Earnings Season Preview - What to look for in smartphones bloodbath Q4 results for Apple, Samsung, Google, Nokia etc

Its that time of year, we get to the quarterly results. The Smartphones Bloodbath as I have been calling it, and its Year 2: Electric Boogaloo is coming to a close. Within the next two weeks we'll be getting quarterly results from the big boys including Microsoft, Apple, Nokia, Samsung, LG etc. A few companies reported last month (RIM, HTC) and some companies have already reported like SonyEricsson did today.

What to look for in the earnings season? The big race for Q4 and the full year 2011 is for the grand prize, who gets to take Nokia's crown as the biggest smartphone maker of the year and also for Q4. Nokia invented the smartphone and up to Q1 of 2011 Nokia had towered over its rivals being the world's biggest smartphone maker every single quarter from the very beginning. A year ago Nokia smartphones was still as big as Apple and Samsung combined. But in Q2 we saw Apple pass Nokia to take the title, and then in Q3, Samsung leapfrogged both to claim the title for the Quarter. Now the race is between those two, Apple or Samsung, for who is the biggest for the Christmas Quarter of 2011 in smartphones. The annual race is also between those two but Samsung has a strong lead. Still, estimates for Apple range from 25 million to 35 million smartphone units sold (vs 17.1 million in Q3), so the race is still wide open.

The next rankings are all pretty well set. For the full year Nokia will end up 3rd biggest. RIM is set to be the fourth and HTC the fifth biggest smartphone makers. For Q4 there is a chance if Nokia stumbles badly, for RIM to finish the quarter ahead of Nokia but its unlikely Nokia would fall behind HTC.

There is a race for the sixth place, between SonyEricsson and LG. SE is well ahead but LG had been growing fast and SE growth was timid for Q4. For the full year 2011 its likely SonyEricsson will finish ahead of LG but if LG has had a very strong Quarter, they could sneak past SE.

Motorola will end the year in eighth place, Huawei in 9th and ZTE in 10th place. But for Q4 it is possible that Huawei might pass Moto for the Quarter.

In the OS wars the full year is all settled. Google's Android ran away with it. Apple's iOS comes in second, Nokia's Symbian finishes the year in third place. These positions are very likely to be also for Q4. In fourth ranking we find Blackberry OS and in fifth place Samsung's bada for full year stats. For Q4 it is possible that Microsoft based operating systems, the discontinued Windows Mobile (still selling) and the new incompatible Windows Phone may end up selling more than bada for Q4 now when Nokia's Lumia smartphones have been released but its unlikely that Windows Phone alone has outsold bada, even with Nokia Lumia. And sixth place is a race between Windows Mobile and Windows Phone - and before you think that is a foregone conclusion - the latest data yesterday from Nielsen on Q4 new sales in the USA, Microsoft's biggest market - report that Windows Mobile still outsold Windows Phone by a huge margin. And the data from Europe with Lumia launches suggests a disappointing Lumia quarter.

One of the interesting tidbits will be the Nokia internal battle between internally unloved ugly duckling OS, MeeGo, that powers Nokia's highly rated N9 and which is receiving rave reviews outside of Nokia, but the CEO refuses to support or sell broadly; and the Windows Phone OS powering Lumia, which the Nokia management loves to unbelievable degree, which is receiving lukewarm first reviews and seems to be disappointing in all launch markets. This sets up an interesting internal dynamic, how do they two OS platforms perform head-to-head. The N9 was expelled to remote markets like New Zealand and Kazakhstan and Nigeria, while Lumia was launched in Nokia's biggest European markets like Germany, Britain and France. If we compare smartphone market sizes of the two launches, and their prices, and the affluence of consumers in those countries, and the fact that there were two Lumia phones and only one MeeGo phone sold in Q4 - the Lumia sales should outsell the N9 by a ratio of about 8 to 1. But some early market numbers suggest the N9 might come close to Lumia sales in the Quarter. That would suggest CEO Elop really should release the N9 and its sister model the N950 now to all Nokia markets rather than hide it in some of the smallest and most distant markets imaginable.

As always, I will report on all of the smartphone players as they report their Quarterly data and I will compile an end-of-year review when we know the full market size and can calculate the final market shares. As always, I calculate the overall market size as the average of the four big analyst houses who report on global smarphone sales quarterly, ie Gartner, IDC, Canalys and Strategy Analytics. We should have received all company quarterly data by the end of January and the four analyst houses reporting by early February, when I should post my final Q4 and year 2011 market data and my analysis of every major brand in the race. Stay tuned. And now, its Samsung vs Apple for the Gold Medal. Bring it on!

