Q2 Smartphone Stats - Smartphone sales pass half-point of total handset migration rate

I know many are waiting the Q2 smartphone numbers. We finally have Gartner also releasing theirs, so I'll do the stats blog for Q2 a bit later today.

 

For those who are doing the math at home alongside us, the big number for Q2 (average of the 4 houses) is 232.7 million smartphones sold in Q2, up 9% from Q1. Yes, the quarter-on-quarter growth is bigger than anyone expected and we are well on target to hit about 1 Billion smartphone sales level this year. And separately, now Gartner has confirmed that in Q2 the world passed the point where more than half of all new mobile phone handsets sold are smartphones. 


BIGGEST SMARTPHONE MANUFACTURERS BY UNIT SALES IN Q2 2013

Rank . . Manufacturer . Units . . . Market Share . Was Q1 2013 . . OS systems supported (coming)[ending]
1 (1) . . Samsung . . . . 74.2 M . . 31.9% . . . . . . . ( 32.4% ) . . . . . . Android, bada, Windows (Tizen)
2 (2) . . Apple  . . . . . .  31.2 M . . 13.4% . . . . . . . ( 17.6% ) . . . . . . iOS
3 (4) . . LG  . . . . . . . .  12.1 M . . . 5.2% . . . . . . . (   4.8% ) . . . . . . Android
4 (5) . . Lenovo  . . . . .  11.4 M . . . 4.9% . . . . . . . (   4.2% ) . . . . . . Android (Tizen)
5 (3) . . Huawei  . . . . .  11.0 M . . . 4.9% . . . . . . . (   4.9% ) . . . . . . Android (Tizen)
6 (6) . . ZTE  . . . . . . . . 10.6 M . . . 4.6% . . . . . . . (   4.0% ) . . . . . . Android, Windows (Firefox)
7 (7) . . Sony . . . . . . . .  9.6 M . . . 3.8% . . . . . . . (   3.8% ) . . . . . . Android
8 (8) . . Coolpad/Yulong . 8.4 M . . . 3.6% . . . . . . . (   3.3% ) . . . . . . Android
9 (9) . . Nokia . . . . . . . .  7.4 M . . . 3.2% . . . . . . . (   2.9% ) . . . . . . Windows, [Symbian]
10 (11) . HTC . . . . . . . .  7.2 M . . . 3.1% . . . . . . . (   2.7% ) . . . . . . Android, Windows
Others . . . . . . . . . . . .  41.4 M
TOTAL . . . . . . . . . . .  232.7 M
Source: TomiAhonen Consulting Analysis 16 Aug 2013, based on manufacturer and industry data
This table may be freely shared


BIGGEST SMARTPHONE OPERATING SYSTEMS BY UNIT SALES IN Q2 2013

Rank . OS Platform . . . . Units . . . . Market share . Was Q1 2013 . . Manufacturers in Top 10
1 (1) . . Android . . . . . . . 183.8 M . .  79.0 % . . . . . ( 74.6 %) . . . . . Samsung, LG Huawei, ZTE, Lenovo, Sony, Yulong/Coolpad, HTC
2 (2) . . iOS  . . . . . . . . . . 31.2 M . .  13.4 % . . . . . ( 17.6 %)  . . . . . Apple
3 (3) . . Windows Phone . . 9.1 M . . .  3.9 % . . . . . (  3.0 %) . . . . . . Samsung, Nokia
4 (4) . . Blackberry . . . . . . 6.8 M . . .  2.9 % . . . . . (  2.8 %) . . . . . . (None)
5 (5) . . bada  . . . . . . . . . . 0.6 M . . . 0.3 % . . . . . (  0.8 %) . . . . . . Samsung
others . . . . . . . . . . . . . . . 1.3 M . . . 0.6 % . . . . . (   0.9 %)
TOTAL . . . . . . . . . . . .  232.7 M
Source: TomiAhonen Consulting Analysis 16 Aug 2013, based on manufacturer and industry data
This table may be freely shared


