A Look At the Handset Industry, Market and Installed Base in 2012

I have just completed the work on this year's edition to the TomiAhonen Phone Book 2012 and can share some data from it. Those who read this blog who are interested in the handsets side of the mobile industry may find this blog interesting and perhaps even a good resource worth bookmarking..

HANDSET INDUSTRY SIZE IS 250 BILLION DOLLARS

First the big picture. The mobile handset industry will sell about 1.75 Billion new handsets this year and generates revenues of 250 Billion dollars this year, which means that the average sales price of a handset has gone up and is now 143 dollars. No, that is not weird, the cost of basic 'dumbphones' has kept coming down and is now at 40 dollars, and so too, the average price of smartphones has come down and is now 289 dollars. How can the average price of phones go up if both individual phone type prices fell? Its because of the rapid shift from dumbphones to smartphones - the mix of phones is more of the expensive kind. What is the percentage of smartphones out of all phones sold this year? Last year it was 30%. This year the proportion of smartphones sold globally, out of all mobile handsets is.. 41% Yes, next year 2013, we will pass the point where half of all new phones sold will be smartphones globally. The handset market grew 9% in unit volume from last year, and 19% in total revenues. Nice business, eh?

How many mobile phones are there in the wild today? We are approaching the 'Mobile Moment' that I have been writing about, around New Year's (give or take a few weeks) we will hit the point where mobile phone accounts will reach the same number as all human beings alive on the planet - the first technology ever to be so widely spread - inspite of issues such as age, poverty, electricity and literacy. In reality not everyone on the planet will have a mobile account or prepaid subscription, some of us of course walk around with two or three (or even more) mobile phones and devices, or their SIM cards, in our pockets. Which brings us to the handset question. What is the total population of mobile phone handsets in use worldwide? It will be less than the total number of mobile accounts, obviously, because some people have a single phone and multiple accounts and switch between the accounts by switching SIM cards (many lower-cost phones today come with dual SIM card slots for this purpose, even triple-SIM card phones have appeared).

INSTALLED BASE IS 5.5 BILLION HANDSETS

Globally we are at 5.5 Billion mobile phones, actual handsets, in use worldwide. It is a number that has no comparison now. TV sets, PCs, DVD players don't even come close. Portable devices like PSPs, Gameboys, cameras, MP3 players don't match up. Even the total worldwide installed base of FM radios maxes out at 4.1 Billion units, but mobile phones, they now are at 5.5 Billion in use. The wristwatch industry has been overtaken years ago, and even now, the need for pencil and paper, mobile phones are in hands of illiterate adults too, so in a very real sense, mobile phones have more users than pens and pencils. We laughed at the stat last year, that more people use mobile phones than use a toothbrush...

So. 5.5 Billion. What can we learn about it? Out of that number about 1.2 Billion are smartphones at the end of this year, which is 22% of all phones in use, worldwide. Obviously the lead is in countries that are more affluent. In the more advanced handset markets like Hong Kong, Singapore, UAE and Australia, more than three out of every four phones in use are already smartphones. Western Europe is far past the mid-point and even the USA has arrived now to the point where half of phones in use are smartphones. The features of the installed base may be of interest, this is data that usually is hard to find.

PREVALENCE OF SELECTED FEATURES OF THE INSTALLED BASE 
SMS capable handsets . . . . . 100%
MMS capable handsets . . . . . . 85%
Cameraphones . . . . . . . . . . . . 81%
Bluetooth . . . . . . . . . . . . . . . . 79%
FM Radio . . . . . . . . . . . . . . . . 63%
3G or faster cellular . . . . . . . . . 41%
WiFi  . . . . . . . . . . . . . . . . . . . 25%
Touch screen interface . . . . . . 23%
Smartphone . . . . . . . . . . . . . . 22%
Dual SIM . . . . . . . . . . . . . . . . . 9%
Source: TomiAhonen Phone Book 2012
This data may be freely shared

So yeah, the planet has 4.4 Billion cameraphones in use (technically, at the end of this year 2012, not now in October). Compare that to 1.9 Billion TV sets and 1.4 Billion personal computers of all kinds, combined, including desktops, laptops and tablets. Every cameraphone obviously has a color screen and browser too. Or look at touch screen phones - yes, we all have them in our pockets, but of the global installed base of handsets, still more than 3 out of every 4 mobile phones used today does not do touch-screens. That is still the mass market out there, people with phones that are operated by the keypad. And that means, usually pretty tiny screens as well. And remember, not all smartphones are touch-screen enabled either, just start with the Blackberries to begin with..

