Smartphones Q3 Final Numbers, Top 10 biggest manufacturers, operating systems, installed base etc

So its that time of the year. We're in the Smartphone Bloodbath wars, Year Three: Digital Jamboree. Its Q3. We now have all four big analyst houses who have reported their total market size numbers (IDC, Gartner, Strategy Analytics and Canalys) and as I always do, I use their average as my 'official total' and then fit the best possible fit, of the biggest manufacturers, operating systems etc to get the Top 10 market shares. I also report on the installed base, and for every quarter, I report individually for the manufacturers, how I think they're doing in the market share wars. So lets start with the top numbers

TEN BIGGEST SMARTPHONE MANUFACTURERS BY UNIT SALES IN Q3 2012

Rank . Maker . . . . . . Units . . . Market Share . Was in Q2 of 2012 . . OS supported (coming)
1 . . . . Samsung  . . . 56.2 M . . 32.8 % . . . . . .( 32.9 %) . . . . . . . . . Android, bada, Windows, (Tizen)
2 . . . . Apple . . . . . . 26.9 M . . 15.7 % . . . . . . ( 17.0 %) . . . . . . . . . iOS
3 . . . . Huawei . . . . . 16.0 M . . . 9.3 % . . . . . . (  4.6 %) . . . . . . . . . Android, (Tizen)
4 . . . . Sony . . . . . . .  8.8 M . . . 5.1 % . . . . . . (  4.9 %) . . . . . . . . . Android
5 . . . . ZTE . . . . . . . . 8.0 M . . . 4.7 % . . . . . . (   5.2 %) . . . . . . . . . Android, Windows
6 . . . . HTC . . . . . . . . 7.8 M . . . 4.6 % . . . . . . (   5.8 %) . . . . . . . . . Android, Windows
7 . . . . RIM . . . . . . . . 7.4 M . . . 4.3 % . . . . . . (   5.1 %) . . . . . . . . . Blackberry
8 . . . . LG . . . . . . . . . 7.2 M . . . 4.2 % . . . . . . (  4.2 %) . . . . . . . . . Android
9 . . . . Lenovo . . . . . . 7.0 M . . . 4.1 % . . . . . . (  3.9 %) . . . . . . . . . Android
10 . . . Nokia . . . . . . . 6.3 M . . . 3.7 % . . . . . . (   6.7 %) . . . . . . . . Symbian, Windows, MeeGo
Others . . . . . . . . . . . 19.8 M . . 11.6 % . . . . . . (  7.3 %) . . . . . . . . Android, Windows, others, (MeeGo), (Tizen)
TOTAL  . . . . . . . . . 171.4 M
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed 

So, first, Moto-Moto falls out of the top 10? Wow, goodbuy Google smartphones, eh? And who jumps in to replace it? Lenovo with its LePhone. Didn't you know Lenovo makes smartphones? I'm not surprised, so far they've only sold in China but are now eagerly expanding for example into India. Yes, already a Top 10 sized smartphone maker and yes, this is the same Lenovo from China that bought IBM's branded PC operations some years ago.

Other big news, Nokia tumbles from 3rd place to 10th, and is facing expulsion from the Top 10 as well - there's another hungry Chinese smartphone maker, Yulong, which sells smartphones under the Coolpad brand, who may topple Nokia already in Q4. The top is settled, Samsung rules this race now and Apple is in secure second place. Huawei is jumping ahead of the rest of the pack, and watch Sony, it finally is back to making smartphones profitably and showing aggression on the chart. Now lets look at the smartphone operating systems:

BIGGEST SMARTPHONE OPERATING SYSTEMS BY UNIT SALES IN Q3 2012

Rank . OS Platform . . . . Units . . . . Market share . Was Q2 2012 . . Manufacturers in Top 10
1 . . . . Android . . . . . . . 121.2 M . .  70.7 % . . . . . ( 66.9 %) . . . . . Samsung, Huawei, Sony, ZTE, HTC, LG, Lenovo
2 . . . . iOS  . . . . . . . . . . 26.9 M . .  15.7 % . . . . . ( 17.0 %)  . . . . . Apple
3 . . . . Blackberry . . . . . . 7.4 M . . .. 4.3 % . . . . . (  5.1 %) . . . . . . RIM
4 . . . . bada  . . . . . . . . . . 5.2 M . . .. 3.0 % . . . . . (  2.7 %) . . . . . . Samsung
5 . . . . Symbian  . . . . . . . 3.4 M . . .. 2.0 % . . . . . (  3.3 %) . . . . . . Nokia
6 . . . . Windows Phone . . 3.3 M . . .. 1.9 % . . . . . (   3.0 %) . . . . . . Samsung, HTC, Nokia
others . . . . . . . . . . . . . .  4.0 M . . .. 2.3 % . . . . . (   1.1 %)
TOTAL . . . . . . . . . . . . 171.4 M
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed

So yes, the so-called 'third ecosystem' Windows Phone did peak last quarter never coming close to its promise, and is again now in decline. 20 months after Nokia's CEO announced the death of Symbian, that old battered operating system based smartphones still outsell all Windows Phone smartphones, now when Windows Phone is two years of age - and obviously, Samsung's bada outsells both of those. On the top, Google's Android rules the world selling 7 out of every 10 smartphones on the planet. Apple's iOS is the second biggest smartphone OS, with Blackberry solidly in third place, now eagerly awaiting its 'savior' OS upgrade, BB10, with its first smartphones expected in the Spring. Symbian will probably finally fall below Windows Phone now for Christmas sales, but don't hold your breath, Windows Phone is proving a horrid and hated OS by the retail channel. So then lets look at the installed base

