Rest of Decade Forecast for Smartphones, All Mobile Phones, PCs, Tablet and All Computing Devices including OS platforms

We are at a rare point in history where essentially all factors of 'noise' into a forecast have been essentially quieted down. We can do a very confident forecast for the tech industry for the rest of this decade, ie to end of 2020. We have suddenly a lot of clarity in the biggest part - the smartphone space, plus the dumbphones, the tablets, and PCs, as well as their operating systems.

In the past months we've seen the last major play in its end-game: Nokia and Microsoft. It could have been a major disruptive force especially on smartphones but also tablets. Now we can see that it will be a nuisance factor at best. We've seen Apple's clear adjustment from a pretender-to-mass market to the reality of profitable niche play only. So yes, iPhone market share is down to about 14% annually and declining, and across all phones sold (including dumbphones), iPhones have stabilized at 8%. Its pretty much exactly what I said from the start, that Apple's game is 'profitable high end niche' and long-term, iPhone would settle into the same scale as the Mac was in the PC industry, in single digit market share. Same will be true of course also of the iPad over time and the trends are clear in that direction as well.

Then there was Blackberry's failed return-attempt with BB10, the new operating system. Well that went badly. Blackberry barely survives outside the Top 10 smartphone makers (was the world's second largest smartphone maker as recently as four years ago, and generating huge profits back then). And what of Samsung's major play in the OS space? Tizen has been totally trivialized and is perhaps a niche play for them but can't be seen as a major threat to the big boys unless Samsung totally change that strategy in a hurry.

Android has already defeated Windows as the world's most used computing platform (when tablets and smartphones are included in the computer definition). The total computer industry has come around to accepting the defintion that a smartphone is yes, a computer. A personal computer used mostly for communication, gaming and internet browsing but those were also the major uses of PCs in recent years especially after the rapid growth of social networking led by Facebook, Twitter and YouTube. And that is once again, exactly as I predicted on this blog and still to this day, the only statistics we see in the public domain about annual computer sales that count all computer types from mainframes to desktops to laptops to netbooks to tablets to smartphones to PDAs, is of course this blog. I had my 2013 stats reported here.

LETS PREDICT MOBILE HANDSET MARKET AND SHIFT TO SMARTPHONES.

How is the total global handset market growing? Quite slowly actually. So we've mostly looked only at hte big 'Bloodbath' battle in smartphones but the big picture is 'all mobile phones' including featurephones that do full internet and mostly also have touch-screen inputs and nice cameras, as well as the ultra-cheap basic dumbphones that do mainly communicating with voice and messaging and perhaps a rudimentary camera. The total handset industry sold about 1.85 Billion mobile phone handsets last year. We passed the half-way point of new phone sales being smartphones and for the full year 54% of all phones sold were smartphones. This year by about Q4 we will hit the milestone where two thirds of new phones sold will be smartphones. It is now clear, that before this decade is done, all new phones sold will be smartphones. The time of dumbphones and non-smart 'featurephones' is coming to a rapid end. Several of the classic phone manufacturers who started in the dumbphone era have already shifted all of their handset production from dumb to smart, led by Motorola (then owned by Google, now being taken over by Lenovo) and Sony (then of SonyEricsson partnership). Samsung will complete its transition from dumbphones to only smartphones within about a year or so. 

So I am modelling about 50 million new unit sales in total handset size per year, ie growth of about 3% for the total industry size annually. We should breach the 2 Billion handsets sold per year about year 2016. And the migration from dumbphones to all new phones sold being smartphones I have happening around early 2019. So this is my prediction of new phone sales by type:

GLOBAL HANDSET MARKET BY MOBILE PHONE TYPE 2013-2020

ITEM . . . . . . . 2013 . . . 2014 . . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . 2019 . . . 2020

Dumbphones . 860M . . . 660M . . 465M . . . 280M . . .140M . . 40M . . . . 0 . . . . . .0
Smartphones . 990M . . .1.2B . . . 1.5B . . . . 1.7B . . . .1.9B . . 2.1B . . . . 2.15B . . 2.2B
Total phones . 1.85B . . . 1.9B . . . 1.95B . . . 2.0B . . . 2.05B . .2.1B . . . . 2.15B . . 2.2B 

Forecast by TomiAhonen Consulting July 2014
This table may be freely shared

So the non-smart handset market is now going to experience a rapid decline while it had held steady for many years on a plateau-level. This is where most of the Nokia handset business is now, after Elop reversed the migration rate progress that Nokia held in 2010 (when it was leading the industry of legacy handset makers in the process of migrating from dumbphones to smartphones). Today of the Microsoft-owned Nokia handsets, only 12% are smartphones when industry is at 57%. Back in 2010 before Elop messed it all up, Nokia's migration was at 24% when the industry was at 21% (and Nokia was achieving its migration profitably while most of its rivals like Motorola, LG, SonyEricsson and Samsung reported losses in some of their quarterly results in their handset units as they struggled with this costly transition).

Now Microsoft inherits a 'strong' position in a dying market. When we ignore the smartphones, and only look at the dumbphone market, the 'Nokia' brand is actually bigger than Samsung there, as the global leader with 27% market share of this rapidly-vanishing market. Yes, Nokia managed to snatch defeat from the jaws of victory. No wonder Satya Nadella is firing half of Microsoft's new ex-Nokia staff. That business will vanish within the next few years and cannot possibly sustain that huge a labor force, as 88% of the Microsoft-owned handset business is now dumbphonest that can't even support any version of Windows.