MARKET SHARES OF SMARTPHONES IN USE, BY OPERATING SYSTEM

We get the new sales of smartphones reported regularly by the major analyst houses. I collect that data and give more details and summaries here both Quarterly and Annually, both by handset manufacturer brand and by operating system. But that is new sales. What about the installed base? That is the really relevant number, how many Android or iOS or Blackberry etc devices are there in use, in the wild, today. This is really the 'bottom line' number if you are a software developer for example. This is the installed base of smartphones, by operating system, at the end of 2012:

INSTALLED BASE OF SMARTPHONE OPERATING SYSTEMS IN USE 2012
Android . . . . . 53%
iOS  . . . . . . . 20%
Symbian . . . . 11%
Blackberry  . . . 8%
bada  . . . . . . . 3% 
Windows  . . . . 2%
Others  . . . . . . 3%
Source: TomiAhonen Phone Book 2012
This data may be freely shared

Yes, how fast the mighty fall. Just a year ago, Symbian was still the biggest OS by installed base, and less than two years ago Blackberry was bigger than the iPhone by installed base. Of course Android has grown from nowhere to having more than half of the total installed base of all smartphones - and right now sells about two thirds of new smartphones so that lead only keeps increasing. And just a little peak into 2013 - by the end of next year, there will be more Android based devices in use, than the total installed base of any Microsoft Windows based devices, desktops, laptops, tablets and smartphones - combined. No wonder Microsoft is freaking out about how Windows Phone and Nokia's Lumia are failing now. They are quite literally seeing the race to the future of computing, being lost by their 'strategic partner'.

WHAT IS THE HANDSET PRICE PYRAMID LIKE

And then the really juicy stuff.. What of the price pyramid? This is how the handset market breaks down by price ranges in 2012:

HANDSET PRICE PYRAMID 2012
Premium Smartphones . . . over $450 . . . . 11%
Mid-price Smartphones . . . $150-$449 . . . 13%
Low-cost Smartphones . . . $80-$149 . . . . 17%
Featurephones . . . . . . . . . $40-$79 . . . . . 21%
Ultra Low-cost Phones  . . . under $39  . . . 38%
Source: TomiAhonen Phone Book 2012
This data may be freely shared

Yes, almost four out of every ten phones sold worldwide costs under 40 US dollars today. That is without contract, remember if you are an American reader, your iPhone 5 does not cost 199 dollars that you pay to AT&T, its real cost is 650 dollars that AT&T pays to Apple, you are just forced to pay the remaining 451 dollars as a forced payment plan to AT&T, with interest I might add, in your monthly fees during the next 24 months. So the iPhone belongs in the Premium Smartphone category, not the Mid-Price range, as also do most of its competitors like the Samsung Galaxy S3 and Nokia Lumia 920 etc. But they are all fighting for a price segment that only has 11% of the world's phone sales. It might make sense to introduce cheaper phones if you want to grow your market share - not unlike Samsung is doing aggressively..

Yes, all this is from the brand new TomiAhonen Phone Book 2012. The Phone Book has over 100 charts and tables just like these you have here, for market shares every which way, installed based, new sales, regional splits, you name it. If its handset data you want, the Phone Book 2012 has it for you. If you want to see more of the eBook that is formated for your smartphone screens, so you can carry all the data in your pocket every day, here is the link for more about the TomiAhonen Phone Book 2012 including table of contents, ordering info etc.

Comments

[Mudassir]

Awesome data, do you have any data around Tablets? Tablets I think starting range is 7" Display size and up!?

[Steven Hoober]

I'd also like to know if subscriptions parses out non-phone use of mobile networks. Data devices, mobile (vs. WiFi) tablets, cars, trucks and busses, industrial and monitoring systems, etc.

The mobile M2M networked world promises to be huge, but I can get no sense of scale /today/, whether it's 10% of subs or 0.1% of them?

[Stoli89]

Tomi, How are you categorizing S40 as an OS (smart OS or feature OS), considering judgements from IDC and GfK?

[foo]

Nokia is in a really bad place right now.

Their initial bid for a turnaround with first generation of Lumia Windows Phones failed. Microsoft is pissed at them, and might be working on their own smartphone. Symbian smartphone sales fell off the cliff and are rapidly approaching zero. By giving up on Meltemi and “Qt for the next billion” Nokia abandoned the most important part of their low end strategy, and now has to resort to marketing S40 Asha feature phones as smartphones. Credit agencies are openly contemplating company break-up scenarios. And a consensus is forming in tech media that the second generation Lumia 920/820 Windows Phone 8 devices won’t be a hit Nokia needs.