INSTALLED BASE OF SMARTPHONES BY OPERATING SYSTEM AS OF Q3 2012

Rank . OS Platform . . . . Units . . . Market share  Was Q2 2012  . Main Manufacturers of current base
1 . . . . Android . . . . . . . 559 M . . . 48 % . . . . . . ( 41 %) . . . . . . Samsung, HTC, Huawei, Sony, Motorola, ZTE, LG, SonyEricsson, Lenovo 
2 . . . . iOS  . . . . . . . . . 217 M . . . 19 % . . . . . . ( 19 %) . . . . . . Apple
3 . . . . Symbian . . . . . . 213 M . . . 18 % . . . . . . ( 25 %) . . . . . . Nokia, Sharp, Panasonic, Fujitsu, Samsung, SonyEricsson
4 . . . . Blackberry  . . . . 109 M . . . . 9 % . . . . . . ( 10 %) . . . . . . RIM
5 . . . . bada . . . . . . . . . . 24 M . . .  2 % . . . . . . (   2 %) . . . . . . Samsung
6 . . . . Windows Phone . . 17 M . . . 1 % . . . . . . (   1 %) . . . . . . Nokia, HTC, Samsung, ZTE
7 . . . . Windows Mobile . . 10 M  . .  1 % . . . . . . (   1 %) . . . . . . HTC, Samsung, LG, SonyEricsson, Palm, Motorola
Others . . . . . . . . . . . . . . 17 M . . .  1 % . . . . . . (   2 %)
TOTAL Installed Base . 1,166 M smartphones in use at end of Q3 2012
Source: TomiAhonen Consulting Estimates November 14, 2012 from vendor data and other sources
This table may be freely distributed

So Symbian is now passed by iOS in installed base globally of smartphones. Other than that, no changes. The total count of smartphones in use is nearly 1.2 Billion and growing fast, we'll soon have more smartphones in use than all kinds of traditional PCs (desktops, laptops, notebooks, netbooks) when tablets are excluded. It will take a couple of quarters further, for smartphones to be more than half of all computing devices used, even when tablets are included in the other side of the equation.

BIGGEST MANUFACTURERS ANALYSIS

So then lets do the biggest manufacturers and their analysis. Again, this is starting to be pretty meaningless, as most big manufactuers now do most of their smartphones on Android, and gradually, most are also becoming profitable, the big 'war' seems to be coming to a close. But lets do this, as usual, in order of size. So Sammy goes first

SAMSUNG - 56.2M smartphones, 32.8% market share - profitable - B+

Samsung grew by 12% from Q2 which is a healthy growth rate. They report very good strong profits out of their handset unit and have now moved their migration rate from dumbphones to smartphones, at past half-point. All good news, all going very well for the Sammy. Except, that they are now 'only' growing at the rate of the industry. So I can't give them an A anymore as a school grade, I am grading Samsung as a B. We now await their first move into Tizen, the next Galaxy flaghship, the Galaxy S4 isn't expected to be released until after Christmas in the first quarter of 2013, so there isn't much excitement for the gift-giving season either. Good job but there were others that did a great job this quarter. Oh, and for those who want to see the split of Samsung's operating system choices, its this:

SAMSUNG SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEM
Samsung on Android . . . . . . . .90%
Samsung on bada  . . . . . . . . . . 9%
Samsung on Windows Phone . . 1%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

APPLE - 26.9 M smartphones, 15.7% market share - profitable - B

Apple did a good job again in Q3 (remember, we deal in calendar quarters here, not the fiscal quarters of given companies, so Q3 for Apple on our blog is always calendar quarter July to September). The iPhone is generating by far the biggest share of Apple's total profits, the usual decline trend of the once-per-year launch cycle of the new model would say this last quarter is bad, but as Apple cleverly releases its latest model right in the last week of the previous last quarter, this Q3 - that boosts their sales right at the end, and thus Apple showed a modest gain of 3% compared to Q2. Its less than the industry, but Apple's sales pattern as we know, is an annual 'step ladder' model, not a continuous growth curve, so this is not a bad sign. The big step is always the first full sales quarter of the new model, ie the iPhone 4 for Christmas 2012, ie now. And all signs suggest its going to be a big banner year again for Apple. What more can I say, they only use one OS platform. Lets move to strongly surging number three

HUAWEI - 16.0 million smartphones, 9.3% market share - profitable - A+

Huawei is surging strongly, becoming somewhat 'The Samsung of China' compared to the other Chinese smartphone makers, much like Samsung is far ahead of LG and Pantech in Korea. Huawei management said a few weeks ago that they are on target to hit 50 million total smartphone sales this year, so that means they are far outperforming their nearest Chinese rival ZTE which is reporting a lack of progress towards their sales targets. Huawei does all of its smartphones on Android, is profitable, grew 45% from Q2, that is definitely a performance worth an A+

SONY - 8.8 million smartphones, 5.1% market share - profitable - A

Welcome back to the strong team, Sony! Finally Sony is back where we expect the powerful consumer brand to be. It is growing far faster than the industry - grew 19% from Q2 and is reporting healthy profits out of smartphones once they abandoned the unprofitable Windows nonesense and concentrated on Android. The Sony migration from dumbphones to smartphones is nearly complete. They now command 5% market share which is twice what they had two years ago when it was still the SonyEricsson partnership selling smartphones on all platforms including Symbian. I grade Sony for Q3 as a solid A.