What does this mean for Microsoft's global handset market share? When the Nokia purchase was announced last year, Microsoft's Ballmer proudly bragged about the Nokia handset business controlling 15% of the world's handset market (even though Lumia only held 3% and Windows Phone less than 4% of the smaller smartphone part of that market). That was down to 14% by the time the full year 2013 data came out. It will now be down to 10% for full year 2014 and 6% in 2015. Meanwhile we've seen how much the world hates Lumia and Windows Phone, as the first partial month of sales of the Nokia X Series running Android took 1 out of every 5 Nokia branded smartphone sales (and now in haste, Microsoft has shut down the X Series project with all intended X Series smartphones being converted to Windows Phone instead). So Windows Phone is failing spectacularly. That was before MIcrosoft fired half of the handset labor force and causes more disruption with the emergency-shift in the OS platform. Can Nokia's Lumia and Microsoft's Windows Phone grow market share in this horrid environment? Of course not. I am however, modelling Microsoft to keep a toe-hold in the market, with roughly flat 'Nokia' smartphone sales for this decade. That means in terms of market share that of smartphones, MIcrosoft-Lumia will see gradual market share decline from 3% in 2013 to 2% in 2015 to 1% by 2019 out of the smartphone market. I expect Nadella to shut down the loss-making Lumia unit long before we see 1% market share for the doomed handset division of Microsoft.

What of Apple? Well, we now know that while the iPhone market share in the smartphone sector has been declining now for several years, and was 16% last year and is now at 14% annnual level, the iPhone overall market share when measured in the total handset market ie including dumbphones has settled into a steady position of about 8% market share of all phones, when looked at the global market. The iPhone sold 150 million units last year. I see still some growth left, and the iPhone selling about 170 million units this year and growing to a level of 185 million by year 2020 when the iPhone would have 8% of total global handset market when all phones sold are smartphones.

Then what of Samsung? I believe Samsung will have to respond to the eroding profitability of its handset business, and manage the pressures of market share versus profit. It will attempt to find new profits from new parallel businesses that can be served alongside smartphones (smart watches, smart TVs etc) but for the phone business, I see the Samsung smartphone market share in modest but steady decline. Samsung will safely be the world's largest handset maker and largest smartphone maker and largest computing device maker for this decade - that battle was already won in that Nokia-customer-giveaway that Elop arranged so he could collect his personal bonus of 25 million dollars for wrecking Nokia's business (actually worth 31 million in the end). But that battle is also now decided. Samsung will continue to face market share pressure from the bottom with lower-cost rivals and see profitability squeeze at the top. I project Samsung to see a one market share point drop per year till 2020 (roughly) so from 31% of smartphones to 24% of smartphones in 2020. But of all phones, Samsung thus grows from 18% in 2013 to 24% by 2020, as the rest of the world of low-cost phones catches up to Samsung's lead in the migration from dumbphones to smartphones.

By 2020 Samsung will be shipping about 550 million smartphones which would be 3 times what Apple does with iPhones (today Samsung ships a little over twice the level of smartphones vs Apple). But very much like what we saw with Nokia earlier (when it was still managed semi-sensibly) the profits of the global mass-market leader will be nothing like the profits reported by the luxury brand niche leader. Apple will be the most profitable handset maker by profit margin and total profits reported, Samsung will be the only other handset maker to consistentlu report profits every quarter but its profit margin will be far smaller than Apple's. It will be just like BMW and Toyota in cars, Apple being the luxury niche BMW and Samsung being Toyota the total global mass-market producer competing in every price segment and using scale to its profit advantage.

There will be new number 2 and number 3 rivals who will ship more phones than Apple by then, the strongest candidates now are Lenovo and Huawei but LG, ZTE, Coolpad and Xiaomi would also all be in the running for the second and third largest (smart)phone makers by 2020. But apart from the leap performed by Lenovo when buying the Motorola business from Google, none of these players has consistently performed market gains for several quarters in a row, so as of now, we can't see who is the strongest of this pack. I think it safe to say HTC, Blackberry and Sony are out of that race however.

If Samsung holds about 24% in 2020 then the number 2 rival from the above list should get to double-digits rather well, say around 12% to 15% market share and a third rival could hover around the 10% range. Apple's iPhone would then clock in at maybe 4th largest (smart)phone maker with its 8% market share in 2020. Apple is currently the third largest phone maker, so this will be a drop in rankings at some point in the coming years.

OPERATING SYSTEM WARS

Thers is no war left in the smartphone operating systems. That which was legitimately called the tech war of the century, was totally comprehensively won by Google's Android two years ago when they totally whipped Windows and destroyed Microsoft's chances in that game. Android holds 80% market share of new smartphones sold today and that is only growing. When we add Apple's 14% it means all other pretenders have to fight for the left-overs, the last mabe 4% to 6% which then goes to Blackberry, Windows Phone, Firefox, Sailfish, Tizen and whatever else might still show up. 

When we look at it more in terms of total phones, there is that diminishing Asha share and other Nokia featurephone operating systems S40 and S30. So if we look at the total handset market by operating system, including the migration from dumbphones to smartphones, then the battle of the OS wars looks like this:

GLOBAL HANDSET MARKET BY OPERATING SYSTEM 2013-2020
(Table includes OS platforms for both Dumbphones and smartphones)

ITEM . . . . . . . 2013 . . . 2014 . . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . 2019 . . . 2020

Android . . . . . . . 42% . . . 52% . . 62% . . . 71% . . .77% . . 83% . . . .87% . . . . 89%
iOS . . . . . . . . . . . 8% . . . . 9% . . . 9% . . . 9% . . . . 9% . . . 9% . . . . 8% . . . . . 8%
Asha/S40/S30. . . 12% . . . . 8% . . . 5% . . . 2% . . . . 1%. . . 0% . . . . .0% . . . . . 0%
Windows Phone . . 2% . . . . 2% . . . 2% . . . 2% . . . . .2% . . 2% . . . . .2% . . . . . 2%
Blackberry . . . . . . 1% . . . . 1% . . . 1% . . . 1% . . . . 1% . . . 1% . . . . 1% . . . . . 1%
Other (dumb) . . .  34% . . . 27% . . 19% . . 13% . . . .  7% . . . 2% . . . . 0% . . . .. .0%
Other (smart) . . . . 1% . . . . 1% . . . .2% . . . 2% . . . . 3% . . . 3% . . . . 3% . . . . . 4%
Total phones . 1.85B . . . 1.9B . . . 1.95B . . . 2.0B . . . 2.05B . .2.1B . . . . 2.15B . . 2.2B 

