400 press articles had the faulty numbers but Communities Dominate broke the story that Canalys was wrong..) Lets see how the smartphone operating systems stand in Q4:
1 Symbian . . . . . . 31.4M . . . 32%
2 Android . . . . . . 30.1M . . . 30%
3 Apple iOS . . . . 16.2M . . . 16%
4 Blackberry OS . 14.2M . . . 14%
5 bada . . . . . . . . . 3.0M . . . 3%
6 Windows Mobile . 1.7M . . . 2%
7 Phone 7 . . . . . . . 1.5M . . . 2%
Others . . . . . . . . . . 1.3M . . . 1%
Total . . . . . . . . . . .99.4M
Several intersting observations here, at the Christmas sales Quarter for the big operating systems in the Bloodbath. Symbian is holding onto its lead but Android is now running neck-to-neck with it, closing so fast. Remember in Q3 the difference was 36% to 25% (11 market share points). If this trend continues, Android is likely to pass Symbian in Q1. My gut says mostly because of China sales in Chinese New Year, that Symbian could hold but also - with the nose-dive that Nokia has been in, it may well crash far below Android in the quarter haha..
Yes, what else of note? Look at bada, its already fought itself to 5th place. And to add insult to injury, to the beleaguered Microsoft Phone 7, it can't even outsell its extinguishing older sibling, Windows Mobile.. Not good start for Microsoft's 'return' strategy in smartphones.
I also have done my analysis of the Android family for Q4, this is how I estimate the Android internal market shares among its biggest handset makers:
HTC . . . . . . . . 30%
Samsung . . . . .23%
SonyEricsson . 17%
Motorola . . . . . 16%
LG . . . . . . . . . 10%
Others . . . . . . . 4%
Again, very interesting. HTC has recovered top dog status at Android, but this is because Samsung is shifting its attention more to bada (as I predicted). Samsung sold more overall smartphones than HTC, but HTC is now again the bestselling Android provider. Then poor Motorola, they really can't catch a break anywhere, can they? They were the second-bestselling Android provider just half a year ago, now they have fallen to fourth place even in this internal contest, with SonyEricsson leapfrogging them here too. LG is in fifth place in the Android family.
Ok, remember that these Q4 numbers are more indicative of what 2011 will look like, than the full-year stats for 2010. But the big reason for this blog is to bring to conclusion the analysis of the Year of the Bloodbath, the market share wars in smartphones. So lets ask for the envelopes, shall we?
FULL YEAR FINAL RESULTS
First lets do the big numbers, then I'll go by each brand individually. So full year 2010 final market shares of the top 10 smartphone makers:
1 Nokia . . . . . . 100.3M . . . 34%
2 RIM . . . . . . . . 48.0M . . . 16%
3 Apple . . . . . . .47.5M . . . 16%
4 HTC . . . . . . . 25.0M . . . . 8%
5 Samsung . . . .24.0M . . . . 8%
6 Motorola . . . . 13.7M . . . . 5%
7 SonyEricsson . 9.5M . . . . 3%
8 LG . . . . . . . . . 7.0M . . . . 2%
9 Fujitsu . . . . . . 6.2M . . . . 2%
10 Sharp . . . . . . . 5.2M . . . . 2%
Others . . . . . . . . 11.6M
Total . . . . . . . . .297.9M
So the results? Lets go first to the actual handset manufacturers of smartphones, in the order of their final sales for the full year. I'll give each a final grade for the year.
SMARTPHONE MANUFACTURERS
Nokia
Market share dropped from 39% to 34%
Generated profits every quarter
Grade C+
Yes, Nokia continues to dominate the smartphone market, there is no doubt about that. The first smartphone maker to break the 100 million level, sold more smartphones last year than its nearest two rivals combined and is more than twice as big as its nearest rival. The year was bloody, we saw very big scalps taken in the year with giant powerful corporations faltering in the smartphones space from Microsoft and Google to the end of iconic Palm. Nokia lost a lot of ground in 2010, their market share the year before was 39%. The once unassailable lead is becoming more mortal. And who would have thought that if Nokia lost that much, that its two nearest rivals - neither RIM nor Apple - could take any meaningful chunks out of that? That instead, the big gains were going to be by the small guys, like HTC and Samsung. Yes, Nokia was expected to lose market share this year, but compare to Apple who actually managed to grow, this is not good enough, Nokia. And its profitability went to near zero in the summer. At the start of the year we expected Nokia to fight for better performance in the USA (failed at that) and we expected Nokia to push the fight in the low-cost smartphones, where it didn't seem to dominate. Obviously Nokia knows this was not good enough, and fired its CEO. I give Nokia a C+ grade for the year in the Bloodbath.
