Handset Market and Installed Base in 2014: The Total Handset Picture by Communities Dominate Blog

So its that time. Every year I publish the TomiAhonen Almanac in the Spring and do the big mobile industry statistics blog article. And every two years, in the Autumn, I publish the sister volume, the TomiAhonen Phone Book. That has just been finished, and it always looks at the ending year stats (while the Almanac looks at the starting year) so this is what the world of handsets looks like in 2014. All the stats you ever wanted.. if this blog is not enough for you, then you gotta dig into your wallet for that 9.99 Euros and start paying for more detail haha...

BIG BIG PICTURE

So the world sells 1.95 Billion mobile phone handsets (smartphones and dumbphones combined) this year, again a new record. Nothing else comes even close in consumer electronics or other such industries, not TVs, not computers, not music players not videogaming consoles, not wristwatches, etc. Who are the biggest? For the year, including dumbphones and smartphones the Top 5 brands are:

Top Phone Manufacturers of 2014 in units and market share (and 2013 number)
1 . . Samsung . . . . . . . . 370 million . . . 19% (20%)
2 . . Microsoft-Nokia  . . . 190 million . . . 10% (14%)
3 . . Apple . . . . . . . . . . . 175 million . . . . 9% ( 8%)
4 . . LG . . . . . . . . . . . . . 160 million . . . . 8% ( 9%)
5 . . Lenovo-Motorola . . 100 million . . . . 5% ( 4%)
Others . . . . . . . . . . . . . .950 million . . . 49%
TOTAL in 2014 . . . . . . 1,950 million 
Source: TomiAhonen Phone Book 2014 (preliminary estimate of full-year sales based on 3 quarters sales data and trends for Q4)
Above data may be freely shared

Total handset sales are up 3% from 2013. Note that the market share stats are of course preliminary for 2014, we will know the exact numbers in about February 2015 but I've used the actual data for the first three quarters of 2014, and with recent trends and Q4 of 2013, have estimated Q4 of 2015. These numbers are very close when we use the rounding-off levels up to nearest 5 million units. But yes, of course this blog will also have the final 2014 full-year stats when they can be calculated in two months from now. But the Phone Book always makes this preliminary projection for the full year numbers based on the first three quarters of info for the year and its always been close to the mark.

Now, if you need more details like regional splits of the handsets more brands than the top 5, market shares in other ways such as by revenues etc, then you have to get the Phone Book 2014. There also is data on the continental split of where phones are sold as well as the 8 regions I use to give more detail on various data poins. But I have a lot more free info to share with you here today. Lets move first to the smartphones. Last year we passed the point when more smartphones are sold than dumbphones. This year two thirds of all phones sold are smartphones. So lets look at that market a bit more in detail. 

SMARTPHONES 2014

Top Smartphone Brands of 2014 in units and market share (and 2013 number)
1 . . Samsung . . . . . . . . 330 million . . . 26% (32%)
2 . . Apple . . . . . . . . . . . 175 million . . . 14% (16%)
5 . . Lenovo-Motorola . . . 95 million . . . . 8% ( 3%)
4 . . Huawei. . . . . . . . . . . 75 million . . . . 6% ( 5%)
5 . . Xiaomi  . . . . . . . . . . 60 million . . . . 5% ( 1%)
Others . . . . . . . . . . . . . 525 million . . . 42%
TOTAL in 2014 . . . . . . 1,250 million 
Source: TomiAhonen Phone Book 2014 (preliminary estimate of full-year sales based on 3 quarters sales data and trends for Q4)
Above data may be freely shared

Yes the smartphone market grew by another massive 25% from year 2013, exactly as I promised on this blog and against all those clueless 'experts' who were suggesting a saturation in the smartphone market. Samsung is safely the largest smartphone maker shipping nearly twice as many smartphones as number 2, Apple. Apple's iPhone is also safe in its position nearly twice as big as number 3, which is the new Lenovo after its Motorola unit sales are added into the Lenovo total. The rest of the Top 5 are also Chinese brands, Huawei and Xiaomi.

Again if you want historical diagrams of how the various brands did, if you need to see more than the Top 5, if you want regional market shares across the continents and the regions that I always report the stats on, then you've gotta get the Phone Book 2014. So what about those OS wars?

OPERATING SYSTEMS

Android won this war.