Forecast by TomiAhonen Consulting July 2014
NOTE: TomiAhonen Consulting believes Windows Phone will be ended by Microsoft before this forecast period is completed, as the platform is drain on profits and will not grow in market share. When Windows Phone is ended, its primary benefactor in market share will be Android.
This table may be freely shared

So yeah, the battle was won when Android won the smartphone wars. Now as the market shifts from building the market to shifting the 'laggards' of the market from dumbphones to smartphones, there is almost no more space to bring in new platforms. If Samsung were to run Tizen now, it just might still be able to make a dent into that picture but they have to hurry with it (And if they do, I will of course return here with a revised forecast to show how it impacts the big picture, if they are able to get enough both carreirs to support Tizen and other handset makers). Firefox, Sailfish and others, are in that 'other smartphone OS' category on the bottom. Firefox now my favorite dark horse but if they are able to climb to 2% globally in the coming years, that would be epic performance there...

COMPUTERS, FIRST JUST PC AND TABLET MARKET

So next lets look at the classic PC market and its latest variant, tablet PCs (as my regular readers know, I was among first to point out that while outwardly they may seem similar, a tablet is not a large smartphone it is an ultraportable PC, its does sit between the two but is NOT a 'mobile' in the way a smartphone or dumbphone is. Tablet, as author Gary Schwartz so well put in his latest book, 'immobilize people' ie when you take out a tablet, you stop walking, you want a Starbucks to sit down, and have a coffee and a good chair to sit at, when you use a tablet. But a smartphone we can use while we continue walking. A smartphone is 'mobile' while a tablet I argue is actually an 'anti-mobile'. It forces us to behave in an anti-mobile way. Thus its only an ultraportbale PC. Yes, very important for the smaller PC industry but pretty meaningless for the far larger smartphone and mobile phone business. And also, not one pure handset maker (like Blackberry, Nokia etc) has been able to turn tablets into profits, only those that are also PC makers (like Apple, Samsung) have been able to make profitable business out of tablets, as they are more like personal computers, both in use cases and by their sales and distribution channels. But yeah, you heard it here first. Don't count tablets into the same class as smartphones and don't trust any 'expert' or 'analyst' or 'forecaster' who still in 2014 makes that basic mistake. We have ample user-evidence that end-users behave differently with their smartphones and tablets, even as there is obvious overlap.

With that. lets look at my forecast for the PC market excluding smartphones but including tablets. First please not that I count the cousins into the same 'family' so ChromeOS is counted with Android, Mac OS with iOS, Windows Phone with Windows etc, as families of OS's that compete against each other, and tend to have some application etc synergies within the families. Now, remember, while I started my tech career on the PC side, my recent competence is mobile phones, not PCs, so this is more a hobby for me than my core knowledge. But as I've been reporting on that convergence across these digital devices, then yes, lets do the personal computer forecast (including tablets).

GLOBAL PERSONAL COMPUTER MARKET BY TYPE 2013-2020 (including tablet PCs)

ITEM . . . . 2013 . . . 2014 . . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . 2019 . . . 2020

Desktop . . 125M . . . 110M . . . 95M . . . . 90M . . . 80M . . . 75M . . . 65M . . . .60M
Laptop . . . 190M . . . 180M . . 170M . . . 150M . . .130M . . 110M . . . 90M . . .  70M
Tablet . . . .185M . . . 215M . .  240M . . . 275M . . .310M . .340M . . .375M . . 410M 
Total PC . . 500M . . . 505M . . .510M . . . 515M . . 520M . . 525M . . 530M . . .535M

Forecast by TomiAhonen Consulting July 2014
This table may be freely shared

Note a pair of interesting milestones .This year more tablet PCs will be sold than other portable PCs ie laptops (which includes notebooks and netbooks). Then by year 2016 tablets will acount for half of all PCs sold. Now lets plug this all into the big tech 'computing device' market and see how that plays:

ALL COMPUTING DEVICES BY TYPE WHEN SMARTPHONES INCLUDED (but dumbphones excluded)

ITEM . . . . . . . 2013 . . . 2014 . . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . 2019 . . . 2020

Classic PCs . . . 315M . . . 290M . . 265M . . . 240M . . .210M . . 185M . . 155M . . .130M
Tablet PCs . . . . 190M . . . 215M . . 240M . . . 275M . . .310M . . 340M . . 375M . . . 410M
Smartphones . .. 990M . . 1.2B . .  1.5B . . . . 1.7B . . .1.9B . .. . 2.0B . . .2.1B . . . 2.2B
TOTAL . . . . . . 1.5B . . . .1.7B . . . 2.0B. . . . 2.2B . . . 2.4B . . . 2,6B . . . 2.7B .. . .2.8B

Forecast by TomiAhonen Consulting July 2014
This table may be freely shared

So smartphones obviously are the big play already accounting for 2 out of every 3 new computing devices sold but by 2015 smartphones make up 75% of all computing devices sold worldwide. Now lets see how the operating system wars play out.