INSTALLED BASE OF SMARTPHONES BY OPERATING SYSTEM AS OF 30 JUNE 2013

Rank . OS Platform . . . . Units . . . Market share  Was Q1 2013  . Main Manufacturers of current base
1 . . . . Android . . . . . . . 829 M . . . 58 % . . . . . . ( 57 %) . . . . . . Samsung, Huawei, Sony, ZTE, LG, Lenovo, Motorola, SonyEricsson 
2 . . . . iOS  . . . . . . . . . 292 M . . . 20 % . . . . . . ( 19 %) . . . . . . Apple
3 . . . . Symbian . . . . . . 121 M . . .  8 % . . . . . . ( 11 %) . . . . . . Nokia, Sharp, Panasonic, Fujitsu, Samsung, SonyEricsson
4 . . . . Blackberry  . . . . . 69 M . . . . 5 % . . . . . . (   8 %) . . . . . . RIM
5 . . . . Windows Phone . . 33 M . . . 2 % . . . . . . (   2 %) . . . . . . Nokia, Samsung, ZTE
6 . . . . bada . . . . . . . . . . 23 M . . .  2 % . . . . . . (   2 %) . . . . . . Samsung
7 . . . . Windows Mobile . . . 2 M  . 0.1 % . . . . . . (   0.3 %) . . . . . . HTC, Samsung, LG, SonyEricsson, Palm, Motorola
Others . . . . . . . . . . . . . . 17 M . . .  1 % . . . . . . (   1 %)
TOTAL Installed Base . 1,386 M smartphones in use at end of Q2, 2013
Source: TomiAhonen Consulting Analysis 16 Aug 2013, based on manufacturer and industry data
This table may be freely shared

Note: The installed base for smartphones has been revised downwards from previous analysis, based on latest reported Android cumulative activation numbers from Google and some other smaller adjustments. This number reflects the best understanding of TomiAhonen Consulting as of August 2013, on the true installed base of smartphones globally, in line with best fit to recent published data on user surveys and regional numbers.

MARKET OVERALL

The smartphone market grew 72% year-on-year from 2009 to 2010. Then it grew 63% from 2010 to 2011 and last year, that growth rate mellowed out further to a still staggering annual growth rate of 42%. (adding nearly half new units sold in just one year - no other industry of similar size experiences this astonishing huge growth rates). So I had of course expected that market growth to mellow down some more, to something like 30% or 33% this year, adding another third to what was last year. But now the running rate, last 12 months, is up - yes up - from last year. The past 12 months (June vs June) the smartphone market has grown at 52% year-on-year.

SMARTPHONE MIGRATION RATE

I was the first to tell you, on this blog, that this year 2013 will be the year when we hit the 50/50 level of smartphone migration rate. It is not a difficult number to get, if you go by the math, but many analysts still even last year were predicting it would happen next year. For the record, this is the migration rate of new sales of smartphones vs all phones, as percentage:

Global Handset Market Smartphone Migration Rate, as percent out of new handset sales
2009 . . . . . 14%
2010 . . . . . 21%
2011 . . . . . 30%
2012 . . . . . 40%
2013 est . .  53%
Source: TomiAhonen Consulting Analysis 16 Aug 2013
This table may be freely shared

LOW COST SMARTPHONES

This growth rate is fuelled very strongly by low-cost smartphones running Android, especially in China which is now the massive juggernaut selling 37% of the world's smartphones - the Chinese domestic market was the size of 88.1 million smartphones according to Canalys for Q2 of 2013. Thats more than 2.5 times bigger than the US market for contrast (32.9 million also according to Canalys).

And for the really stormy clouds on the horizon - check out who has just moved in Q2 to third ranking in smartphone market size ahead of the UK and Japan - India. India's domestic smartphone market is now 9.0 million smartphones per quarter and more than doubling annually. India's market is not Apple's iPhone, it is low-cost Androids (and some Blackberries still). So where we saw Chinese domestic makers like Lenovo and Coolpad/Yulong emerge as Top 10 global players while selling almost exclusively only to their home Chinese market, expect this to now happen with India domestic handset makers like Micromax and Karbonn 

The US market which once was a quarter of all smartphones sold worldwide is now 14% and as US smartphone migration is nearing completion and the overall mobile penetration rates are past 100% per capita, the US smartphone market grows at far slower rates than the industry average. If you are a US based smartphone maker (Apple, Google-Motorola, HP) then yes, you should attempt to hold onto a big slice of your home market, as any handset maker should be strong in its home market (like Nokia in Finland and Samsung in South Korea or Sony in Japan). But to think the US market is a signal for how the world plays out, is as wrong as to think the world will buy Hummers as their cars, just because some Hollywood types bought them haha..