ZTE - 8.0 million smartphones, 4.7% market share - profitable - C

ZTE was doing well but now is stumbling a bit, they kept pace in size from Q2 while the industry grew by 11%, so in reality, ZTE is falling behind. ZTE sells primarily on Android but also in tiny numbers on Windows Phone. They are profitable, I grade them a C

HTC - 7.8 million smartphones, 4.6% market share - profitable - D

HTC is moving seriously backwards in the pack. HTC is actually declining in shipment numbers and fell 11% when the industry grew by 11%. They are reporting almost perennially 'worse' profits per quarter, still profits yes, but ever diminishing. HTC does 3% of its smartphones on Windows Phone and 97% on Android. I grade HTC as a D.

RIM - 7.4 million smartphones, 4.3% market share - loss-making - F

RIM three years ago this time was the second biggest smartphone maker in the world with 21% market share, strong growth, and highly profitable, highly desirable enterprise and consumer smartphones. Then they decided to take their eyes off the ball, launched a tablet, wasted all their marketing effort in that disaster, lost their position in the consumer space and badly stumbled in the enterprise space. One year later, they were at 15% market share, and two years later at 9%. Now, three years after their peak, they are at 4% and falling. RIM sales fell 5% in units from Q2 and they report a loss. This is a performance worth an F. The only silver lining, the new BB10 operating system is ready, the reviews of it are great, and the first new Blackberry 10 smartphones are coming in Q1 of 2013. Expect one more quarter of severe pain at Waterloo, then hopefully we see a turnaround in this former powerhouse puwer smartphone maker.

LG - 7.2 million smartphones, 4.2% market share - profitable - B

Hey, LG is finally back! Life is Good, isn't it? They are finally back from the pain of Windows and at purely Android, are finally back to reporting profits again. LG grew 11% from Q2 which is the same pace as the industry. I grade LG as a B.

LENOVO - 7.0 million smartphones, 4.1% market share - profitable - A

And welcome to the Top 10 for the first time ever for Lenovo of China better known for having bought IBM's personal computer business a few years ago. You never saw a Lenovo branded smartphone, which they cleverly branded as the LePhone? That must mean you don't live in China then. Up to now, LePhones have not been sold in other countries than China, but Lenovo has become the third bestselling smartphone brand of China domestic market already behind only Samsung and Huawei. So yes, those 7.0 million smartphones were all sold just in China in Q3 (the world's biggest smartphone market growing faster than most others, already accounting for 3 out of every 10 smartphones sold globally). Now, Lenovo is aiming for world domination, so they are just launching their first international expansion to India. Lenovos are all powered by Android (interesting choice, isn't it, considering how close Lenovo is/was to Microsoft with Windows haha). Yes, welcome to the Top 10. For strong growth from Q2 and profitable business, I grade Lenovo's first appearance on our Bloodbath blog series, at a full A.

NOKIA - 6.3 million smartphones, 3.7% market share - loss-making - F-

Nokia 21 months ago was the world's biggest smartphone maker so huge, it towered over all rivals, bigger than its next two rivals, combined! More than twice the size of its nearest rival at the time, Apple and four times bigger than Samsung. Nokia's smartphone unit just 21 months ago reported record growth and record profits and a Nokia record jump in profitability. Nokia's smartphone unit was growing faster than Apple's on an annualized basis. Yes, that all was voluntarily thrown away by the new CEO. Today under new CEO Stephen Elop's mismanagement and misguided Windows strategy, the Nokia smartphone unit has tumbled to 10th in the Top 10 and may fall out of the Top 10 by Q4 of 2012. Nokia is literally only one quarter the size of Apple and one ninth the size of Samsung, and Nokia's smartphone unit keeps reporting ever more hideously huge losses. Its Windows Phone based 'Lumia' series sales peaked in Q2 and even those are now in decline, never having captured even 3% market share at its peak. Compare that to Nokia's own Symbian which had literally almost 10 times better market performance, literally, 29% market share, when Elop announced this idiotic strategy. So how is the magnificent Windows Phone doing for Nokia now, in Q3? Surely, after a year of selling that 'wonderful' Microsoft based OS, it must do better than the 'obsolete' Symbian by now? This is Nokia's split of smartphone sales in Q3:

NOKIA SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEM
Nokia smartphones on Symbian/Meego . . . . 54%
Nokia smartphones on Windows Phone . . . . 46%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