ALL COMPUTING DEVICES BY OS WHEN SMARTPHONES INCLUDED (but dumbphones excluded)

ITEM . . . . . . . 2013 . . . 2014 . . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . 2019 . . . 2020

Android . . . . . 58% . . . . 65% . . . . . 69% . . . 72% . . .. 75% . . . .77% . . . 79% . . . 81%
iOS . . . . . . . . 18% . . .  16% . . . . . 15% . . . 14% . . . . 13% . . . 12% . . . .12% . . . 11%
Windows . . . . 22% . . . . 18% . . . . . 14% . . . 12% . . . . 10% . . . . 8% . . .. . 7% . . .  6%
Other . . . . . . .  2% . . . . . 2% . . . . . . 2% . . . . 2% . . . . . 2% . . .  3% . . . .  3% . . .  3%

Forecast by TomiAhonen Consulting July 2014
This table may be freely shared

Android already accounts for well over half of all computing devices shipped worldwide and right at the end of this year, around Q4 we'll pass the point where two thirds of all computing devices shipped run Android (mostly smarpthones and tablets obviously). Windows will see its fall contineu and about the end of this year or early 2015 we'll see the cross-over point where more iOS devices ship per quarter than all Windows devices (desktops, laptops, tablets and smartphones) combined, meaning Windows falls to third ranking as it lost its top ranking to Android already two years ago, Windows will be down to 10% computing market share by about 2017 (which is an astonishing failure to understand the future by Microsoft which still in the last decade still powered 90% of all computers sold). Android will pass 80% during 2019 and Apple will continue to hold double-digit market share out of all computing in particular by its strong hold of the tablet space which is exceptionally well suited for Apple's core, media and advertising. Its Mac and smartphone market shares will be single digits but tablets well into double digits still year 2020.

I do see a mild growth in alternate OS platforms, very likely someone is able to break through somewhat. Not Blackberry but perhaps Firefox or could be something still new (or yes, Tizen if Samsung gets its act together). But that race will be so costly and hard, in terms of entrenched platform and their apps, that a new OS would grow very slowly and mainly only within one sector of the big picture.

INSTALLED BASE 2020

What will the computing environment look like on current definitions and devices (so ignoring new tech coming along like google glass, smart watches etc). I see the installed base in 2020 to consist of 4.4 Billion smartphones in use and 2.2 Billion non-smartphone computers (mostly tablets but also desktop and laptops). There will still be about 250 million last non-smart phones in use, very strongly then in the Emerging World markets and half of those in Africa. The OS wars will look like this:

INSTALLED BASE OF ALL COMPUTING DEVICES INCLUDING SMARTPHONES AND TABLETS 2020 BY OPERATING SYSTEM

Android/Chrome in 2020: 4.4B devices in use and 69% of installed base
iOS/Mac in 2020: 1B devices in use and 15% of installed base
Windows in 2020: 800M devices in use and 12% of installed base
Rest in 2020: about 200M devices in use and 4% market share
TOTAL: 6.6 Billion computing devices in use globally

Forecast by TomiAhonen Consulting July 2014
This table may be freely shared

Why is Apple's market share so much stronger here vs the new sales? Its because Macs and iPhones and other iGoodies tend to be used very long past the first buyer. Parents give their iToys to their kids, and iProducts have a very long afterlife. The Windows market is mostly PCs not phones, so they too have somewhat longer average spans than Android. Android is so strongly handsets, which have a fiercely fast replacement cycle, their installed base is not as big as the new sales even in year 2020.


Thats my forecast for you. We have exceptional clarity now in 2014, after the very tumultuous past few years, and I am quite confident this is roughly how it goes. The biggest confidence I have on the mobile side obivously but as it is the driver also in the overall convergence so am pretty confident also on the computers side to this forecast.

And who am I? The guy who wrote literally 'the book' about this industry (mobile) on how it makes its money, as well as the first book about its apps and services etc. 12 books later I am referenced in over 140 books by my peers and Forbes measured me in 2012 to be the most influential expert in mobile. I am by far the most accurate forecaster in mobile too, but past performance is no guarantee that future forecasts would be accurate and do remember no forecaster can always be right. We all make mistakes. No forecast is perfect. But professional forecasters try to be less wrong than the industry and to report when there are significant changes to their forecast (some 'experts' just publish a new radically changed forecast without even bothering to tell you why its now totally different...)

Comments

[Aryan Ameri]

The total disregard for Chromebooks and ChromeOS is interesting.

I think laptops' decline won't be anywhere as steep as you expect, if there is a decline at all. But I expect a good portion of the laptop category, as well as educational and some corporate PCs to shift to ChromeOS.

And that is the only thing I disagree with. The rest, I mostly agree with.

[Tomi T Ahonen]

Hi Aryan

I am sorry, I was not clear, I have to go edit the story - I count ChromeOS and Chromebooks as part of Android (And various MAC OS as part of iOS family)

Of the laptop migration, the early evidence is very clear most of tablet sales growth now coming at expense of laptops....

Thanks

Tomi Ahonen :-)

[BabelHuber]

What I do not understand is the prediction that mobile phone sales will remain over 2 Billion devices per year:

As the commodization of smartphones continues, I predict rather declining sales (as armchair analyst). I see two reasons for this:

- Contracts where you automatically get a new phone every two years seem to be declining. Instead more and more contracts factor in the phone separately (e.g. you pay €25/month for two years for your SGS5 or iPhone 5s, but afterwards you only pay the fee for the mobile contract - if you do not buy a new phone)

- Smartphones are becoming 'good enough':

- If you are not a gamer, you do not need more horsepower
- Screen sizes should remain roughly the same
- LTE with 50Mbit/s is good enough for most people, you hardly notice a difference with LTE 100

Honestly I do not see new 'killer features' on the horizon - bigger screens, more power and LTE were important during the last few years, but we have all of this now.