RIM
Market share dropped from 20% to 16%
Generated profits every quarter
Grade B-
RIM was the company I promised would grow market share, and it didn't. It declined from 20% to 16% in the Year of the Blood. With hindsight, we can see that as the smartphone market grew far faster than any of the most optimistic of analysts suggested - as the world came from the economic recession, it would be mostly consumers who would spend more, not that enterprise/corporate customers would suddenly go and buy Blackberries to all their staff from janitors to kitchen staff to security guards, haha. The corporate/enterprise market is far more steady buying relatively similar numbers of smartphones - and we saw it in the rapid shift, where RIM's total new sales shifted from being business phones to consumer phones last year, but that was not enough to let it fully enjoy the enormous growth of the big year. RIM struggled to keep up, grew a lot but not in pace with the industry. What it was able to do, was to unseat Nokia in Latin America as the biggest smartphone maker there, and gain many big individual country markets. It was a tough year for RIM but the silver lining is, that because of corporate accounts and the youth obsession with the Blackberry instant messenger, whatever customers Blackberry gains, it tends to keep. Even as they failed my promise haha, I don't hold that against them, and I grade RIM with a B-
Apple
Market share grew from 15% to 16%
Was superbly profitable all year, generating the biggest profits of the industry each quarter
Grade A
I am often critical of Apple here on this blog, not for making a bad product, no I love Apple, but rather am often critical of Apple for not capitalizing on the full opportunity. I also respect their organization and meticulous attention to usability, and I respect Steve Jobs (we all wish he returns soon and very healthy, our industry needs his vision) even where I sometimes disagree with some individual decision (where is the iPhone Nano? haha). I announced very boldly last Spring, that Apple's market share had peaked and made it clear, I was talking of the annual market share. It is now obvious, that I was wrong - not by much, I missed it by one market share point haha - but yes, Apple was able to grow in the Bloodbath Year. It doesn't matter that they only grew from 15% to 16%, note that both of their bigger rivals, Nokia and RIM lost market share. This is excellent performance in any conditions, but what makes it far more compelling, is that Apple's only new phone model in their lineup for 2010 is the most expensive mass-market smartphone in the world, with an unsubsidised price of about 600 dollars. It is about twice as expensive as Blackberry's average across its smartphones, and well more than 3 times as expensive as the product line of Nokia smartphones. When the competitors all came at Apple with every conceivable look-alike from the Nexus One Superphone to the Lenovo LePhone, Apple grew its market share with the most expensive phone. That is nothing less than perfect performance and they fully deserve their A.
HTC
Market share grew from 5% to 8%
Was profitable all year
Grade A-
HTC was the biggest provider of Windows Mobile handsets from way back in the olden days (actually were Microsoft's original launch handset maker). Then they announced that they would shift their full attention to Android and would not even support Microsoft's final Windows Mobile version (ouch, talk about a slap in the face). But in the Android family HTC was not able to be the undisputed big boy. They faced a determined group of four other big Android providers and during the year even momentarily lost the title of biggest Android maker to Samsung. What HTC was able to do was to grow strongly, far more rapidly than the industry, and considering that the industry was projected to grow by about 40% (and most management would have planned roughly for that speed) and in reality the industry grew by 71% - for HTC to manage to grow significantly faster than that even, is truly a great achievement. HTC has been happily profitable all year. So why not a full grade of A? Its that performance against other Android makers, a small blotch on an otherwise stellar year. HTC, unlike several other Android rivals, put all its eggs in the Android basket, yet wasn't able to dominate within it, like it used to do against mostly the same rivals, on the Windows Mobile platform. Still, an A- grade is excellent in the bloodletting that was the Year 2010 in smartphones.
Samsung
Market share doubled from 4% to 8%
Profitable all year
Grade A
Samsung is the real class of 2010, with all apologies to Apple. If it was possible to give a grade better than A, only Samsung deserves that. Yes, they doubled their market share in the year, yes they leapfrogged several established major smartphone makers in the process. Yes they were profitable all year. But not just that. Samsung also launched its own smartphone OS, bada. In this year of the Bath of Blood, when one OS was killed (Windows Mobile), another was terminated (Maemo) and a third went bankrupt and was bought (Palm) and a fourth had a troubled start (Phone 7), Samsung launched not just a successful OS in bada, it achieved the best new OS launch ever in smartphones, better than the first half-year of Android, or the first half-year of Apple's iPhone. And they did this, while also selling smartphones on Android, Symbian, Windows Mobile and Phone 7. And to prove you can do two things simultaneously (if you are South Korean) while bada smartphones aimed for the low-cost market segment, they also produced the hottest line of superphones, from making the new Google Nexus to the Galaxy and Galaxy S series including that landmark phone, the Galaxy Beam, the world's first phone with a pico projector. Samsung seems to be firing on absolutely every cylinder from being the bestselling dumbphone brand in the USA (Motorola's backyard) to the bestselling dumbphone brand in Europe (Nokia's backyard) to shipping the Galaxy phones with the hottest app in mobile, the Augmented Reality brower called Layar. The Galaxy S series phone even toppled Apple's iPhone 4 as the bestselling import phone in Japan near Christmas. Its no wonder Samsung now promises to sell 60 million smartphones in 2011 and 10 million bada phones in the first half. This is a company that has all its staff pushing in exactly the same direction. I grade Samsung an A.
Motorola
Market share grew from 4% to 5%
Unprofitable quarters
Grade C-
Motorola had a troubled year of recovery, as it prepared for the corporate split-up and tried very hard to return to profits. What Motorola was able to do, was to grow some market share in smartphones, from 4% to 5% and that is good. It also had stopped bleeding market share in dumbphones as it retrenched from global aspirations and focused to be only a regional player, mainly in North and Latin America, and China. There were so many distractions including the hassles selling Motorola's networking unit (to Nokia) but at least now the new company is set and can start to fight for a real come-back. Market share growth in a year of Bloodbath would be very good news, except that it can't be done while generating losses. That is why the C- grade. If Motorola can now in 2011 do the same while generating profits, this is easily a B score performance, but making those losses, only a C-. Heroic yes, but not good enough.