Thats pretty pathetic for Windows Phone and Lumia. The new Lumia re-launch is now going on in Q4 with Windows Phone 8 which is supposed to be all that you ever wanted in a smartphone OS - where have we heard that before, again, and again, and again? No, it won't set the world on fire. Windows Phone 8 based smartphones will never even match the peak of the Windows Phone 7 smartphone market share - which was 3% - and these new Lumia smartphones will capture only a fraction of that total. This is a suicidal strategy, every other handset maker who tried Windows as the primary system has died doing it, or bled so much in losses, they abandoned that path. Nokia will be gone unless it shifts now to Android (like every other Windows maker of the past who survived, and far more likely Nokia is already so damaged, they will simply die as a smarpthone maker. As I predicted on 11 February, 2011, the Microsoft 'partnership' will be good for Microsoft but deadly for Nokia, and that in the end, Nokia will become a slave to Microsoft and turn into a low-cost 'box mover' like Dell in personal computers, with tiny margins at best. The glory days of Nokia are far past. And yes, its very likely that the next time I write this quarterly analysis, Nokia will no longer even be listed as a Top 10 maker, because there are hungry fast-growing Chinese Android-powered low-cost smartphone makers - led by Yulong, very hungry to get into the global Top 10. Yulong sells its smartphones under the brand Coolpad. Keep your eyes on them, very possibly will kick Nokia out of the Top 10 as soon as Q4 of 2012. For Nokia's loss-making disasterous Q3 when the industry grew 11% from Q2, Nokia smartphone sales declined .. wait for it .. 38% !!! in just one quarter !!!  This is one of the worst one-quarter performances by any smartphone maker ever seen, unfortunately I can't give them a worse grade than an F-

MOTOROLA (Google) - fell out of Top 10

Yes, just a brief mention, Moto-Moto is soon dead as a Dodo-Dodo.. They fell out of the Top 10 already globally and are shrinking and making losses and Google is firing a lot of their staff globally. They make some nice top-end smartphone models, but in miniscule numbers now.

OPERATING SYSTEMS

So then lets do the same for the operating systems.. And as before, in order of size, first comes Google's own juggernaut, already selling more smartphones and tablets powering this operating system every quarter, than all Windows powered personal computers, tablets and smartphones - combined! Here we go..

ANDROID - 121.2 Million smartphones, 70.7% market share

Android has won the race by now, yes powering 7 out of every 10 smartphone sold globally and more amazingly, over four times more Android smartphones are sold than the second bestselling smartphone OS in the world (iOS on iPhones). There really is no longer a 'race' in this side of the smartphone bloodbath, congratulations Google for winning the biggest battle in tech, ever. And winning it quite decisively, in very short time. Just two years ago, Android was only half the size of Symbian and had just overtaken Apple's iOS and Blackberry for second place. Yes, only a short 27 months ago, in Q2 of 2010, Android was in fourth place among smartphone OS platforms by new sales. Now they command the market and are more than four times bigger than number two and 16 times bigger than Blackberry, and 35 times bigger than Symbian and 37 times bigger than the next 'multi-vendor' OS platform, Microsoft's Windows Phone. Ok, how do those Android manufacturers split up this booty? Here are the market shares internally for Android makers:

ANDROID SMARTPHONES SOLD IN Q3 BY MANUFACTURER
Samsung . . . . . . . . 42%
Huawei . . . . . . . . . . 13%
Sony  . . . . . . . . . . . . 7%
HTC . . . . . . . . . . . . . 6%
LG . . . . . . . . . . . . . . 6%
Lenovo . . . . . . . . . . . 6%
Others . . . . . . . . . . 20% 
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

iOS - 26.9 million smartphones, 15.7% market share

Apple's iOS is doing its steady second place job as the most expensive premium smartphone platform out there, loved by its users with incredible loyalty. The market share growth has slowed to a snail's pace. It was 14% this quarter two years ago, 15% last year this time and now slightly under 16%. I have been calling for Apple to make a global shift, release lower-cost smartphones, and end the one-new-model-per-year cycle. Apple does that with its Macs and iPods and even the iPad has broadened its product range, but with the iPhone, they stick to only one new model per year. They are leaving a lot of money on the table, and perhaps unrecoverable market share, that now is going to Android.

BLACKBERRY - 7.4 million smartphones, 4.3% market share

Yeah, same story here as in the above. Blackberry hurting and have to suffer one more quarter before the new BB10 smartphones arrive. Luckily for RIM, they have enterprise customers as their primary customer segment, who are not as fashion-oriented to run after the latest shiniest device, but make decisions on several-year horizons, and are willing to keep buying some Blackberries for their employees as they await BB10.

bada - 5.2 million smartphones, 3% market share

And Samsung's bada is a very rare animal at most Western markets, perhaps with the exception of France but is doing brisk sales in places like Russia and India. This OS was launched at the same time as the highly visible Windows Phone two years ago, and quietly, targeting low-cost customers, only powered by Samsung brand, where the primary Samsung effort went to Android, this little engine that could has totally bested Microsoft's effort, even where Nokia was brought in to put the best Lumia effort to sell Windows Phone. bada holds a steady 3% market share globally, as Samsung is preparing to do the first launches of its new OS, Tizen, developed with Intel and which is expected to take over or be merged with the bada project. First Tizen smartphones are expected to be out in early 2013 and one of the early prototype handsets is, no surprise here, a port of the Galaxy S3 to Tizen. Tizen also has many global operator/carrier groups supporting it, so if you ever thought what the carriers meant when they said they wanted a new platform to rival Android and iOS, they were not talking about Windows, they were talking about Tizen. So who are those operators supporting Tizen then? Telefonica, Sprint, Vodafone, Orange, NTT DoCoMo, SK Telecom.. Plus manufacturers part of Tizen alliance include Panasonic, NEC and Huawei. Do not dismiss this challenger for next year...