INSTALLED BASE BY OS

Then what of the installed base? There are some lingering Symbians, some Blackberries and if you look real hard, you'll even find some Lumias on Windows that are in use. Not enough to sustain any real 'ecosystem' beyond the rich users of iOS and the mass of the mobile OS market that runs on Android. Here is the installed base of the smartphone OS platforms at the end of 2014 (ie the only really relevant chart for any developers)

Top Smartphone OS by Installed Base end of 2014 in millions and market share (and year 2013 number)
Android . . . . . . 1,600 million . . . . 75% (64%)
iOS . . . . . . . . . . 395 million . . . . 18% (19%)
Windows . . .  . . . . 46 million . . . . . 2% ( 3%)
Blackberry . . . . . . 45 million . . . . . 2% ( 5%)
Symbian . . . . . . . .25 million . . . . . 1% ( 7%)
Other . . . . . . . . . . 20 million . . . . . 1% ( 2%)
TOTAL . . . . . . 2,200 million 
Source: TomiAhonen Phone Book 2014 (preliminary estimate of full-year sales based on 3 quarters sales data and trends for Q4)
Above data may be freely shared
NOTE: the above chart reflects update bombshell Microsoft news that only 50M Lumia handsets have been activated out of 76M shipped, so Windows Phone market share real installed base had been over-estimated by about 1/3

Yes Android now just keeps padding its lead and as its demolished the other rivals from Windows to Symbian to Blackberry to bada, it now is taking share even from iOS as the Android installed base market share starts to approach its global new sales share. What helps iOS is of course that the iPhones are still so desirable, they have a far longer life in the second hand market (similar to Nokia and its Symbian and totally different from say Windows and Lumia which many people can't wait to get rid of - or to quit using them as phones and only use them for the cameras or media players as stand-alone unconnected units, obviously not at all of use to any developers in the 'ecosystem' haha). While yes, there is data on the regional splits of the various OS platforms, who cares. If you do Android you have most of the market. and in the rich industrialized world, you obviously need to do iOS as well. Nothing else really matters, nothing else is large enough to care.

PRICE PYRAMID 2014

So then lets look at the price pyramid of new phones sold in 2014. This is what that looks like:

Price Pyramid of New Phone Sales 2014
Premium Smartphones costing over 450 US dollars . . . . . . . . . 20%
Mid-price Smartphones costing between 150-449 US dollars . . 12%
Low-cost Smartphones costing between 40-149 US dollars . . . 33%
Ultra-cheap phones costing less than 39% US dollars . . . . . . . 36%
NOTE: these are real prices when handset subsidy is removed
Source: TomiAhonen Phone Book 2014 (preliminary estimate of full-year sales based on 3 quarters sales data and trends for Q4)
Above data may be freely shared

Clearly the growth in the handset market is at the bottom end of the smartphone market but there is also a peculiar pattern, the mid-price segment is now smaller than the premium segment. That is very rare in any competitive industry and it suggests there is room for far more expensive phones to be sold than the current lineups. I think Apple's cautious move up the price points with the iPhone 6 models reflects this truth but there is plenty more room towards the 999 dollar and above price levels for true premium phones with advanced features. Lets see if anyone will explore that type of phones (I am reminded of the Nokia Communciator series which often cost over 1,000 dollars. I wonder if Nokia might return to that segment now on Android next year with a true superphone?)

But yeah. Again given for free, the handset price pyramid globally, again on the CDB blog, where else? The global average price across all phones sold in 2014 is 191 US dollars. For Smartphones its 287 US dollars in 2014 and for dumbphones its 24 US dollars. If you need more info on that dimension, like Average prices by type across the regions or price trends over time, then read the Phone Book 2014.

HANDSET FEATURES

This is the more fun part now. How many phones have a touch screen or a good quality camera or how many are phablets etc. The features part is fun info in the Phone Book and I always share some of the findings in this review. Lets look at what kind of phones are in use globally:

Features In Use Globally On All Handsets (Dumbphones and Smartphones)
SMS support . . . . . . . . . . 100%
WAP or HTML browser . . . 97%
Color screen . . . . . . . . . . . 97%
MMS support  . . . . . . . . . . 87%
Camera. . . . . . . . . . . . . . . 85%
Bluetooth . . . . . . . . . . . . . .83%
Memory card slot . . . . . . . .80%
HTML browser  . . . . . . . . . 79%
Java/Brew support  . . . . . . 69%
Touch screen . . . . . . . . . . 40%
Smartphone . . . . . . . . . . . 37%
Source: TomiAhonen Phone Book 2014
Above data may be freely shared

Yes its an astonishing place and so many smartphone app developers are stunned to discover that Java actually reaches 3.9 Billion mobile phones worldwide - twice the number of all Android and all iPhone smartphones in use, combined. MMS now reaches 4.9 Billion pockets so if you are a brand or advertiser or media company that uses SMS, why not include color pictures, videos, links, QR codes, sounds into your messaging and reach 87% of all phones in use on the planet and almost 100% of the phones in use in the Industrialzed World. The consumer thinks its an SMS so they don't need to be taught to do anything, they know how to open an MMS and they know instinctively how to respond - because its the same way as an SMS. In fact most consumers don't know the difference so if you send them a branded MMS message like an airline ticket for example, the consumer just looks at it in amazement and thinks, I didn't know you could put color pictures into SMS text messages... Perfect evolution to your SMS strategy. And I need not remind readers that SMS is the most used data application on the planet with 4 times more active users than Facebook for example on mobile phones.