SonyEricsson
Market share remained flat at 3%
Reported slight profit at end after losses
Grade D
SonyEricsson did not grow market share and barely turned a profit towards the end of the year. This is not good enough for the past giant maker where both parents should have deep insights into consumers electronics and telecoms. The very end of the year saw a sudden surge with Android success, but it was too little and too late. This year was to be a comeback for SonyEricsson, it ended up being a year of going nowhere. Not a failing grade, but very near it, at D.
LG
Market share remained flat at 2%
Reported losses
Grade D-
LG is the world's third-largest dumbphone maker, a giant mobile juggernaut that comes from South Korea the home of much of the recent mobile phone innovations. LG itself is famed for the award-winning phone design that is seen as the prototype for the so-called iconic iPhone a year later and LG regularly outsells Apple in touch screen phones. But it went from generating profits to generating losses in this Bloody Year of Bathing and was quite incapable of gaining any market share. The company duly fired its CEO. Not a failing grade, but just, barely passing with D-.
Fujitsu
Market share flat at 2%
Reported profits
Grade C+
Fujitsu made big noises that it wanted to expand abroad, and repeated those noises again in the year, but where is it? Still safely in home harbor, selling essentially only in Japan. Fujitsu is selling its smartphones profitably but its not growing because Japan's home market is not growing. They could have capitalize on big growth in the industry, they missed that. I grade them with a passing grade of C+ but not more.
Sharp
Market share flat at 2%
Reported profits
Grade B-
Sharp meanwhile at least tried and tried and tried. It is selling in modest numbers abroad, but it could have scored really big with Microsoft (Sharp was the maker of the Kin phones that Microsoft killed in only 6 weeks from their USA launch and never even bothered to introduce to the European market where it had many carriers/operators lined up). This was not a failure of Sharp not trying, it was decisions made utterly beyond Sharp. They kept market share and were profitable. They also released a landmark phone, the first smartphone with 3D display that doesn't require glasses. They didn't gain market share but they at least hussled very hard and seem poised to do better this year. I grade them a B-
Palm
Market Share declined from 1% to 0%
Went bankrupt
Grade F
Palm died. They were gobbled up by HP. Thats an F
HP
Market share flat from 0% to 0%
Generated profits but not in their handset unit
Grade F
HP was a tiny smartphone maker prior to its acquisition of Palm. They inherited an ultra-modern OS, and a highly desirable handset, with contracts with many carriers/operators, who only needed cash to run a realistic marketing operation to support a fanatastic phone. HP utterly totally messed this up, to the point that the CEO said after the expensive purchase of Palm, that HP didn't care to be a smartphone maker. That CEO has since been fired but HP is doing nothing with its asset as it grows more old and obsolete by the hour. What a colossal waste. I wish I could grade it worse than a failing F.
Google
Market share flat from 0% to 0%
No profits from handsets
Grade D+
Google made the loudest most brash entry into smartphones, promising its first smartphone, the Nexus One, was so much beyond other smartphones like the iPhone, that it was the first 'superphone'. That fizzled out real fast and suddenly Google discontinued its Nexus One. Then very very quitely in the Autumn, a new Google Nexus appeared. The original had been manufactured by HTC, the new one made by Samsung. So after making one of the loudest entries (and utterly failing), Google now is doing the opposite, very very quietly are actually making some gains in smartphones. Not enough to register even one percent market share, but at least they are back in the game (vs Microsoft haha). This back-and-forth is bad enough, but its far worse, if you are one of the smartphone OS makers. The original Nexus One came as a rude awakening to all Android manufacturer partners (what happened to 'do no evil) but then the sudden appearance, then disappearance, then re-appearance of Nexus, should cause the manufacturers in the Android Army a lot of sleepless nights. What will Google do tomorrow. Is it fair they compete against their own manufacturers.. But yes, while Google has not officially told us about its Nexus line profits, its safe to say that the second most costly new smartphone launch and termination this year has indeed been costly to its parent. I grade Google's smartphones this year (separate from OS Android obviously) as a D+
Microsoft
Market share flat from 0% to 0%
Massive losses in its handset unit's brief lifespan
Grade F
The most tragi-comical episode of the Year of Bloody Bath was of course Microsoft's bizarre Kin adventure. Microsoft had purchased Danger from years ago, took its time in re-launching it in funky youth-oriented phones, and then very strangely, made those Kin phones not using the existing Windows Mobile OS, nor Microsoft's new Phone 7 OS, but yet another OS. They announced many big carriers/operators committed to selling Kin phones and launched in the USA. Then suddenly CEO Steve Ballmer announced he was taking over the handset business, promptly killed the Kin and never even launched in any other markets except the USA. The Kin phones were sold for less than 6 weeks, certainly a world record for the fastest death in the handset business. Steve Ballmer deserves to be fired for this moronic decision alone. Yes, Microsoft earned a clear failing F for this.
Lenovo
Market share grew from 0% to 1%
We don't know about profits but they sure cried about it that smartphones are an expensive market to enter
Grade C
Lenovo launched an iPhone clone in China using Android and called the LePhone. They made bold promises, then downgraded their expectations and made some sales in China and other Asian markets. Considering they are the brand that bought IBM's personal computer business and are on desktops of major corporations the world over, their performance in smartphones has been underwhelming. I grade them a C
Is there any other brand we should mention. It gets to really small players, there are the Dells, the Acers, the ZTEs, the Huaweis, the Pantechs, the Kyoceras and many many more. Nobody else comes to my mind as a significant story among smartphone manufacturers in the Year of the Bloodbath for smartphones. Lets now turn to operating systems.