SYMBIAN - 3.4 million smartphones, 2.0% market share

Nokia's Symbian is now really on its last legs. The last new smarpthone we saw on it was the 808 Pureview, and even as Nokia fumbled that launch, not producing enough of the highly popular and highly demanded (really? Yes, so said Nokia, they couldn't match demand and severely underestimated its sales when it launched) super cameraphone. But that time is now over, Symbian sales fell 32% just from Q2 and with only obsolete devices for the Christmas market, expect Symbian sales to plummet now. Obviously all last remaining partners of Symbian had quit this OS and what remains are truly only Nokia branded sales.

WINDOWS PHONE - 3.3 million smartphones, 1.9% market share

Windows Phone had its peak share just hitting 3% one quarter ago, but then Microsoft announced that none of the current phones can be upgrade to Windows Phone 8, and just like all major analysts suggested, the sales would collapse as they did. Windows Phone sales fell 28% in just one quarter (where that announcement came within that quarter, so we have not even seen a full quarter's effect yet). Now Microsoft is rolling out Windows Phone 8, with ever less new handset manufacturers sticking with Microsoft, each doing ever less actual devices and ever less actual markets. Its essentially only Nokia left with Microsoft. This is the split of Windows Phone smartphone sales in Q3:

WINDOWS PHONE SMARTPHONES SOLD IN Q3 BY MANUFACTURER
Nokia . . . . . . . . . . . 88%
Samsung . . . . . . . . . 5%
HTC . . . . . . . . . . . . . 5%
Others . . . . . . . . . . . 2%
Source: TomiAhonen Consulting Estimates November 15, 2012 from vendor data and other sources
This table may be freely distributed

Windows Phone 8 will now include full Skype integration. Do you think that will thrill the carriers/operators into fully supporting WP8 if they were lukewarm to WP7 ? Remember what Nokia's CEO Stephen Elop said about do carriers love Skype? He said, and I quote "feedback from the operators is, that they don't like Skype, of course." Where did Stephen Elop utter that statement? To the Nokia shareholders meeting this Spring! That was after they had seen Lumia with Windows Phone 7 - that did not have Skype pre-installed - and before the carriers had been given the chance to see the new Lumia which comes with Windows Phone 8, fully integrating Skype. And yes, Microsoft brings that full Skype integration to the destktop on Windows 8 etc. A billion new competitors to the main profit engine and revenue source for carriers, voice traffic (especially international voice traffic) and messaging. No wonder the carriers hate Skype. Do not think Windows Phone 8 can outperform Windows Phone 7. The carriers not just hate Skype, they hate Microsoft for owning Skype and funding their biggest threat to the very financial survival of the telecoms operators/carriers. 

MEEGO - in hybernation

I'll just mention briefly MeeGo. It has emerged that Nokia had 3 MeeGo devices ready to sell last year, only relased one for sale, the highly-praised and beloved N9, and manufactured its sister device, the N950, in tiny numbers but didn't sell that. I speculated on this blog, based on my analysis of some of Nokia's strong markets like China and Nokia statements (or lack thereof) about MeeGo and N9 performance, that in the first two quarters when both Lumia series on Windows Phone, and the sole N9 on MeeGo, the MeeGo unit sales actually exceeded all of Windows Phone. Well, that is water under the bridge. We never got a formal word from Nokia on the specific numbers of MeeGo sales. And many thought MeeGo was over, until.. a small start-up in Finland, formed out of ex-Nokia ex-MeeGo people, called Jolla, had launched. Jolla is expected to introduce its first handset still this year, and start to sell smartphones powered my MeeGo (or likely, a further developed version of that operating system) soon. Lets not forget MeeGo. But lets say, it is in hybernation. But if you loved the N9 or N950, just imagine what the next MeeGo device could have been. We may well see that, in the first Jolla device soon...
 
Ok, that should be the analysis of Q3, in the Electric Jamboree. We will return in early February 2013 for the Q4 results and full-year 2012 results as per usual. Also at that time, we can find out who won the reader contest to guess what will be Windows Phone market share now this Q4 of 2012. If you wanted earlier numbers, Q2 of 2012 is here. Meanwhile, enjoy the stats, and remember all this data is free to be shared

(also for those who may want to order my statistical volume on the handset industry, the ebook, TomiAhonen Phone Book 2012 - please note, that due to Hurricane Sandy, my webhost on Manhattan's 14th street is currently still fighting the aftermath of the flood, so my ebusiness site, and my primary website, and my email are all currently not operational - if you desperately want the Phone Book 2012, please send me an email to my temporary email address ttahonen at yahoo dot com and put in your email header 'Phone Book' and I'll get back to you with how to order, etc. I hope to get the website and ebooks and email all back soon)
 

Comments

[RyanZA]

@Baron95

Still not getting it.. so again I'll repeat it. Google is never planning to make money off Android. They are trying to turn the OS platform into a commodity as it is a complement to their core web business.