It’s gloom and doom all around. Well deserved due to the mess Nokia made of the whole transition, the negativity is palpable.

http://www.unwiredview.com/2012/10/05/can-nokia-surprise-us-with-lumia-920820-windows-phone-q3-sales-with-expectations-so-low-maybe-they-can/

[Eki]

Tomi, would you kindly mark the references that you have used when creating this blog entry. It is crucial in order for us readers to analyze the validity of data you offer us. It can't be so that you only refer to anonymous "analyst houses" and your own book as a source.

As it is, this blog entry is like a plagiarized school paper with no point at all. I value the effort you have done in writing it and I would like to use some of the information to my own benefit, but at the moment your blog is a worthless reference, nor does it give the reader any means to dig deeper.

[CN]

@foo

You wrote: "By giving up on Meltemi and “Qt for the next billion” Nokia abandoned the most important part of their low end strategy, and now has to resort to marketing S40 Asha feature phones as smartphones."

And then Nokia reported Q2 like this:

Mobile Phones Q2 volumes increased quarter-on-quarter and year-on-year to 73 million units.

And from the press: "The results indicated that, thanks to the successful roll out of its Asha range and dual SIM devices, Nokia has been able to successfully defend its position in the mobile phone space, with the increased device volumes an impressive performance in the context of a shrinking overall market (as more feature phone owners switch to smartphones)."

So, it doesn't necessarily take "Qt for the next billion", would you agree?

And please don't try to create an impression that Nokia started calling low end devices as smartphones. That is not true and I guess you know it.

[CN]

@Eki

You must be new here.. ;-)

[Tomi T Ahonen]

Hi Eki

Good question, you probably didn't know that I run one of the most trusted mobile industry research analyst houses, my own consultancy, TomiAhonen Consulting, which reports on various industry stats regularly, including many exclusive ones. I am the father of many of the mobile industry's unique statistics and phenomena starting with the multiple subscription, and I publish an annual statistical volume called the TomiAhonen Almanac - referenced in countless sources - and also this related TomiAhonen Phone Book, now released every two years.

There is no other source. I use all the 'normal' publically available data like the ITU, GSM Association etc, plus operator public data, handset maker public data, and various industry analyst public data - but only as inputs and as sanity checks. All the numbers I publish under my company name, are generated by proprietary statistical and forecasting tools I have developed over more than a decade, many date back from when I was the Global Head of Consulting for Nokia, some pre-date my Nokia employment period even.

Sorry, this is NOT some kind of 'report' of other peoples' research where I could point you to sources. The source is.. TomiAhonen Consulting. If you don't like that source, please don't use it. Almost all of the Fortune 500 sized giants who are in mobile quote my stats, often quite regularly haha..

PS - CN - thanks haha..

Tomi Ahonen :-)

[John Waclawsky]

@foo "microsoft is pissed at them" So its all Nokia's fault, LOL. I don't think so. The reality is that Nokia should pissed at Microsoft. The main problem is NOBODY wants windoze..... Your not a Microsoft astroturfer are you?

[kevin]

Hi Tomi,

Thanks for the data; much appreciated. Can you clarify a couple of points?

On the handset price pyramid 2012 chart, is that just the price breakout for phone purchases made in 2012? In other words, it is NOT the price breakout for the whole 2012 installed base (which includes purchases in 2011 and 2010 and before).

Also, does the price pyramid 2012 chart account for resales? In other words, does it include the sale of a used iPhone 4 that was sold back into the market when its former owner bought an iPhone 5? Do you have an estimate for the percentage of phones (or smartphones) resold in 2012?

thanks again,
kevin

[Eki]

@Tomi

Thanks for your comment. Appreciate it a lot.

I am aware of that you are an analyst yourself, one that is often quoted and well recognized within the industry. One agenda why I'm reading this blog (on top of those hilarious "fire Elop now" outbreaks, that do have entertainment value) is that I am looking for solid quantitative data for me to utilize later on. But I simply can't refer to a guy like you, no matter how well recognized an analyst you are. It eventually comes to the fact that how was the information collected. This is what remains unclear, maybe you were interviewing 50 million people and made notes to a notepad with a pencil, who knows. Re-phrasing other people's data without a single reference is just plain wrong.

Eki

This does not mean I don't like it. Will definitely stop by regularly having a look again. But for me your statistics is useless. And I wonder why so many publish your figures in the media. I guess the copy-paste generation has invaded the newsrooms too, they are just surfing online all day long, making up stories the easiest way they possible can. A pity.