OPERATING SYSTEMS
So first again, lets do the table of the final year 2010 market shares of operating systems
1 Symbian (Nokia) . . . . . . . . 38%
2 Android (Google) . . . . . . . . 23%
3 Blackberry (RIM) . . . . . . . .16%
4 iOS (Apple) . . . . . . . . . . . 16%
5 Windows Mobile (Microsoft) . 4%
6 bada (Samsung) . . . . . . . . . 2%
7 LiMo (LiMo Foundation) . . . . 2%
8 Phone 7 (Microsoft) . . . . . . . 1%
9 Palm WebOS (HP) . . . . . . . .0%
Symbian
Market share declined from 46% to 38%
Family lost LG, Samsung, SonyEricsson
Grade C+
So the giant? Nokia's Symbian was not having a good year in 2010. We expected them to lose market share, but not this much, very much a blood-letting losing a fifth of their market in twelve months, going from 46% to 38%. Yes, Symbian is still the king of the hill, but they lost all manufacturers who were not based in Finland or Japan. All the deserters were already making Android devices (and several also joined Phone 7). There is no silver lining to this story in terms of performance in the Bloodbath Year. The only reason Symbian ends the year ahead of its rivals is because they had such a huge head-start. They were utterly not competitive in the year, hurt very badly by the delays to the newest Symbian version - several consecutive delays of the N8 handset that was supposed to be the first truly modern touch screen OS version of Symbian. It did launch for Q4 finally, a year behind schedule and did sell well in the last quarter but for the year, the carnage was seen in the numbers. The loss in market share is that enormous, that the loss alone is bigger than the total smartphone sales of HTC or Samsung - as big as Motorola and SonyEricsson all smartphones, combined.. But there is good news outside of strictly Symbian itself. Nokia has prepared a migration path for its developers to allow development of apps for both Symbian and its eventual replacement OS, MeeGo. This is a costly and time-consuming step by Nokia, but is the most considerate possible option when facing the end of an OS (something Microsoft did not bother with, when it termintated Windows Mobile). Similarly the news from Ovi store is finally good, with the download numbers at the end of the year reaching the level of 1.5 Billion downloads when annualized, putting Ovi clearly in second place with handset manufacturer app stores. The ecosystem for Nokia's Symbian family is looking better and that helps rescue its score from the bottom to a passing C+
Blackberry
Market share declined from 20% to 16%
(single-brand OS)
Grade C-
RIM's Blackberry OS had a poor performance in the Bloodbath Year and lost one fifth of its market share. The OS is seen by many as severely outclassed and out of date and the app store is modest and the user interface is not delighting reviewers. While on the handset side there are occasional bits of good news, on the OS side, RIM is facing a view that is pretty grim. I grade RIM at a C-
Apple
Market share grew from 14% to 15%
(single-brand OS)
Grade B+
The Apple iOS system had yet another great year, and was massively boosted by the launch of the iPad. The App Store ships now at a monsterous level of 7 Billion downloads per year and the user interface is the standard by which all others are measured. The OS grew market share a bit in this tough year too, from 14% to 15%. A very solid performance earning Apple a B+
WinMo
Market share declined from 9% to 4%
OS terminated by Microsoft
Grade D
Microsoft's Windows Mobile was killed but isn't dead yet as it lives on some phones that still ship. The annual market share crashed from 9% to 4%. I would want to score WinMo with a failing grade, especially for the rude treatment of its developer community with no migration path to Microsoft's new OS, Phone 7. Didn't Microsoft really have that much in its huge profits, to spare, that they could have taken the expense to offer a migration path? But no. Yet, I can't fail the OS. It still sells! If an OS is killed but refuses to die, it at least deserves some recognition for that. And very bizarrely Microsoft has also announced there will be another Windows Mobile OS upgrade (but probably relating to tablet PCs). so the OS may still have some life after death even beyond the Bloody Year of 2010. But yes, I cannot give WinMo more than a grade of D
Android
Market share grew from 4% to 23%
Grade A
Could there be a more powerful story in the past year of the Bath of Blood, than that of Android. To come from 4% to 23% in market share, in only one year, that is |beyond perfection. That is sublime. While Google's handset strategy was a farsical soap opera, the OS has been a symphony at the Carnegie Hall. A perfect score of A.
bada
Market share grew from 0% to 2%
Grade A
But its not the only perfect score in smartphone OS battles. The year of the Bloodbath saw two completely new OS launches and bada has been the best new OS launch ever. Even faster than Android (or iPhone) in their first 6 months. If this is not a perfect score, when you set a world record, then nothing is. My congratulations to all at bada and I add to my Korean friends, this is perfect example of 'balli balli'... I grade them as an A and wish I could give more.