When I look at Samsung, I clearly see a pattern here:

- SGS: Was a very good phone in its days, but still seemed slow sometimes, e.g. when surfing
- SGSII: Dual core, bigger screen, higher resolution, ==> felt faster and better overall
- SGS3: Quad core, higher resolution, LTE ==> made really a difference when surfing, no big difference anymore for most apps
- SGS4: Faster quad core, higher resolution ==> the difference is not very noticable (tried it out for myself)
- SGS5: Slightly faster quad core, same resolution, a few gimmicks like fingerprint scanner ==> hardly a difference anymore

Now cheap Huawei phones are as good as the SGS3 meanwhile.

So my question: Why shouldn't people keep their phones longer? If they do so, sales will slow down I guess...

[Tomi T Ahonen]

BabelHuber

Great question and argument. Yes, if people were to start to hold onto their phones longer, yes the cycle would become longer and annual sales numbers slow down and decline. However, every single year the average replacement cycle has been shrinking or holding, not increasing. What you observe is probably from US market where still most phones sold on contract (most other countries have long since shifted so that majority of mobile accounts are prepaid, with a few exceptions like Japan). Those still, even with 2 year contracts, the trend is towards multiple handset ownership so the owners will then balance two accounts so, that every alternate year they get a new phone on one network or the other. As the Industrialized World has passed the point where more than half of us have now 2 or more accounts most of us also thus carry two phones (not all). That again helps accelerate the replacement cycle overall.

But yeah, in most markets, there is no connection between contract type and replacement cycle. So regardless of prepaid or postpaid, both types of customers see a regular decline in the replacement cycle (shorter cycle, faster replacement of phones).

I was the first to report on this bizarre trend in the world as we first observed it in Finland at the time. I also have the most accurate models calculating that rate and am monitoring it keenly. If the replacement cycle slows down, I will be the first to report it here haha...

But great observation and argument. It may still go that way towards the end of the decade if the handset evolution kind of 'stalls' - but there is really no sign of that when I look at advanced phones like we have here in Asia, and as they even spread to laggard markets like the USA haha...

Tomi Ahonen :-)

[cornelius]

@Tomi
I believe Chromebooks should count as Linux more than Android. Linux has 1.37% market share according to Stats Counter http://gs.statcounter.com/#desktop-os-ww-monthly-201306-201406
I can't believe you didn't even mention Linux. I thought you were a Finn.
On a side note, I watched a documentary about the Winter War. What an amazing story.

[przemo_li]

Tomi I just can not agree with turn rate for PC and tablet PC.

~50% of those are corporate, and however I look at those I can not see tablets replacing those in corpo environment. While thin client is not ready to be usefull for using tablet as terminal.

And there are also gamers, who wont do without their 300+Wats monsters-instead-of-GPU.

So only tech that would allow such feat would be ability of plugging those tablets to power supply, big 19'+ monitor and full keyboard. Like some current corpo notebooks are used.

But even with this, its improbable, as tech (performance) is not there still.

And for gamer niche. Well its still very big, and mouse & keyboard & big screen & big power supply are too important. Mobile gaming should decrease that number, but even consoles could not at their best kill off PC gaming.

So I think that those numbers a too extreme, because of those two groups, who are not gonna switch so suddenly.

[AndThisWillBeToo]

So #1 player will be Korean. After that number 2 and number 3 rivals who should ship more phones than Apple by then, the strongest candidates now are Chinese and Chinese but Korean, Chinese, Chinese and Chinese would also all be in the running for the second and third largest (smart)phone makers by 2020."

What's wrong with this picture? Where's the rest of the world?

[abdul muis]

Tomi,

first, the pc versus tablet number. I was surprised you think that it will be like 25% PC/notebook vs. 75% tablet. I think since tablet is new right now, so the person who doesn't owned a tablet, but own a PC/notebook will prioritize to get tablet. But once it's saturated, the tablet percentage will going down little by little, while pc/notebook percentage going up little by little and find it's equilibrium point. I don't know what it will be, but 25% PC vs. 75% tablet is kind of surprising number to me. Because I think tablet only good for media consumption, and PC still better for media creation. Do you think tablet will replace PC/notebook as media creation device at the office? Do you think you will be able or feel better writing / managing this blog on tablet instead of pc/notebook?

2nd, I agree with @aryan, a couple of days back, Chromebook might be the next big things for desktop/notebook. http://www.omgchrome.com/acer-chromebooks-popular-say-analysts/ and chromebook is not a tablet, so it should be count in PC/notebook.

[abdul muis]

Tomi,

first, the pc versus tablet number. I was surprised you think that it will be like 25% PC/notebook vs. 75% tablet. I think since tablet is new right now, so the person who doesn't owned a tablet, but own a PC/notebook will prioritize to get tablet. But once it's saturated, the tablet percentage will going down little by little, while pc/notebook percentage going up little by little and find it's equilibrium point. I don't know what it will be, but 25% PC vs. 75% tablet is kind of surprising number to me. Because I think tablet only good for media consumption, and PC still better for media creation. Do you think tablet will replace PC/notebook as media creation device at the office? Do you think you will be able or feel better writing / managing this blog on tablet instead of pc/notebook now or in the future?

2nd, I agree with @aryan, a couple of days back, Chromebook might be the next big things for desktop/notebook. http://www.omgchrome.com/acer-chromebooks-popular-say-analysts/ and chromebook is not a tablet, so it should be count in PC/notebook.

3rd, BB market share. 1% out of 2 billion is equal 20 million phone / year. right now BB is struggling to sell 10 million phone / year. is it a round up?

4th, (a question) So apple peak out, but will survive in 8%-9% market share?

[WonTheLottery]

Samsung and Apple still numbers 1 & 2 in 2020? Mmm...

Watch out for Huawei, their own Kirin processor already outperforms Apple's A7 and Samsung's Exynos in the Antutu benchmark, not bad for the new kid on the block. On top of that they don't have the baggage of 'greedy, short-termist' shareholders to deal with.