So thats the summary of the major features from the Phone Book 2014. If you need less used features like GPS or QWERTY keyboard or WiFi or dual SIM etc, that all is also in the Phone Book 2014. There also is a plethora of details about 3G and network standards and cameras and screen sizes etc. Also the Phone Book 2014 has info on regional migration from dumbphones to smartphones as well as the penetration rate of smartphones per active subscriptions in the region. Now lets move onto perhaps the most popular aspect of the volume, the Digital Divide.

DIGITAL DIVIDE

I am studying the differences in the mobile industry how the Emerging World has its differences and similarities to the Industrialized World when it comes to mobile phones and the mobile industry. For example this year 2014 among my several international conference speakerships in the USA, Europe and Asia, I also spoke at various mobile industy conferences in the different regions of the Emerging World, in Latin America in Ecuador, in Asia in Nepal, and six times in three different countries in Africa: Kenya, Nigeria and South Africa. More than half of my consulting work is now in the Emergiing World countries. And I try to share lessons I learn and obserations I get to make with that exposure that obviously differs often greatly from what I know and have seen in countries I have lived in like Finland, USA, UK and Hong Kong. So in the Phone Book 2014 (just like in the Almanac 2014) there is always a whole chapter dedicated to that analysis. A chapter that looks at how the market is in the Emerging World, for which we rarely get solid data. Here is a snippet of the market info about the installed base of handsets in the Emerging World from that chapter:

Comparison of Handset Market Industrialized World vs Emerging World in 2014
ITEM . . . . . . . . . . . . INDUSTRIALIZED WORLD . . . . EMERGING WORLD
Population  . . . . . . . . 1.2 Billion . . . . . . . . . . . . . . . . . . 5.9 Billion
Mobile Subscriptions . 2.1 Billion (175%) . . . . . . . . . . . 5.2 Billion ( 88%)
Unique Subscribers . . 1.1 Billion ( 92%)  . . . . . . . . . . . 3.6 Billion ( 63%)
Handsets in use . . . . 1.7 Billion (142%) . . . . . . . . . . . . 4.0 Billion ( 67%)
Cameraphones . . . . . 1.7 Billion (142%)  . . . . . . . . . . . 3.2 Billion ( 49%)
Smartphones . . . . . . 1.0 Billion ( 83%) . . . . . . . . . . . . 1.1 Billion ( 19%)
Source: TomiAhonen Phone Book 2014
Above data may be freely shared

So there you have it, the only free source online that gives you this kind of breakdown so you can understand how different the Emering World markets are from the more familiar 'Western' Industrialized World markets when it comes to the handsets and the overall mobile industry. Again far more data in the chapter on Digital Divide such as handset features, market data like average revenues, comparative data to other technolgoies etc all split into the two regions across the Digital Divide.

MUCH MORE DATA 

There is very much more in the Phone Book 2014 such as employee/business phoens vs consumer phones, data cards/dongles, a whole new chapter now on tablets which includes phablet data, and of course the chapter on the app store economy etc. There are tables summarizing the 60 major handset market countries worldwide including the national handset market sizes and their market value plus the locally leading handset brands both by dumbphones and by smartphone for each of the 60 countries. There is also a discussion of the three strongest handset companies (Samsung, Apple and Lenovo) including their global revenue splits across the eight regions that I use to report all regional data.

All data and tables in this blog may be freely shared and used in any context. I appreciate it if you do use any data in an online article that you include a link to this blog. In print, please indicate that the source is the TomiAhonen Phone Book 2014 from which all data in this article were excerpted.

For those who want the brand new pdf ebook TomiAhonen Phone Book 2014 which only costs 9.99 Euros, please follow this link (and don't worry as it currently still discusses the previous 2012 edition, I will of course ship you the 2014 edition not the old one. The price is the same and this new edition actually is slightly longer with a bit more charts and tablets than the 2012 edition)

Comments

[Tester]

You are mixing things up a bit. You have to look at this year's sales, not installed base. And there iOS has 14%.
Now the numbers look more sensible.

Overall, though, I think due to Apple's dominance in the highest price segments, concerning Tomi's analysis of other companies' prospects there, I'm a lot more skeptical.