LiMo
Market share declined from 4% to 2%
Grade C-
Linux Mobile is slowly diminishing in significance when newer Linux based OS platforms come to the market. They lost market share from 4% to 2%. I grade them at a C-
Phone 7
Market share grew from 0% to 1%
Grade C+
Microsoft's come-back in smartphone operating systems is Phone 7 and right from the bat, the OS had a troubled birth. The launch customer of Windows Mobile, HTC, was lukewarm to Phone 7 and Motorola, another major WinMo provider said they would not do Phone 7 smartphones. With no migration path, many developers were angered and left the ecosystem around Microsoft. The OS launched in Q4 to a modest level of 1.5 Million smartphones sold. Its not great performance, but at least they are now launched and are credible. I grade them at a C+
Palm WebOS
Market Share declined from 1% to 0%
(single-brand OS)
Went bankrupt, sold to HP
Grade F
Then we have Palm WebOS. Their market share declined from 1% to 0%. Palm went out of business, were bought by HP and still nothing is happening with them. This OS earns a grade of F.
Maemo
Market share flat form 0% to 0%
(single-brand OS)
OS terminated by Nokia
Grade C
Nokia's Linux based Maemo OS was once offered to be the successor to Symbian. Its now been terminated by Nokia, after only one handset launched using it (Nokia's N900). You'd think it deserves a failing grade for that. But no. Maemo was a pretty good OS with lots of early good reviews. The OS was not killed because it failed in the market, it was sacrificed in the process to merge development with the Linux based OS project by Intel, that Nokia and Intel now call MeeGo, and will launch smartphones in 2011. So Maemo didn't fail the market in the Year of the Bloodbath, they graciously committed suicide to make way for an even more modern OS to come in 2011. That is heroic and while they did fail yes, this cannot be a 'good' performance, it is certainly a passing grade for the now-defunct Maemo. Thank you, you earn a C.
That was the final review of the Bloodbath Year in Smartphones, that was 2010. It was a year of huge global brands entering the smartphone market and making smartphones the most competitive industry on the planet, when measured by how many global Fortune 500 sized companies were in it. Some thrived in the competition (Samsung, HTC, Android, bada) others stuggled (Nokia, RIM, Lenovo, Windows Mobile) and some died in it (Palm, Kin, Nexus) while one of those even had a rebirth (Nexus)
STAY TUNED
But that was 2010, the year of the Smartphone Bloodbath. And what of the year 2011? Well, if you think that a roughly 100 Billion dollar industry that grows by an enormous 71% in just one year can suddenly stop being hot, that just ain't in the cards. So for this new year we will see at least one more new OS from the good folks at Intel and Nokia (MeeGo), we know there will be a new iPhone in June, perhaps even a White iPhone before that. We have heard from Samsung that the intend to sell 60 million smartphones this year (and while that seems enormous, they did hit their announced targets last year, which were equally bold). Smaller Korean rival LG promises us 30 million smartphones for the year. Nokia will give us the juicy E7. HP has been suggesting they might actually figure out what they'll do with Palm. Sony is to offer us finally a Playstation Portable compatible smartphone on SonyEricsson. There will be more phones with pico projectors, more phones with 3D screens and we'll see phones with dual core processors. How can this not be anything else than the sequel? The Son of Bloodbath? Its yes, Bloodbath Two, Electric Boogaloo. I will be giving a proper preview of the new year smartphone market share wars, and will monitor the battles during the year on this blog. Stay tuned.
PS - if you need numbers on the handset industry, remember I just launched my TomiAhonen Phone Book 2010 in December, with all end-of-year numbers for the handset industry, 98 charts and tables about smartphones, dumbphones, cameraphones, features, installed bases, average sales prices, regional market shares, on and on and on, in one handy eBook, formated for the small screen that you can carry on your phone in your pocket, everywhere. The eBook is 171 pages in length and costs only 9.99 Euros, for immediate download. See more at this link TomiAhonen Phone Book 2010.
Finally the truth is revealed.
Lets watch the US blogs ignore the final numbers.
Posted by: Baudrillard | February 09, 2011 at 05:37 PM
While I am happy, as a samsung-ite, with the praise that you are showering on bada, don't you think that the comparison of bada with iOS and android is inappropriate, as they all launched in different market conditions - with bada being launched in a high flying smartphone market, while the other two in relatively far quieter times?
Posted by: Arun | February 09, 2011 at 06:01 PM
Near perfect ratings/grade to me.
Almost nothing to differ. However, apart from figures & actual market shares, mindshare as we may call it has a role to play in Smartphone Bloodbath 2. ;)
I foresee RIM losing it's share further & since HP has nothing to lose from "zero" mark, it may well gain both market & mind share.
Posted by: Manu | February 09, 2011 at 06:27 PM
What could I know about mobile without Tomi???
Posted by: Jouko Ahvenainen | February 09, 2011 at 06:32 PM
One point that you do not make. Apple has said repeatedly that they cannot make iphones fast enough. So they grew market share modestly while selling iPhones as fast as they can make them, in market that overall grew massively. What happens in 2011? With CDMA phone on Verizon? CDMA phones for Japan, Korea, China, others (though maybe China CDMA will be 2012)? Doubling their GSM iphone production run as they have essentially did in 2010 versus 2009? Maybe they could have 20% market share if they could produce enough GSM iphones? Maybe 25% if they have CDMA iphones? Of course maybe you should give them a demerit because they failed on execution.
Posted by: Bill | February 09, 2011 at 06:49 PM
Please qualify your praise of Ovi. I'd like to see the numbers for the competition as well, but can't find neither Apple's or Android's numbers. Thanks.
Posted by: Darwin | February 09, 2011 at 06:58 PM
Near perfect predictions...