Huawei is an extremely ambitious company that is already producing high quality hardware at a very reasonable price and they're growing fast. I think it will be squeaky bum time for both Samsung and Apple long before 2020.

[Ben]

I was also surprised to see tablets overtaking desktops and notebooks so forcefully in your projections. I couldn't imagine my life without a big screen and a keyboard at my desk to get real work done.

I'm quite happy with my recently purchased BB Z10. It's a workhorse and an email beast, but I would never write any lengthy emails or do any editing on it if I didn't have to. There's also my web surfing habits. I currently have over 200 tabs open in firefox on a 24in monitor. I don't see any phone or tablet in the foreseeable future being able to come close to matching that experience.

It's a shame about BB, Jolla, and now Tizen even. It seemed like they were all (well BB and Tizen at least) so close to securing a sizable minority of the market but have sputtered out. I wish Jolla would have come out with a very expensive super phone (which I would have bought had it worked properly) and carved out a real niche for themselves. It was too good an opportunity to waste on mediocrity.

[Aryan Ameri]

In Tomi's defence of his laptop/desktop/tablet projections, let me say that the distinction between these will blur even more, and I could see a scenario where the majority of them are tablets, but hooked up to a big keyboard and monitor (perhaps all wirelessly) "to get work done".

If that scenario comes to pass, the vast majority will be fine with tablets as their main computing device (coupled with a smartphone of course). They can just take the tablet near the monitor/keyboard and it all wirelessly "magically" syncs with each other and the display shows up on the monitor, perhaps a slightly different UI more suited to precision pointing devices (like a mouse).

But keyboards and big screens are not going anywhere. Too many people rely on them to get work done.

[Owen]

Tomi,
I get your underlying angst with MS/Nokia... and it is there we both know that.

I think the real issue is just apps - its that perception that the consumer is fed on a regular basis.

Is that changing? yes

when will that change affect WP?
Thats hard to say as it more about consumers coming to terms with smartphones perceived value and the actual value they personally achieve.

I think the thing that no-one can fairly estimate is, is that the market has been technologically driven (apps/HW) and this is coming to an end. Its the maturity of the market and consumers will start to look at phones as well phones again.

Also the free windows paradigm( sub 9.1") now coming its hard to say what that will do ( obviously better) but right now MS is the only one changing their model.
ie 14 new WP manufacturers
and a bunch of new budget windows devices.

I think Googles bi-polar disorder; the holistic services company with a disfunctional platform exclusivity will just fracture Android so far people just won't know what they are buying... a android device means exactly what? (ie aosp or Googles)

I think the way forward is less clear today than in the past 4-5 years.

[Tomi T Ahonen]

Hi Everybody

Excellent disucssion here and many questions and commments. I'll respond to you all now. But first just in general, this is a mid-length forecast and at the longer end of the range that I usually do forecasts (most of my forecasts are for less than 5 years, often less than a year). So with longer time horizons, there is also more chance for error in the forecast. With that, I will of course be here on the blog and monitor these numbers as they start to pan out, and point out if and when any one element on the forecast starts to veer off the path I had anticipated.

There are many good comments in the discussion - and Jonas Lind at Mobile Foresight has already posted a set of comments at his blog about my forecast, agreeing with some aspects and arguing others. His very well reasoned blog is at this link

http://www.mobileforesight.com/2014/07/ahonens-rest-of-decade-forecast-for-smartphones-tablets-etc/

I warmly welcome the discussions and will happily engage with as many as I can on the blog here now. As I am on summer vacation, I happen to have better time now haha, so at least the first people will all get responses now...

Tomi Ahonen :-)

[Tomi T Ahonen]

Hi cornelius and przemo

cornelius - haha, yeah the Winter War story is astonishing and is now even more striking with recent Russian empire revivalism. Chromebooks yeah are also Linux based but so is Android. So in some way Linus Torvalds wins the ultimate war without actually gaining anything from it, though. On Linux on the computing side, yes it is a small percentage now but in the big picture shift away from desktops, then 'pure' Linux will be in that 'other OS' group and very slight in numbers.

przemo - you make very good points both on corporate and gaming PCs. Here the recent numbers are critical. On the business use of personal computers we passed the point already late in the past decade that the majority of PCs are now sold to consumers, not businesses. So their proportion once was as you describe but that is no longer true today. The majority of PCs sold are now laptops and majority of PCs are sold to residential users not business users. But out of those business/corporate users, there is some use where a tablet is about as convenient as a laptop and in other cases - like say retail uses by store staff - the tablet is actually more convenient than a laptop or definitely a desktop. That doesn't mean that the desktops at the calling center etc will be gone. No, they won't. There is a pretty reliable basic business/corporate need for desktop basic computing that does not need to be moved from that office and even a laptop would be wasting costs. Also there are some uses of laptops where they are clearly better than tablets - me writing my next book, I won't do that on a touch-screen device haha... But the majority of PCs sold today went to consumers and most of that was to facebook etc type of uses. Then the far lower costs of the tablet come into play allowing the convenience of ultraportability but without the hassles of a keyboard... So I am assuming the vast majority of existing household PC users will migrate to tablets, plus a smaller portion of business/corporate users. And I am assuming most of the growth of computer sales goes to tablets rather than laptops or desktops. But the final percentage could be 67/33 or 80/20... we have to see how it goes, but I am quite confident tablets will clearly take the vast majority of new PC sales.