Comments

[zlutor]

yesss, N9 numbers... I'm really curious whether Nokia will be dare enough to share it. ;-)

Tomi, do you see any chance for N9/N950 will get support again inside Nokia (because of 'good' sales figures)? What numbers would be 'non-ignorable'?

Or 'alea iacta est'? :-(

[Niilo]

http://www.pcworld.com/article/248126/best_phone_at_ces_nokias_lumia_900_with_windows_phone_7.html

Yep. Lukewarm reviews.

[karlim]

While I can easily track how you did get your most of your smartphone numbers, I'm a bit lost with your Sony Ericsson number.

In your Q3 results post you say that SE shipped 7.6M smartphones. While Sony Ericsson themselves do not really that number - they do report total number of Xperia smartphones shipped every quarter for number of quarters now. And it's been:

16 million in Q2: http://www.sonyericsson.com/cws/corporate/press/pressreleases/pressreleasedetails/q2financialpressrelease2011-20110715

22 million in Q3: http://www.sonyericsson.com/cws/corporate/press/pressreleases/pressreleasedetails/q3financialpressrelease2011-20111014

28 million in Q4: http://www.sonyericsson.com/cws/corporate/press/pressreleases/pressreleasedetails/q4andfullyearfinancialpressrelease2011-20120119

So it's been 6 million SE Xperias in Q3 and now in Q4. And unless you think that Sony Ericsson is still selling respectable numbers of Vivaz/Vivaz Pro (Symbian) phones, or a Live Walkmans (the only SE non-Xperia Android smartphone), and exclude Xperia X1 (Windows Mobile - but still Xperia) - your Q3 estimate of 7.6 million smartphones for SE looks way too high.

And - if your 5.9M LG number for Q3 is correct - it must be much closer to Sony Ericsson in smartphone shipments then you expect. And may have easily passed them in Q4

[kevin]

I think the SE press release said "approximately 80%" of sales are smartphones. SE said it sold 9m phones, so that results in about 7.2m smartphones, possibly less, as if it was over 80%, they would've used the word "over" instead of "approximately".

[karlim]

@baron95

#1 "Sales" in press release mean Dollar or Euro amount - not the unit number, unless they say otherwise.

#2 Smartphones are usually more expensive then feature phones. So that 3 million difference in unit numbers (9 million total 6 million Xperias, the only hard numbers SE reported) discrepancy to 80% sales number, most likely only show price difference between SE feature vs smartphone ASP

Unless you can explain where except Xperia line those at least 1.2M SE smartphones came from

And - while I agree with a lot what you say here. Your last comment was way wrong:

MSFT is on tear - maybe. With Xbox, Kinect, Windows 7, etc; Not Windows Phone, as it pertains to mobile, which is discussed here. They didn't even dare to mention the number of WPs activated or licenses sold. They do know them, but most likely, numbers are pretty bad even compared to a low bar of last year's Q4 WP sales (2 or 2.5M) - so they decided not to disclose them.

Intel and mobile. What do they have to do with it? Except empty promises for years and years to join the fun.

Google - nothing in their Q4 report indicated that it was Android or mobile that was at fault for their disappointment.

You may be correct in your stock positions - we'll see depending on how long you hold them. But as far as it relates to mobile, except for iPhone - they have very little to do with mobile.

[karlim]

Sorry - SE part was @Kevin. Somehow thought it was @Baron95. After the SE - well, that was for @baron :)

[Steve]

Very bad news for Nokia:

"Nokia's upcoming Windows Phone handset, the Lumia 710, has been deemed too expensive by UK networks...
...sales of the Lumia 800 allegedly failed to meet network expectations, leaving carriers sceptical over just how popular the new model will be."

http://www.reghardware.com/2012/01/23/networks_nag_nokia_to_lower_lumia_levy/

[KPOM]

Apple sold 37 million iPhones last quarter. They may reclaim #1 for the quarter past.

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[Jae]

Given how much money they received from Microsoft and the fact that the CEO is ex-Microsoft, no wonder management loves to hate MeeGo and loves Windows Phone. Tsk, tsk.

[Peter]

Jae ,

It is criminal behavior to dump winning product and embrace/contribute to a failed WP7.5.

The lost of profit for not selling meego n9 (by restricting it to a few markets, labeling it as last no support product, DOA) is 10 times more than microsoft illegal money.

Sue Elop and the board chairman is the only way for nokia shareholders get their nokia back.

Regards,
Peter

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We should have received all company quarterly data by the end of January and the four analyst houses reporting by early February, when I should post my final Q4 and year 2011 market data and my analysis of every major brand in the race. Stay tuned. And now, its Samsung vs Apple for the Gold Medal. Bring it on!

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