I believe that you have to split the OS analysis into two sections. The vertically integrated OS developer/hardware manufacturer and the OS developer/licenser. I believe that your analysis of the vertically integrated group is dead on, Symbian, iOS, BlackBerry, Bada, etc.
But there is one question that I don't have an answer for, and I have not seen anyone discuss. That question is, "What have these folks learned?"
Microsoft has killed off more mobile OS's this year than I can count (WinMo, KIN, Danger, WinCE, etc.). And they are still promoting a full Win7 OS for tablets. Have they learned anything this year, if so what?
Google seems to have learned that they cannot sell handsets (at least they never tried to build hardware). They are back to growing revenue via ad revenue.
OEMs
I guess the same question can be asked about the OEMs, the Samsungs, HTCs, Moto's that build hardware with the OS of others. They all seem to be doing okay or better. What will they do in 2011?
Other "players"
HP is announcing new WebOS products this morning, I don't believe that they will license the WebOS, so they will join the ranks of the vertically integrated players.
My prediction for 2011... The bloodbath continues, but it's more on the OS side than the hardware side.
Posted by: Michael Scharf | February 09, 2011 at 07:00 PM
Verizon iphone now has a 9 day delay for shipping. CDMA iphones could have a big impact on market share.
Posted by: Bill | February 09, 2011 at 07:15 PM
(will do replies in sets)
Hi Baudrillard, Arun, Manu, Jouko, Bill and Darwin
Baudrillard - haha, yeah.. Thats the life in the world of facts. They overhype the nonsense, ignore the truth.. :-)
Arun - haha, ok, valid point, but we could then also go and change the Olympic records (when they ran with lesser shoes and other such equipment) etc.. But yeah, sure, bada gained from the fast growth - but equally, we could say that it has been the most fiercely contested time in smartphones - making it worse to get any sales haha..
Manu - Mindshare, yes! Apple gets A+++ Android and Google get A, Nokia gets D although today this Elop memo rumor has spiced it up a lot for Nokia and their share price is up on the wild speculation he'll announce Android or Phone 7 on Friday..
Jouko - cheers :-)
Bill - fine, but also, I have seen many times last year the people at Foxconn (ie who manufacture iPhones) saying they'd like to do make more of them, its up to Apple to specify how many units are manufactured (at what price point with Foxconn) so at times at least last year there seems to have been ample extra capacity at Foxconn but yeah, right now several sources report shortages in parts, not just for iPhone though.. But that is also typical of the handset industry and we don't get bonus points for complaining about shortages haha, they happen to all makers (even Nokia haha)..
But Bill, your assumption on CDMA makes sense in a general level, it breaks down when you analyze those individual countries and their market situations. Japan for example - KDDI (on CDMA) is barely bigger than the current iPhone supplier, Softbank, but NTT DoCoMo is as big as both combined and is on WCDMA ie the GSM standard of 3G so the current 'AT&T' versions of iPhone 4 would work just fine on their network. And NTT DoCoMo has said repeatedly and repeatedly, that they want the iPhone. Why is Apple not offering it to the biggest carrier in Japan? Must be the same reason as they couldn't give it to Verizon before this year - contractual obligations to their current provider ie Softbank. The Japanese option at KDDI will be prohibited (I am guessing, I do not know) so you can't count Japan doubling. Similar reasons in many markets. You might enjoy my blog article that examined the CDMA iPhone opportunitities, please google for it on this blog you'll find it, was I recall in early January (or late December) related to Verizon iPhone
Darwin - I report on all the stats on this blog that I find and have links to them when I find them. Please google on the site you'll find them.
Thank you all for the comments, I'll come back with more
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | February 09, 2011 at 08:53 PM
Tomi - Thanks for the thoughtful reply. However, Apple did unequivocally state on their last earnings call that there are NO exclusive contracts left. They cannot lie on these calls or the SEC send people to jail.
Now that may have been a new thing for 2011, and there may be other issues (carriers wanting branding, to run their own app stores, music download services, cost etc). I suspect that though NTT DoCoMo 'wants' the iphone, they probably also want their own services preinstalled (i.e. permanently) on it, which Apple will never allow. Or they want the right to sell it for substantially more than the 'standard' subsidized or unsubsidized price for the iphone in their market (which I think Apple will also forbid).
If there is no contractual exclusivity then it is just a waiting game for Apple or the carriers to surrender. I'm betting on the carriers, especially if Symbian goes down.
Posted by: Bill | February 09, 2011 at 11:19 PM
Considering how rapidly the Android "ecosystem" and the incremental Android ad revenue it has generated for Google, I think your Google grade is much too harsh (even considering the Android grade).
Considering the terrible osition Nokia has put itself in, anything more than a fail is hard to comprehend.
That said, this is a very good post with lots of useful data. Thanks.
Posted by: Brian S Hall | February 10, 2011 at 01:23 AM
Hi Michael, Bill and Brian
Michael - haha, yeah maybe should split it that way. But GREAT question about what has anyone learned. I did say at the start of last year that it will be bloody and explained, that there would be deaths in the industry. I warned that many PC giants would stumble coming in. So at least perhaps, Google, Microsoft, Lenovo, Dell have learned that the smartphone market in the handset/hardware side is a very nasty business, if you're not in the Top 10, its very rough to try to make any money in it. But what else? I think Google didn't learn to stay away from handsets with the relaunch of Nexus, and meanwhile Microsoft didn't seem to 'unlearn' their lesson, when they far too rapidly exited from Kin (I would so hope they try again haha)
Good call on the 2011 focus, yea, very likely ever more on the OS, software and apps/services sides of the battle haha.