The gaming side is more interesting and one I do not know that well. I am sure you are correct that there are plenty of heavy gamers who need their horsepower and will get high-performance PCs for that. I did not model their proportion out of the total desktop PC market (where I am guessing the majority is, not in laptops while I know there are also laptops optimized for gaming) but I recall that the PC side of gaming has been relatively flat or only modest growth in user numbers for quite some time as the mobile side of gaming has continued to grow strong. I am guessing that out of total desktops and laptopts in use, not more than 10% would be to the heavy gamer segment with gaming-optimized computers. I have no data to prove this now, I am just remembering recent visits to computer stores and that their focus was not strongly in this segment. If its 10% or even twice that, the gamer numbers alone are too small to make a significant change to the forecast. So if we say 32 million personal computers (desktops and laptops) today are sold for gamers annually, my forecast allows for that to remain flat until 2020 and they still will not be the majority of desktops or laptops sold at that time. An ever increasing proportion of the shrinking overall slice, yes, but still not even half of all desktops, nor half of laptops sold by 2020.

Tomi Ahonen :-)

[Tomi T Ahonen]

AndThis and abdul

AndThis - China is the manufacturing base for the world and as the mobile industry is the fastest-moving industry (most volatile) it experienced the total shift from other countries to China, first. 80% of all handsets sold in the world including the iPhone and even African brands like MiFone and Solo - are manufactured in China.

abdul - good point about split between Desktops/Laptops vs Tablets. I am observing early trends and consumer behavior. The traditional PC market (desktops and laptops) had shifted from majority-sold-to-business, to consumer sales in the previous decade. So the significant majority of all PCs sold today go to homes, not offices. For home users, the tablet is a compelling change now, when they consider an upgrade to their slowly-growing-obsolete home PC. Very clear trends show that consumers today are switching from home desktops and home laptops to tablets. That is the primary driver of my forecast. The second part is business use. Some business use is shifting from leptops there to tablets. Sometimes driven by covenience like in retail sales situations or warehouse staff or factory supervisors etc. But in other cases its also driven by the accountants, if for 'minor' convenience significant cost savings are achieved downgrading from laptops to tablets, the accountants will drive this shift.

Tomi Ahonen :-)

[Tomi T Ahonen]

Hi Won, Ben and Aryan

Won - good point about Huawei. My regular readers will remember that last year I was calling Huawei the strongest of the bunch chasing Samsung and said it was slightly ahead of the rivals as the challenger who might become number 2. They were growing fastest and with most steady pace. But then their rival Lenovo just leapfrogged them in the race by buying more market share by acquiring the Motorola handset business. Some of the growth in this industry will come from consolidation and we may well see some players like HTC and Blackberry sold (as possibly Microsoft may sell parts or all of its Nokia unit as well). Those buyers will tend to be the most hungry/aggressive Chinese players but there is an outside chance that a Micromax or Karbonn or Lava from India might make that kind of move too and suddenly jump into the middle of the Top 10 squabble.

Ben - about screens and keyboards. Very valid point but please don't make the mistake of assuming regular consumers are like you, reading this blog. We are geeks here. Normal consumers are not like us. So yes, I will always prioritize a large clear high-definition screen on my laptop not least because I travel enormously and often watch my DVD collection (on several terabyte size hard drives) on my travels. Same with not just a keyboard, but I need a laptop keyboard with full-size keys, as I have learned to touch-type long ago in the time of the manual typewriter, and I type very fast and I cannot type efficiently with keyboards with smaller keys than those that are spaced out like a classic 101 key keyboard ie like a classic typewriter. As I visit various PC stores, I see that the light-weight ultraportable laptops with still full-size keyboards are a gradually diminishing breed haha...

Yes, there are lots of - millions and millions - of people like you and me who do want high performance screens and keyboards and real mice on their computers but that is not the mass market majority. Most people want to access facebook and see a video on YouTube and just maybe do a bit of their banking online. For that a tablet is perfectly fine and the tablet works particularly well in the home as its so convenient both at the sofa and the bedroom. That is the mass market

Aryan - excellent point about the tablet becoming the portable center of computing with separate keyboards and large screens in the homes/offices. Something that some geeks are already doing. I tried doing that with the Nokia E7 but after a couple of weeks fumbling with that setup, I was back to my separate laptop and using the E7 more like a PDA than the center of my computing haha... but the scenario is ever more compelling with tablets and ever more powerful smartphones (I tried it briefly again last year with a 7 inch tablet running Android BTW and very quickly tired of the fact that nothing was as fast or well connectable as on this Samsung 900X notebook still running the OS I hate the most, Windows haha). But yes, I totally agree that soon homes with offices will have the peripherals arrayed for office use, keyboard, screens, printer etc, and the actual computing 'CPU' will be the portable device be it a tablet, smartphone or laptop. Increasingly that will be tablet for heavy users but probably also growing slice will be pure smartphones with enough horsepower and storage etc..

Tomi Ahonen :-)

[Tomi T Ahonen]

Owen

Your comment is dangerously close to being Microsoft astroturfing but let me assume you are not a troll and lets deal with your points on the assumtion you are making a genuine argument here, not just trying to push Microsoft propaganda.

You say the real issue is apps. If that was the case, then in the past Apple would have easily towered over all Android makers and Nokia could not have outsold Apple's iPhone in 2010. So historically that wasn't the driving issue and all consumer surveys tell that apps come far down on the list of what consumers ask for when buying a new mobile phone (screen size and camera usually come at the top).

But you also say that apps are now changing and we shift from a tech-driven era to consumer-driven era. Yes. I agree that kind of shift is happening although it had been going on for years already. Nonetheless, if that is the case, then Windows Phone is spectacularly poorly poised now to 'capitalize' on any apps-driven interest as most app developers have quit on Windows Phone, the existing apps are mostly developed for older incompatible versions of Windows Phone and Microsoft has to now resort to bribing developers to do WP versions of popular apps. The consumer surveys say consistently that consumers find Windows Phone apps to be the worst versions of any popular apps too, that they are cheap 'me too' copies and not offering advanced abilities. If what you say is true, then Nokia Lumia and Microsoft Windows smartphones had some chance in this say 2 years ago but by now the opportunity is truly rotten.