SMARTPHONE BRANDS

So its now a market of Samsung and Apple, plus the 9 dwarfs. Sammy has a third of the market, give or take a few points. Apple is under one fifth. Together they have about half the market, give or take a bit. Both are highly profitable and do their thing. Apple focuses on the most desirable niche - a market they have explored very well but they are bound to reach the end of that garden soon and must consider if they want to see more unit growth - meaning moving down-stream in model range to lower-priced iPhone models, like they did with the iPod, etc. Meanwhile Samsung does what Sammy has been doing for years, they are copying the (past, winning) Nokia strategy - every conceivable smartphone model, form factor, type and price point. On multiple OS platforms, no problem. Not as big margins per phone as Apple but huge profits nonetheless. Poised to own the world. By the end of the decade every mobile phone handset sold will be a smartphone and it looks like a solid bet, that about a third of those will be Samsungs (but no, not a fifth of them iPhones unless Apple starts to ship us lower-cost iPhones.

Did you notice that across all phones sold, Apple's iPhone market share is just about the same as the historical average was for the Macitosh, about 8%. The iPhone in Q2 had 7% of the world's handsets sold. So yes, thats the reality of the global handset market)

Then we have the 9 dwarfs. LG, Lenovo, Huawei, Sony, ZTE, Yulong/Coolpad, Nokia, HTC and RIM. Like a game of musical chairs, 9 contenders for only 8 slots in the Top 10. Last quarter it was HTC which fell out of the Top 10, now it was Blackberry, with HTC sneaking back into the 10th slot. But equally at the top, fighting for number 3, we've had 3 different rivals at 3rd largest in the past 4 quarters (Sony, Huawei and LG). We may well see Lenovo snatch that 3rd ranking next, as it expands its smartphone portfolio aggressively outside of China now.

Yes, the relevant point is, can you sell in this sector profitably. Sony, LG, Lenovo can; Nokia and Blackberry can't. Others are somewhere inbetween. Every one of these 9 has had at least some quarters in the past 3 years where they reported losses in this smartphone bloodbath race - but at least the trend is clear, going to Windows makes you always report losses (LG, Nokia, etc), and abandoning Windows but going to Android will always bring you from losses to profits (Sony, LG, etc). And notice, four of this group of nine are Chinese manufacturers, none of which were a Top 10 smartphone maker five years ago.

So much for the brands today. The differences between one of these 9 in that range of 3% to 5% market share and another is pretty trivial, except for who make profits fighting in this space.

OS PLATFORMS

Then we have the OS war. It was won by Android last year as I reported here on this blog. Then Apple has its slice at the top of the price range. The rest is now truly irrelevant noise. Windows? Yes, its back to being the third largest smartphone OS (was 2nd largest, back when Bill Gates still ran the company). But being third, and having 4% of the market share, where that market share is still down from 5% before the Nokia alliance was announced, and Nokia has since abandoned 33 points of market share to produce the 1 percent DECLINE in Windows market share in smartphones - yes, one has to wonder how long can Microsoft and Ballmer continue in the fruitless pursuit. Throwing good money after bad. They promised us that the carriers wanted a third ecosystem. Not this badly. Selling Nokia Lumia smartphones for two years at a loss, and Windows can't do better than 4%. The only reason that we have 4% as 'the third' ecosystem is because Blackberry decided to implode (and is now seeking a buyer).

But we'll see soon of the carriers do infact want a third ecosystem. Firefox smartphones are coming and Tizen is just around the corner. Then, as we've heard Nokia and Microsoft executives, from Stephen Elop on down, complaining that carriers don't want Windows - if they really want a third ecosystem, we should see Firefox or Tizen or both picking up steam. If that happens, I think management at Microsoft will soon pull the plug. They had 2 years all to themselves to pretend to be the third ecosystem and it netted them a loss in share. If new rivals can now come and snatch that victory from the clenched jaws of Microsoft, I think we can see the writing on the wall.

This 'horse race' is no more a race, there is no action. Its like Formula 1 was at the peak of Michael Schumacher's era, when he won the season about half-way into the season, and races were pretty much meaningless. At least on the handset side, there is some excitement among those 9 dwarfs.