[Tomi T Ahonen]

kevin - its all new sales yes, not installed base haha.. and no, it doesn't include second hand market. I do have the percentage of the total handset market second hand phones in the actual Phone Book but it doesn't separate that between smartphones and dumbphones, just out of the total installed base, how many are second hand phones in use today, if you want to pay for the 9.99 Euros haha. I'm sorry I cant really give all of the data out into the open, this blog has already tons that is not available anywhere else..

Tomi Ahonen :-)

[Winter]

@Eki
I do not understand you. The numbers presented in Tomi's phone book, and here, are predictions for "31 December".

Predictions are not data but opinions. I am not used to requiring references for predictions.

[Eki]

@Winter

Predictions are always based on to something. It is a combination of existing situation, plus a thorough analysis of the trends to come during the next few months/years.

This industry changes so rapidly that it is extremely hard to make an accurate prediction even if you had 100% correct data of today's data. Within six months the tide may have turned, or gaps in market shares may have grown bigger - who knows.

It is your opinion that no references are needed. I reckon that it is crucial. In Tomi's point of view it is understandable that some of the good sources shall be kept a secret,, however there is no excuse to present some of the sources (publicly available anyway usually) to back up the point, from which he started building his prediction. Any prediction of upcoming numbers he can pull up his ass, we can all agree on that one.

Eki

[BigKahlua]

Eki, you are just another Finn who thinks everything is "extremely hard to predict", "extremely hard to do", "extremely hard to ANYTHING" 'cause you are lazy and its a cool sounding excuse just to sit on your arse. You fucking Finns just cannot compete in the global industries. That's why Nokia is now sinking like a STONE. For the Silicon Valley guys difficult is easy and impossible just takes some time!!! You Finns never get to that level!

[Winter]

@Eki
All your arguments come down to the fact tha prediction == opinion. Because a prediction = history * model. And a model of the future is not falsifyable.

Whatever Tomi writes about the future cannot be tested until that future has arrived. He could try to convince you with his historical (trend) data and his models. But in the end there will be so many guesstimates and model fiddling that it will boil down to: Dot I trust Tomi or not.

[RobDK]

Eki, Tomi has been pretty good at guessing Nokia's Elop-collapse. Whilst I do not agree with Tomi's conspiracy theory about Elop (I believe Nokia's board did the best they could, but have been too slow, and have been wrong-footed by Apple and Google's speed), and his posts can be entertaining reading, it is clear that Tomi gets the larger picture as to what is happening.

His industry figures are usually close to what the big consultancy houses predict (IDC, Gartner, etc.). Tomi was wrong about Apple a couple of years ago, but now he accepts that mobile computing is here to stay and even praises Apple once in a while. Read this blog and Horace Deidu at asymco.com, and then you do not really need to read other sites to understand what is going on!

[Mr Eric Wu]

@CN

> And please don't try to create an impression that Nokia started calling low end devices as smartphones. That is not true and I guess you know it.

Nokia (with some help from GfK) decided to create a new category of Smartphone-Lite. This is not a smartphone, but a phone which is certainly smarter than other feature phones. Asha is the prime example, and Nokia refers to Asha as a Smartphone-Lite.

The issue comes as to how the phone is then reported. In the financials there is no such Smartphone-Lite division to report sales. Smartphones are reported. Mobile Phones are reported. The honest CEO would never report Smartphone-Lite phones in the Smartphone category. However, many people believe the CEO is not so honest and the figures he says are truthful only in the Microsoft sense...

I personally thought the invention of a new category just to improve Nokia's PR was fairly stupid and a waste of other peoples time.

[tlerner]

I am not certain if Nokia would do better without MS, or if it went with Android. I do however think that marriage with Microsoft is a recipe for a disaster. Microsoft is not well prepared to survive in the post PC era, the era which it ruled due to its monopolistic position. Take the PC away and MS has nothing to fall back on.

Great analysis can be read here: http://techstew.blogspot.com

[URNumber6]

@Eric Wu
There is no industry standard definition of what makes a smartphone either, IDC have their own definition, Gartner have theirs, etc... and they don't necessarily agree.

@RobDK
I love it when Apple fantasysts talk about 'mobile computing' in the context of the iPhone, it really is very amusing.

Incidentally, Apple did not negatively impact NOKIA at all, from the time the iPhone was introduced to the point Elop publicly executed Symbian NOKIA's sales of smart devices had nearly doubled.

Since Elop killed Symbian/MeeGo NOKIA have plummeted and Samsung have rocketed, that's no coincidence. The whole Apple story line is a red herring.

@foo
By killing Meltemi/Qt Elop has abandoned the 'next billion', they will soon have very cheap Androids from ZTE, Huawei, Micromax, Karbonn, etc... instead.