Then you say the consumer tastest and preferences will create uncertainty into the market. That is true. BUT, the handset market is different from all other consumer electronics markets in that the carriers/operators are gatekeepers who decide which phone manufacturers and which of their models are approved for their market. This is what Elop said was his biggest lesson he learned as Nokia CEO, how much the carriers/operators control the market. (And we know, Elop essentially torpedoed Nokia's industry-leading best carrier relations). So creating even the most desirable phone ever will not matter if the carriers block that phone. We saw this with the original Google Nexus. We saw it again with the Microsoft Kin phones. We saw it for years now with the boycotts against both Windows based smartphones of all manufacturers as well as another boycott against all Nokia smartphones. Elop himself admitted these boycotts when talking to Nokia shareholders at the annual shareholder meeting. Yes, its possible consumer preferences change the game. It will cause changes to other players. It cannot help Microsoft and Windows Phone and Nokia Lumia as they have alredy been put on the black list by the carrier community (because Microsoft owns Skype, something that Elop also explained in great detail, this was when even Nokia's own Lumia phones did not have Skype on them). Your point has some merit, but it cannot help Microsoft. It may bring more volatility to the market with the other brands.

The 14 handset makers propaganda is mere propaganda. Did you know Owen, that there are over 2,000 handset brands globally. Yes over 2,000 brands. Microsoft Windows based smartphones have been sold by 9 out of the 12 largest smartphone makers of 2013 (at some point in their history) ie Samsung, Sony, LG, Huawei, ZTE, Nokia, Lenovo, HTC and Motorola. But 5 out of those 9 have already QUIT the Windows smartphone business as not commercially viable. So that silly propaganda of 14 newcomers to Windows who all have combined less than 1% market share is silly, where these 9 brands controlled 59% of the planet's smartphone sales last year. If there was any COMMERCIAL opportunity out of Windows Phone today, then Samsung, LG, Huawei, Sony, Lenovo etc would all RUSH to introduce Windows Phone based smartphones. That Microsoft has to discover 12 brand that nobody has ever heard of to 'promise' smarpthones - some of which will never materialize - that is pretty pathetic by Microsoft. But the ignorant tech press in America who don't understand mobile globally, have fallen for some Microsoft propaganda and are now peddling a myth. If you are a genuine person Owen, you consider this paragraph and its relevance and reconsider Microsoft's chances (ie that they are utterly doomed if most of its EXISTING or past partners have rejected it). if you are a troll, I know this won't matter as you won't even read my response..

The free windows paradigm is 5 years too late. Microsoft owned 12% of the smartphone market late in the past decade. THAT is when it should have done this free bit. Not now when they have 3%. As it is only a 'me too' strategy and other OS platforms are also free, it gives nothing in a competitive advantage but brings all the Microsoft and Windows baggage in a non-compelling offering. This all before we take into account that carriers/operators are telling their manufacturers clearly that they don't want Windows versions of smartphones in their stores. So Android (or Firefox etc) versions appear instead.

Lastly on Google confusion. Maybe. I think Google has very clear purpose of vision and single-minded focus on winning the race to the pocket which they won, and now expanding that to take the remaining digital OS space from PCs to wearables to TVs to cars. But you say the next years are more volatile than the past few years. In the past 5 years we saw Windows go from 70% of all computing devices sold to 20%. We saw Android go from 20% of all smartphones sold to 80%. We saw iOS go from 90% of tablets sold to 40%. There has never been as volatile period in the tech industry as the past 5 years and I am old enogh to remember the OS wars of Windows and Macitosh and DOS. You say the next years will be more volatile. I don't see any signs of that. Maybe you exaggerated, now thinking with hindsight, is there any tablet OS rival that has any chance to suddenly displace Android (Surface haha). Or any smartphone OS to replace Android (even Tizen is now pretty well dead). Or anyone who could possibly replace Microsoft Windows on the desktop in the next few years? No. I think the tech space is now exceptionally STABLE for the fore-seeable future and the disruption will come more from outside the tech industry (cars, TVs, wearables) etc than from within it.

That all assuming you Owen were sincere in that comment haha... Else this was a waste of a good cup of cappuchino here at Pacific Coffee in Hong Kong

Tomi Ahonen :-)

[abdul muis]

@tomi

I was wondering if you already calculating ANDROID ONE as a disrupting factor when you do the calculation.

ANDROID ONE is a google initiative of a low cost (bellow US$100) but well supported android device. Google co-operating with 3 India android maker (micromax, carbon, spice) as a start. With android one, google create an engineering sample board and supply it to any company who want to create an android one device. then any company can use the board, and create an android device without changing the board/design. Google will be the one that giving the OS update/support. Google believe this will solve the problem of cheap android device that were not really supported by it's brand maker, and will accelerate android adoption at a higher rate.

The problem with android one is, once the low end is getting better by a wide margin, it will drag the middle and upper solution. So, this will change the equilibrium of phone pricing as we know it today. I believe this will hurt apple business more than anybody realize when reading that announcement. So, I think apple will hardly be able to maintain their 8% out of 2 billion (160 million) unit/year.

BB and WP will also be devastated with this android one movement. Right now WP is well known for cheap but fluid device, when Android one is comming, WP will be hit. But I think the one will be hit more is BB. So, I was surprised when you put BB number as 1% out of 2 billion (20 million unit) / year. Because in developing country, BB is not corporate device, but it just a cheap device with cheap messaging platform.

[Giacomo Di Giacomo]

I disagree with your forecast about tablets. Tablets are useless toys that can do little more than surfing the Web and watching videos. The reason for less desktop and laptop PC sales is not that they are being abandoned, but that the installed base is already very large, since the run to higher performance has ended some years ago. My idea is that tablets will peak in some years and then decline, when the number of new users drops and the market turns into a replacement one.