Ok, I'll do some specific stats still for Android split etc.. hold on.


MANDATORY NOKIA RANT - FIRE ELOP NOW etc

I have to insert my Nokia rant here - Nokia had over 70% of the Chinese smarpthone market in 2010 before the Elop Effect and Nokia's brand loyalty was strongest of any handset brand in China. Nokia had over 805 of the India smartphone market and was the strongest brand in India, period. Ahead of any other brand of any good or service. And today Nokia has fallen out of the Top 5 in China in smartphones, and lost its top spot already in India. Nokia's Symbian and Ovi based ecosystem was by far the strongest in what was already then the world's largest smartphone market - China still grows today at doubling-per-year rate - and also in the country that has now become the third largest market. The Ovi ecosystem was the second largest app store by downloads when Elop killed the strategy. Only Nokia's Ovi had carrier support with over 130 carriers offering carrier-billing (one-touch billing without credit-cards, straight off your phone bill or your prepaid account balance). Ovi supported over 60 languages including all major languages of China and several of the biggest in India. This all he threw away for Windows which when he selected it had 5% market share and today, two years later, is down to 4% globally and which didn't have any support in Chinese languages or Indian languages, and no carrier deals and even today has miniscule app downloads.

Most of all, the smartphone growth is all in low-cost smartphones. Symbian had smartphones selling in the sub-100 dollar range by 2010 and was perfectly suited to this market segment, for years to come, expressly because of the ecosystem support. Elop destroyed a profitable cash-cow for Nokia, and gained in exchange, nothing. Even Nokia's USA handset sales today are no better than they were in 2010 before he took over. Note, I am not claiming Nokia should have stayed with Symbian only - Symbian was not long-term viable as I was explaining on this blog before Elop was even hired. But understand that Nokia's migration path of its customers was to a Linux-based alternative OS, that used the same app store and the same developer toolkit - called Qt - was based on Maemo and MeeGo. Note that MeeGo is a cousin of Android, many Android apps can run natively on MeeGo or with a modest port by the developer, not a total rewrite as is required for example with Windows. And unlike Microsoft's way, Nokia built a migration path from Symbian (with Ovi and Qt) to MeeGo. Microsoft is so unfriendly to its developers, it kills off new operating systems even when they are fresh, like Windows Phone 7.x which is not compatible with Windows Phone 8.x 

So no, I am not dumb enough to suggest Nokia should go back to Symbian (anyone posting such comments will be deleted, I have never once suggested that on this blog, I was all supportive of the migration away from Symbian before Elop even was hired). I am suggesting, that the path to MeeGo was far better than this Windows nonsense. What Nokia should not have done, is to kill its cash-cow, Symbian. No other tech company has been this dumb ever. When SonyEricsson shifted from Symbian to Android, they ran both side-by-side for years. When Samsung went from Symbian to Windows Mobile, it ran both systems side by side, for years. When HTC went from Windows to Android, it didn't end the manufacturing of Windows, it still does both. When LG went from Symbian to Windows, it kept both in production for years. When Sony went from Windows to Android, it kept both running parallel for years before ending Windows. The only moron to kill its old OS when announcing the new, is Elop. THAT was corporate market share suicide. That was moronic. That was doing an Osborne Effect to Nokia's own OS and its own market-dominating position. Remember, that Symbian-based Nokia smartphones grew more new sales in 2010 than Apple's iPhone or Blackberry or Samsung. Yes, Symbian, while clearly no longer the most competitive OS, was able to outgrow even the iPhone in 2010. Check out the numbers. Not the 'growth rate' which always favors the small guy. I mean absolute growth numbers in millions of units. Nokia's Symbian smartphones grew the most in 2010. That is not a dead platform. That is a cash cow that had years left in it, to help propel Nokia to its new future on MeeGo.

So I never said Nokia should 'go back to Symbian' - I have been most critical of how Elop suddenly killed his cash-cow - Nokia's smartphone unit had never produced a loss in its history. Since Elop announced the change, the smartphone unit was plunged into loss-making and has never once produced a profit since. Nokia is still selling its Lumia smartphones today at a big loss per unit shipped. So yes, now I am now suggesting, that Nokia has to abandon Windows and go to Android, to try to save what is left of Nokia.