10 years old now, but still just as applicable as it was 100 years ago: http://www.joelonsoftware.com/articles/StrategyLetterV.html

Google makes web software. The cheaper they can push access to their web software the greater the demand for web software becomes. The whole idea behind Android is to push down any barriers (including cost) for users to use Google services. Same for chrome OS, same for their push into fiber public networking.

So again: Google will not make money off Android. Google is not trying to make money off Android. If Google makes money off Android, expect them to lower prices until they aren't anymore. This is the opposite strategy to Apple and is why Apple and Google are at war.

[Mr Eric Wu]

@Earendil Star
Elop said on Feb 11th 2011 that MS will pay "billions, plural". MS has been paying $250,000,000 per quarter for some time now. Give what Elop said, there must be more than 4 quarters in the contact and probably 2 years total. You'd see (in the company reports) that MS continues to pay it, regardless of success. MS can fired it's top people, but they still pay the money - so it is water tight in the contract.

The transaction is not as simple as a one-way-payment however. For every WP7.5/WP8 phone produced there has to be a license purchased (cost unknown but I guess about $15 to $25). There are minimum numbers required, and also a tired cost scale. The result is that although MS give $250,000,000 some goes straight back in lieu of licenses, however there will never be a case of it all going back (e.g. the amount is always cash positive for Nokia).

It works like this. If Nokia goes all in and fails, MS pays out loads to compensate. If however MS is right and WP is as successful as they expect, then Nokia does not get as much money but yet has a viable business.

The exact amount is never disclosed publicly, but the rough workings (above) are.

br,

Mr Eric Wu.

[Tomi T Ahonen]

About Nokia payments to Microsoft

Hi Piot ! Good to see you back haha.. Thanks for that comment. Yeah, like Eric Wu just posted, Microsoft is paying Nokia 250 million dollars per quarter in marketing support to help launch Windows Phone, but Nokia pays an undisclosed royalty to Microsoft for every Lumia handset. The Microsoft payment is, like Piot wrote, in Nokia Quarterly results.

At the moment the payment is likely very lop-sided, ie Microsoft is receiving back far less in royalties than what it pays quarterly to Nokia, and no doubt, all parties involved are disappointed at how poorly in absolute numbers the Lumia series is selling right about now. I would think, that somewhere in the 10 million Lumia units level the payments should be about equal, and once Nokia sells more than that, it starts to pay out more than Microsoft's support brings in, and while we don't know the length of the Microsoft support contract, we'll find out soon enough when it has ended, as it won't show up in the Quarterly results anymore... I am expecting 2 years, 3 years max. And I have also been reporting the Nokia ASP prices and smartphone unit profitability (ie loss-making) also in real commercial business, when that Microsoft subsidy is removed, to illustrate the market acceptance level of Lumia (which in revenue and profit/loss terms is obviously 250 million dollars per quarter worse than Nokia reports for its smartphone unit).

Keep up the great discussion..

Tomi Ahonen :-)

[RyanZA]

@Mr Eric Wu

"Over the life of the agreement, both the platform support
payments and the minimum software royalty commitments are expected to measure in the billions of US dollars.
The total amount of the platform support payments is expected to slightly exceed the total amount of the
_minimum software royalty commitments_."

I think you may have slightly misread that?

1) If Nokia does poorly, they will receive a lot more money from Microsoft than they pay out.
2) If Nokia does 'okay' (their expectations), then they will receive slightly more than Microsoft than they pay out.
3) If Nokia does better than expectations (never gonna happen, but they can dream), then they will pay out far more to Microsoft than they receive in payment. So the deal with MS is mostly a fallback case where Nokia does poorly - if they do well, then they will pay out far more in license fees than they receive in support payments.

Pretty bad from Nokia's point of view in my opinion.
If Nokia does badly, MS will pay them - but not enough to keep Nokia afloat.
If Nokia does well, they will spend the bulk of their profits paying license fees to Microsoft.

...Elop is about as good at working out contracts as he is at running companies. ;)

[Louis]

@various people: It is curious that the usual Symbian/Maemo/Meego crowd has converted to Android. (Or not, since the main attraction of Meego seems to have been not being Apple, so, eventually the Meego crowd would come around.)

Anyway, with respect to the "marketshare always wins" argument, one may be forgiven for being skeptical when Android has 70% of the market and nothing like that in terms of profit or innovation. This doesn't mean it's wrong, but certainly that wasn't the pattern with Windows.

If you want a counter-example, look at Groupon, which was also based on scaling first. Eventually, it got to the point of nearly every possible customer being on its lists, and then tanked. The point is not that the businesses are similar, but that this argument needs to be adapted to each case.

@tomi: "The critical central point of that digital convergence is the mobile service, that is delivered to our pockets through that gadget we call the mobile phone (increasingly, a smartphone). The one player, that has a certain path to that future is the carrier/operator who owns the spectrum and then builds a Billion-dollar network infrastructure with typically 10,000 base stations and antennas around the country, to serve their millions of clients. So if we look at mobile advertising or mobile banking or mobile commerce or mobile social media of the future, the only 'guaranteed' winner who will be there, is the evolution of what we now think of as the carriers/operators like Vodafone, Sprint, Telefonica, China Mobile etc."