Bill - yeah, could certainly. I said CDMA phones would boost iPhone sales by about 10M to 15M for the year but while that seems much, remember iPhone sold 47 million units last year and nearly doubled from the year before. This year Apple should land in the 75 million to 90 million range if they grow a bit faster than the industry. If that is with a CDMA phone, I don't see a big boost. But what if they had offered us a Nano iPhone (repackaged 3GS model) and with Moore's law they could make it a bit smaller and half price. Thus their profit margin for the Nano would be identical to the main iPhone but would offer a full Apple experience in a slightly smaller handset and probably double their sales over what they'd do in the above. Could hit 150 million sales haha. Why on earth not. Why is Apple not giving us an iPhone Nano? I explained here on this blog earlier how to do it so it wouldn't cannibalize new 'big' iPhone sales but would be an entry level model to bring new users to the Apple family.. Anyway, what do I know haha..
Bill - thanks, I didn't know that. I try to monitor the calls but didn't catch that. Yes, if Apple says that, I believe it is totally true. Then yes, there are no limitations to NTT DoCoMo or several other rivals and it would be down to the commercial terms of the deal.
Brian - you did read the article? I said clearly that I had the OS separately, so Google's Android is separate from Google's Nexus handset. And Android got an A, you can't do better than that haha.
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | February 10, 2011 at 01:41 AM
Long time since I have posted but I have been checking your blog regularly. It's just that pretty much every point I wished to make had been made by someone else.
1. I think a C- for Motorola is a little unfair. They did produce compelling products and the new Atrix that was just announced seems to be extremely impressive. So too does their Xoom tablet. This seems like a company that has the right strategy but isn't yet clicking on all cylinders.
2. On the other hand, your grade of C+ for Nokia is a bit inflated. This is a company on the way down. I used to think they had the right strategy but now I have my doubts. Yeah the whole Meego/Symbian/Qt thing sounded good but we still do not know how far this whole infrastructure is from being ready for prime-time.
3. I think failing HP was premature. Their announcement today was impressive - to say the least. Overall, in terms of polish and usability, WebOS is the only operating system that rivals Apple's iOS. They have a long way to go but I am really rooting for them. Assuming they are able to get a good app ecosystem going, they are currently the only phone/tablet manufacturer that I would consider leaving Apple for.
4. Finally, I still fail to see why you place such importance in creating your own OS - particularly since you think apps are of little importance. As far as I am concerned, the control of the app ecosystem is the ONLY advantage of doing your own OS. If the control of the app ecosystem is unimportant and the only important things are web services and SMS, you might as well use Android. You automatically become part of an existing app ecosystem and you can free up your resources to customize the OS and innovate on the hardware side.
- HCE
Posted by: HCE | February 10, 2011 at 02:15 AM
You're too lenient on Maemo.
First Nokia as much as MS left its developers (and worse - device owners who have hoped for a migration path for their pricey gadgets lured by OSS story) out in the cold.
The N900 launch was too early with an unfinished software on underpowered HW and earned the platform bad reputation for being badly put together. The 2010 lack of progress and announcements added too the failing hopes for ever making meego relevant. 2011 with HP returning to game with 3rd Linux based will make it achieving that goal even harder.
Posted by: DS | February 10, 2011 at 10:58 AM
RE: Feb 11th & "Canada-connection".
Smartphones: Nokia + RIM = 50% & access to US market. Would this make any sense as an ecosystem?
Posted by: pekkat | February 10, 2011 at 01:02 PM
http://www.telegraph.co.uk/technology/8313243/Apples-iOS-most-popular-for-mobile-in-Europe..html
Tomi - I just saw this report that iOS has 46% of the smartphone market in Europe. Makes me wonder if your prediction that Apple has reached it's maximum worldwide market share at 15% is correct. After all you and others keep telling us Americans that Europe is the most advanced smartphone market in the world. :)
However, it does point out that iOS share has fallen from 52% a year ago. And android is advancing fast, Nokia plummeting, RIMM plummeting. So maybe the US and EU represent extremes of iOS share (US abnormally low at around 25% and EU abnirmally high at 45%). What's the true level? I would be pretty sure it's not 15% if the most advanced and the least advanced developed markets are both well above that. Maybe 35-40% (or more if supply shortages and no CDMA phone held apple back in 2010.
Posted by: Bill | February 10, 2011 at 11:35 PM
@HCE
--------
1. I think a C- for Motorola is a little unfair. They did produce compelling products and the new Atrix that was just announced seems to be extremely impressive. So too does their Xoom tablet. This seems like a company that has the right strategy but isn't yet clicking on all cylinders.
-------
Even Tomi "Mr. market-share-is-all-that-matters" says that a company at least needs to make a profit. Motorola Mobility was not profitable last year and the CEO said he expects a loss this quarter because of the iPhone on Verizon.
Even the most avid Android fans are saying the Xoom is overpriced. Besides, you can't grade someone on non-shipping products. Motorola is stuck trying to sell a commodity product (Android phones) that it can only compete on price.
-------
3. I think failing HP was premature. Their announcement today was impressive - to say the least......
------
You don't grade based on expectations. You grade based on performance.