Yes, Nokia strategy with Windows is a total failure and the man responsible for thus destroying Nokia's market-dominating position globally, must be fired. (Mandatory Elop rant ends).

More to come..

The analysis part is still coming plus some other stats.. hold on.. (PS Thanks to reader Winter on spotting the typo)

Comments

[Pekka Perkeles]

Fire Elop Now! :-)

[Pekka Perkeles]

If I guess right, Lenovo, Huawei, ZTE and Coolpad/Yulong together sell way more in Chinese market than Apple in the whole world.

Interesting, isn't it?

[Winter]

@Baron95
"OMG!!!! What is happening?"

I sounds as if you might need clean underwear?

Still, these repeated "This time WP will surely take off!" are beyond funny. But the numbers do prove that if you sell WP phones way below cost, you actually can get rid of them.

[Winter]

Android will reach 1B installed base this year. Probably in November.

That is a milestone.

In comparison, Android churns out the total installed base of iOS in less than half a year. The total installed base of WP in two weeks.

Today, I saw a Huawei billboard for an Android phone in the Netherlands. The competition is ehating up (again).

[Winter]

Tomi,

You are still working on the post. But the totals of the first two tables do not match. You can delete this comment.

[foo]

The rumors are getting louder:

=== Nokia to launch Windows RT tablet in September, alleged pictures leak ===

http://www.theverge.com/2013/8/16/4627220/nokia-windows-rt-tablet-pictures-leak-rumor

Can it be true? Can Stephen Elop be *that* crazy?

He saw that Microsoft lost almost $1 BILLION trying to sell tablets, why would he try to do that?

Looks like a perfect ending, the final chapter in the Elop Effect book.

[Winter]

@foo
"He saw that Microsoft lost almost $1 BILLION trying to sell tablets, why would he try to do that?"

So the tablets are now a loss of Nokia instead? Improves the books of MS.

[foo]

@Baron95
> A Windows Phone Maker (Nokia) passed a previously Android market leader (HTC) in volume and market share!!!!

That is surprising indeed.

But don't forget that 3 years ago Nokia was *much* bigger than HTC. So it went from "much bigger" to "slightly bigger, fighting for the scraps of the market".

> Windows Phone firmly established as 3rd ecosystem with 3.7% market share

I wouldn't say "firmly established" considering that 3.7% is closer to zero than to the second player.

> Nokia, instead of falling off the top 10 list, as predicted here by Tomi and many others, is - wait - moving up the list.

The big question is: can Nokia survive much longer with a lunatic CEO and less than 3% of market share?

[BK]

It's fun to see HTC so close to Nokia at the bottom. It was always their dream to become Nokia biggest rival. I don't think though they meant it such way :D

[BK]

@ He saw that Microsoft lost almost $1 BILLION trying to sell tablets, why would he try to do that?

They also saw other vendors (Acer, Asus) cancelling their RT support and lineup. So he might feel this has to be great chance to demonstrate his elopness once more :D

[Darwinphish]

Tomi:

Can you shed a little light on how you calculate installed base? I am not doubting your numbers, just wondering how you arrive at them.

Thanks.

[AndThisWillBeToo]

HTC missing from list of WP manufacturers. Huawei too. Both listed by e.g. IDC. Please update.

[Bjorn]

Here's interesting detail:
according to Canalys Lenovo sold 95% of its phones in China.
If Lenovo would lose its domestic sales, it would sell 570 000 phones and drop out of the list to somewhere in the rounding errors.
If Nokia would lose its domestic (Finland) sales, it would stay exactly where it is in the list.
It's interesting that we get to see what is effectively a local player in list of Global sales.

[Winter]

@Bjorn
"It's interesting that we get to see what is effectively a local player in list of Global sales."

Funny. China takes care of 37% of the global Smartphone market. Losing that market is "painful". Finland will not register on a global scale.

Btw, Apple got around 45% of its Q2 sales in the USA.

[Tester]

@Baron95:

>> all with 4"screens.

And here it will get interesting. Essentially this means there's very little incentive to upgrade from an iPhone 5. CPU speed is mostly a geek-only factor if the older device is still considered fast enough.

It means that Apple still has nothing to compete with in the growing large screen market which is completely owned by Android right now.

[foo]

@Baron95 "3 - Will carriers continue to invest in the 3rd ecosystem (Windows Phone) as a bargaining chip or surrender to Apple and Google/Samsung?"