Again, if this was really the case, shouldn't we see it happening? The carriers in Europe are in a price war brought on by innovation at the edge of the network. They haven't been able to close up Android, and, if they can't restrict what services are on phones, they are selling connectivity only. This means they will have a nice business, but selling petrol isn't the "converged center" of the auto industry.

The operators basically haven't launched a new product that's gotten wide acceptance since, maybe, flat-rate calling plans.

[cycnus]

@Louis

There might be several reason that Nokia user ran to android...
1. They heard "Microsoft", and they ran away because they remember Windows CE, Windows Mobile...
2. They heard "Microsoft", and they ran away because they know OS/2, Novel, Netscape, Sendo...
3. They heard what Elop did, and they don't want to use the Non-Elop platform
4. Android simply the best
5. Google did Android the right way.
6. User were smart, they know Android is better than Microsoft
7. What Microsoft did in Desktop browser war & Desktop OS war dent Microsoft name/reputation.
8. Microsoft = Not good quality
9. This image of Steve Balmer make them puke ( http://cdn0.hark.com/images/000/000/290/290/original.jpg & http://www.inflexwetrust.com/wp-content/uploads/2012/10/steve-ballmer.jpg & http://maxcdn.fooyoh.com/files/attach/images/1097/457/636/steve-ballmer.jpg & http://www.tvkon.com/images/misc/06/12/ballmer_the_musical.avi/00000011.jpg )

[cycnus]

http://www.useit.com/alertbox/windows-8.html
Nokia will be dead...!!!

[MarcoAustria]

The next problem for Nokia: Windows Phone 8 has „freezing issues“.
So the new Lumia 920 has problems like almost every Lumia.

„Early adopters of Windows Phone 8 hardware are complaining that it reboots at random, up to several times a day, and that they're not being offered any prospect of a quick fix.“
source: http://www.theregister.co.uk/2012/11/19/windows_phone_8/

The suggested solution is funny indeed:
“Support staff from the three companies have reportedly been suggesting rebooting, removing the beta release of Skype and (in the case of Nokia) booting the phone without a SIM for ten minutes, then booting with the SIM back in again, which apparently worked for one user.”

First of all, they have the solution from a user – so no clue where the root cause is. Secondly the annoyed customer has to de-install Skype (remember the software from Nokia's best buddy Microsoft). Finally the customer has to do annoying SIM switching, so that the freezing issues are possible(!) solved.

[Lasko]

And the Windows plague goes on - now on your smartphone:

http://discussions.nokia.com/t5/Nokia-Lumia/Nokia-Lumia-920-freezing/td-p/1604040
http://answers.microsoft.com/en-us/winphone/forum/wp8-wpupdate/8x-reboots/fe9b8cb5-b4cd-4aea-bcaa-672c5cbb5d1c
http://forums.wpcentral.com/htc-8x/200872-reboots.html
...

So much for that.

[cycnus]

Maybe Windows 9 will fix that....
LOL

[Lasko]

Have you paid any money for Google Search lately? Or Google Plus? Or YouTube? Or Mail? Or Text and Tables? Or Maps? Or any other Google service, which costs them gazillions of dollars to develop and operate?

It is actually quite shocking to see how some people aren't able to understand even basic economic correlations.

As a service company like Google your sole metric is usage. Without having (basically) sold a single mobile device, 70% of everyone owning a mobile device, rapidly increasing and beeing the future of computing, is using Google services - that's unpayable. And Android is the guarantee it stays that way.

It doesn't matter what it costs to create and maintain Android, it doesn't matter if they make any money selling it, and it doesn't matter if they make any money in the Google Play Store. As long as people use Android and use Google Services that amount of money is negligible compared to the value for Google - and it cannot be measured in figures.

If you can't understand this you are either a moron or a troll - and in the case of you two most probably both.

[Winter]

WP8 has problems?

It is always amazing how the quality of "the best software money can buy" is so much worse than Free software.

The same with "the best developers money can hire".

[cycnus]

@Winter,

Actually,
At certain level, free software IS BETTER than commercial software.

For example,
Anyone here aware that Windows 8 OS have 16 Gigabyte in size. (I'm not certain if the phone version of Windows 8 is the same size of the tablet). and google OS only have size around 300MB... WHY???
---> ***I think*** that's because microsoft trying to create a 'death trap' in their OS, they were so affraid of counterfit, so that they create an OS full of 'trap' that will trap any modification.

on MAP....
anyone here know the openstreet?
OpenStreet map have a better accuracy because they don't have to include the easter egg.
Easter Egg on map is a FALSE map so that when someone else copy it, it can be proven.
**Ex.A park, An alley in the place where it's not there.
**Ex2. In digital copy, some area have certain coordinate value marked, that might make the map off by a couple of centimeter.

and...
as lasko said...
if you can't understand this..... probably both.

[cycnus]

http://en.wikipedia.org/wiki/Trap_street
(for my post above)

[darwinphish]

@Lasko:

You wrote, "As a service company like Google your sole metric is usage. Without having (basically) sold a single mobile device, 70% of everyone owning a mobile device, rapidly increasing and beeing the future of computing, is using Google services".

The fallacy here is the assumption that all Android users do, in fact, use Google services. Do you think all of the millions of Android users in China are doing mobile web searches with Google or are using Gmail? How about the millions of users who buy a Android phone for less than $100 and use it essentially as a feature phone? And as we have seen with Amazon, you can release an Android device devoid of Google services. Android success guarantees neither success nor future profits for Google.