-----
4. Finally, I still fail to see why you place such importance in creating your own OS - particularly since you think apps are of little importance.
-----
http://www.asymco.com/2010/08/17/androids-pursuit-of-the-biggest-losers/
87% of the industries profits are made by manufacturers who have their own OS -- Apple, RIM. and Nokia. If you don't own your own OS, you have no customer loyalty. If a consumer buys an Android device by Motorola, in 18 months when he gets ready to buy another phone, if the HTC is $10 cheaper, he will buy that. But it will take a lot more for someone to switch from an iPhone or even a BlackBerry.
----
As far as I am concerned, the control of the app ecosystem is the ONLY advantage of doing your own OS. If the control of the app ecosystem is unimportant and the only important things are web services and SMS, you might as well use Android. You automatically become part of an existing app ecosystem and you can free up your resources to customize the OS and innovate on the hardware side.
-----
You can't build a sustainable competitive advantage on hardware innovation. Anything that you can "innovate", the competition can copy in 3 months. Commoditization *always* leads to a race to the bottom.
Posted by: KDT | February 11, 2011 at 04:47 AM
@KDT
> Even Tomi "Mr. market-share-is-all-that-matters" says that a company at least
> needs to make a profit. Motorola Mobility was not profitable last year and the
> CEO said he expects a loss this quarter because of the iPhone on Verizon.
I'm not exactly trying to give them an A here - I'm just saying that C- is a bit low.
And, as regards HP you said.
> You don't grade based on expectations. You grade based on performance.
Well, if you read what Tomi wrote, part of his failing grade was based on some statement that Mark Hurd made. It was almost as if he graded HP by his own extrapolation of Hurd's statement. Well it now appears that Hurd's statement was a lot more innocuous that what he made it out to be and that HP didn't exactly "mess up their opportunity" as he put it. All there changes we are seeing now were, in all likelihood initiated under Hurd. It's just that the turmoil that Plam went through caused them to miss a cycle. It is clear now that HP has really thrown a lot of weight behind Palm.
> 87% of the industries profits are made by manufacturers who have their own
> OS -- Apple, RIM. and Nokia. If you don't own your own OS, you have no customer
> loyalty.
I'm not saying that owning your own OS is unimportant. I'm saying that control of a complete app ecosystem is the only reason for wanting to own your own OS. What I am complaining about is that Tomi says on the one hand that owning your own OS is important but on the other hand says that apps are not important. That would seem to be something of a contradiction. That's what I was trying to point out.
BTW - your 87 percent figure is a bit misleading. If I am not mistaken, Apple's profit share in the smartphone market is close to 50 percent while their market share is around 16 percent. If you look at the rest of the market, Nokia and RIM have around 60 percent market share and 70 or so percent of the profit. So - their profit is not significantly greater than their market share. I suspect that RIM generates the lion's share of those extra profits because they still have a good hold on the business market. That, however is fading. In the end owning your own OS does not seem to help unless you are Apple.
- HCE
Posted by: HCE | February 11, 2011 at 07:23 AM
Hi HCE, Leebase, DS, PekkaT, Bill, KDT
HCE - welcome back :-) About Motorola grade, remember its for full year 2010 so the current plans don't matter really. And last year they reported losses and didn't really take market share. Thus its not a good performance. And Nokia is better, even as they lost market share in the second half (they grew from Q1 to Q2) Nokia did deliver profits, even as razor-thin momentarily - they were profitable all year in handsets. Thus better grade but not good. HP now is doing all the right moves in February 2011. The failing grade was for 2010 when they didn't do anything..
Now on the ecosystem and your own OS (haha, how quaint this discussion seems now after the Nokisoft Microkia debacle..) - I completely see, I completely agree with the view that smartphones are way to future, that the platform is vital to control the future and the app ecosystem is the key. That is why it needs to be built now. It is not that I am 'against' apps or ecosystems. But while that future has to be built - I am also a realist and the truth is, that the money is all in SMS and MMS today, not in apps. That is why I keep reminding my readers - there is very little money in apps today, be careful. I never said 'do not do apps'. I only keep reminding that the fastest way to money today (in 2008, 2009, 2010 and now in 2011 still) is SMS and MMS..
Lee - haha, good comment to HCE, and obviously now its water under the bridge as Nokia announced Microsoft..
DS - good comments, also pretty much 'history' view now with Nokisoft Microkia..
Pekkat - good point. I honestly hadn't thought of that option because I felt RIM wouldn't be warm to it (my gut feeling) but when you posted it, I really liked that angle, yes would make sense because it would be only way I could see access to North American market, and Nokia handsets could be strong partner for RIM to expand its struggling ecosystem. But now we know Nokisoft Microkia and there are some news stories that report that Nokia had approached RIM who told them that RIM was not interested.
Bill - the study that is quoted in the Guardian is only about web use on smartphones, not actual smartphone unit market shares. It is consistent with the ad network measurements and both of them are clearly in conflict with all sales numbers which in turn are consistent with end-user surveys of what they own. I trust my numbers, which are based on unit sales, and checked against end-user surveys. The reason the 'web browsing' stats are so lopsided and over-count Apple and under-count RIM and Nokia for example - are well known in the analyst community.
KDT - thanks
Thank you all for writing
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | February 16, 2011 at 05:25 PM
Acekard 2i
Posted by: Acekard 2i | March 13, 2011 at 07:22 AM