Why should they?

They can use Apple against Google, and Google against Apple. No need for a third one, specially one backed by Microsoft.

By the way, when it comes to the third ecosystem, my questions for the next quarters are:

1) Will Firefox OS become successful?

2) Will it steal market share from Windows Phone?

Firefox OS is cheap, is supported by carriers and manufacturers. It is a much better protection against Google/Apple/Microsoft, since it promotes the use of open standards. Apps developed using HTML5 and Javascript should run with little or no modification on all platforms.

So... I think it has potential, but we need to wait and see.

[Tester]

@foo:

>> Apps developed using HTML5 and Javascript should run with little or no modification on all platforms.

You know, the same has been said about Java Mobile - but reality was quite different. Wanna bet that the same will happen here? All you need is some manufacturer who 'supports the standard better than all the other ones' and chaos will ensue.

'Write once, run everywhere' has been proven an utter failure in the past and a lot needs to happen for that to change. Besides, most users want native apps not offline websites.

[Bjorn]

@Winter

You got my point quite well. Chinese market is huge. Lenovo, Huawei, ZTE, Coolpad all sell majority of their ~10M sales in China. Definitely with gentle push from Chinese government. Imagine BlackBerry making some agreement in China that would hand them sales of Coolpad? BlackBerry would grow their global sales 150% overnight by just getting a foothold in one country.
When one country has such a big footprint on statistic, I start to thirst for "rest of world" numbers.

[Tester]

@Baron95:

Yes, the iSlaves may patiently wait for the iPhone 6, but what about the more casual users? Also don't forget non-US markets that have completely different dynamics with far less Apple dominance, both in people's minds and in the press.

Apple is playing a dangerous game here. They already missed one chance to keep the lead last year and it looks like they'll miss another chance this year. No, it won't irreparably harm their market situation but it certainly won't help. These kinds of screw-ups will be felt, even by a company like Apple.

The thing is, Apple is pricing the iPhone at the very top end of the market but when I look into spec sheets and similar stuff these days, it is merely an excellent mid-range phone, albeit heavily overpriced. I get similar specs on Android for a bit more than half the price Apple is asking for. Say what you want, but Apple really needs more options so that all the people willing to spend good money on their next phones may consider them. Right now they are completely losing the large screen crowd and it looks like they will be losing them for another year - which may well mean forever.

About Firefox: On principle I agree - and as a software developer I thoroughly hope that the system ends up a stillborn failure. This is something nobody needs except the marketing people trying to shove something new down people's throats. But we never know how the market will react. It has one thing going for it: There's no 'evil' name like Microsoft or Google attached to it which might attract a certain group of malcontents but beyond that I really see no market for it, if some Android manufacturer manages to keep prices as low as FF OS devices.

[boran59]

Only those who were from Microsoft/Elop will talk about ecosystem war. Why would a carrier use Windows to threaten/negotiate Google/Apple. The carrier will use another handset maker to threaten/negotiate with. The carrier will use Oppo/Lenovo to negotiate with Samsung/HTC/Sony. The carrier will use HTC to negotiate with Samsung. What a fail analogy made by Microsoftian!!!

@Bjorn

Look it from different angle. Lenovo brand/distribution channel is worldwide, if Lenovo use it's power to start spreading to more region, it would become a major player that might topple Apple/Samsung easily.

@Tester

The problem with Java is it's too complicated for developer to give a good run anywhere because the standard/experience across device is bad (Bad at scalability). The web browser on top of Linux OS (FireFox OS) would give a better experience since HTML is better at scalability. And HTML standard also open and not governed by 1 company

>Apple is playing a dangerous game here....

I think Apple is trapped with post-Jobs syndrome. They still feel they were the king of the world, and all carrier will kneel before them because they own the holly grail of phone. Google/Microsoft/Blackberry share a 10% revenue if the user buy an apps through carrier billing/purchase. Apple don't want to share revenue/power/flexibility to carrier. I believe more and more carrier will kick Apple ass for being too greedy and too stuck up, and I'm really looking forward for apple to fall even more deeply.

>About Firefox

If Google can capture 20% desktop market in USA with Chromebook, why Firefox couldn't get a good percentage of user with FireFox OS? I think for FF to success, it need to be priced around US$40 - US$ 100.