@Baron95 and LeeBase. Google has not spent anywhere near $20 billion on Android. You are attributing the entire $12 billion purchase price of Motorola as an Android cost. However, Motorola came with $3 billion in cash, tax loss credits worth another $3-4 billion to Google and non-smartphone assets (e.g. TV boxes) that Google can sell off or monetize in other ways. I doubt Google has spent even $10 billion on Android.

[John Waclawsky]

Earendil Star If you read the comments you can see the coordinated support for Microsoft and the attempts at tearing down Google to distract from the real problem for Nokia: NO ONE WANTS A WINDOWS PHONE. This shilling is just Microsoft strategy. Lead by Baron95 and a few followers called "Microsoft Astroturfers"

[Felipeko]

@LeeBase
You sound like a broken record. Every page the same comment. Just to give you an answer, Google expects $10 of revenue from an Android user in the future. If they are in 1 billion pockets, it's $10B a year, but the way things are going, they will be in double that number when things are said and done.

So yea, great investment, they also got thousands of patents, killed Microsoft (they said at the beginning that was the real reason, if there were no Android we would be seeing a WP world right now), got great respect from developer and OEM community and will forever recognized for that.

[RyanZA]

@LeeBase

Google is now in a better position with slight control of Android than they were with zero control over Apple or Microsoft. Android itself has 'won' though, and Google will now focus on using their control so they can also 'win'. Not rocket science. Not even sure what you're arguing about anymore.

@darwinphish

http://www.appappeal.com/maps/gmail
The gmail website is the 12th most popular website in China. So someone in China is using gmail even with all the blockages by the Chinese gov.
Samsung devices are also major sellers in China, and those all require a Google account at present, even in China.

You're right about Android success not guaranteeing success for Google - but then you'd be equally right about web browser success (chrome) not guaranteeing success for Google - or search success not guaranteeing success for Google Ads (if everyone installed adblock). You could also say that Windows success in China isn't a guarantee of success for Microsoft if everyone in China just pirates Windows and doesn't pay MS. So Android not creating any revenue for Google also doesn't guarantee success if all device manufacturers spend money to strip out Google.

What do the above all have in common? They're all normal business risks, and you can assume for all of them that if the product is a success then that success will also help the company behind the success. It's far more likely that Android winning means Google wins.

(Personally: I don't particularly care if Google wins or not - I don't really like Google as a company, but I do like their products - Android is going to be a major factor in computing for a long time to come, and having that open driver existing is going to be great for humanity as a whole.)

[John Waclawsky]

...notice the on-going trend of just tearing down Google. But never getting to the core of the problem: NO ONE WANTS A WINDOWS PHONE! ...Window Phoneys at work LOL!

[Tester]

@Baron95:

>>But you can't ignore the negatives. By launching Android, Google caused Apple to do all it can to remove/limit/create_alternatives google services like Google Maps, Google Voice, Ad Sense, etc from the platform. It also cause Apple to increase integration with Facebook, Twitter, etc, that seek to exclude Google from advertising on their site, in favor of their own platforms. Microsoft, Amazon and maybe one day even Samsung will do the same.

Nobody can predict what will happen. But this point can be interpreted both ways: What would have happened to Google if Apple and Microsoft would have locked their platforms to their own services without Google having any alternative to keep those two in check? Now, that would have been the ultimate nightmare scenario and I'm dead certain that they would have developed their services anyway. Now Google has control over a large segment of the market itself where it can guarantee that vendor lock-in will not happen.

As for Samsung, why should they? I guess they have carefully analyzed how much money has been sunk by Microsoft into these things and how much revenue they got out. And to compete with Google on their core businesses they simply lack the infrastructure right now.
Amazon also can't be considered a serious competitor. Yes, they bypassed Google but they do not have anything to offer to compete with them. Their devices only serve one purpose: To make them sell content, nothing more, nothing less. A completely different customer base.

Besides, Samsung got to the top of the foodchain without vendor lock-in issues. Currently they are perceived as the good guys which massively boosts their business. Once that is gone things may crumble quite quickly.

>> You mentioned Chrome. Chrome and ChromeOS are other examples of Google investments that have not paid off.

So why? Certainly not to make money off these products. Google's interest is, as stated above, to keep the market open. Their biggest foe is Microsoft who, if they could would swallow the market whole and leave nothing to the rest of the world. Google has made damn well sure by now that this is no longer possible. This alone is an investment that's almost impossible to measure up in money. Its repercussions will be felt for many, many years to come and will ensure Google's commercial viability.

You mentioned Chrome. Chrome and ChromeOS are other examples of Google investments that have not paid off.

Also, Google has not proved that mobile ads can generate even a fraction of their revenue from PC Web ads. Users are just no clocking on ads that pop in a phone screen.

Google has clearly pissed off Apple and Microsoft. Just like Microsoft developed Bing, which ate 1/4 of Google's revenue. Apple has search in Siri, which completely bypasses Google, and may eat further into their search revenue.
You can argue that by developing and giving away Android, Google, motivated Apple and Microsoft to go after their revenue stream. That may be a heavy price to pay. Or it may work out. I'm just saying we don't know yet.