These numbers really look like Apple will be the only one left selling in that segment a few years down the line - not because premium phones do not sell anymore but because the price point of premium Android will have fallen below the $450 line. So my guess is that the current premium segment will dry out, leaving only those who have to own an iPhone and willing to pay whatever Apple asks for it, regardless of justification for that price.

It'd also be interesting to know how many of the premium contracts are heavily subsidized. Those who need to pay full price for their phone tend to shop cheaper, at least that's what I get from talking with people. Today's $200 phones are already miles ahead of what was considered premium only 2-3 years ago.

[abdul muis]

Guys,

You digesting Tomi's number wrong.

First,
The 20% premium market segment is including the dumb phone too.
Without the dumb phone it would be 30% something.
Assuming all iphone in premium segment, iPhone 14% market share is not 50% of the premium market segment.

Second,
iPhone span in the category of premium and mid price.
The iphone 3G, 3GS that still on sell in india, malaysia, philipine, indonesia, vietnam.
and the iphone 4,4S, 5 that still on sell on many market is NOT in $500+ segment.

[KPOM]

Apple has something like 90% of the PC market above the $1000 price point (which, until the price drop on the base MacBook Air to $900 last year, was the entry point for a full-featured Mac). It would not surprise me at all if they come to dominate the premium phone market in the same way, unless Samsung hits it out of the park with the Galaxy S6 and/or Note 5. Lenovo has a maker of good phones in Motorola, but the latter was unable to turn critical acclaim into commercial success. Xiaomi has come out of nowhere, but they can't sell blatant ripoffs of iPhones and iPads in any Western market, and are having IP issues in India now, too, so will remain largely a China-only affair until and unless they start adhering to Western intellectual property laws.

Tomi talks about a $1000 smartphone. The 128GB iPhone 6 Plus is $949 ($500 with subsidies) and is the hardest one to find in stores here (though part of that may be supply given the issues Apple has had with the TLC NAND used in the 128GB model). And the US market is gradually weaning customers from subsidies, with AT&T Next and Verizon Edge following down the path that T-Mobile blazed 2 years ago by eliminating contracts, so not all the price is a result of subsidies.

[Tester]

@abdul muis:

Yes, you are right, of course. I didn't consider that when trying to correct Leebase. Now we are getting sensible numbers again.

But it's mostly Apple creating this lopsided result.

@Leebase:

I still believe that falling prices will eventually put Apple under pressure, too. You can't justify a $700 price tag if the competition offers the same specs for less than half of that.

@KPOM:
"Apple has something like 90% of the PC market above the $1000 price point (which, until the price drop on the base MacBook Air to $900 last year, was the entry point for a full-featured Mac)."

You, like seemingly everyone talking about this segment, constantly forget that most Windows PCs in that price segment are sold through smaller companies who custom build their systems. Yes, each one of them only has minimal market share, but together they's easily outclass Apple, they just do not appear on any chart because individually they seem insignificant. The mere fact that the big ones do not offer any product here is absolutely no sign that these systems do not exist. Where do you think that power gamers, for example, get their hardware? Certainly not Lenovo, Dell or comparable names. They go to a shop that custom builds to their customers' own specs.

And here's the big difference between phones and PCs. You cannot custom build a mobile phone. So all that market share belonging to the small shops has to be distributed among the big ones in the mobile sector. And this will not go to Apple.

[baron99]

Thanks for the stats!

[KPOM]

@Tester, if Apple has 90% of the premium market for PCs, that by definition means that everyone else combined has 10%. Apple isn't being "outclassed" at the high end. They essentially are the high end. I don't mean servers, which are a separate category that Apple no longer really competes in.

The question at hand is whether anyone in the Android market will be able to market on a large scale at the price points where Apple is for the newest iPhones. Samsung was really the only company who had been able to do so, but they have been faltering as of late. If Samsung has been ceding sales to the high end products of Lenovo, HTC, or LG, then it does suggest that someone, or maybe several players, can thrive by taking some of the premium market position. But if those sales have been going mostly to Apple then it's less likely. I think we'll need to look at raw unit sales of high end Android devices to know for sure. The bulk of the growth is at the low end, which will drag average selling prices down, but if raw unit sales of Android devices north of $450 continues to grow then we might see more differentiation.

[Tomi T Ahonen]

Hi All

Thanks for the great comments and questions. abdul muis did a great job answering the issue about the price pyramid stat. For LeeBase a quick addition. Its not that there are dumbphones costing 450 dollars (anymore). Its that the Price Pyramid covers all phones not just smartphones (or as abdul said 'including the dumbphone too'). So if it was just among smartphones, the above 450 dollar segment 'of just smartphones' would be about 30%. And as there are almost no dumbphones in that price range anymore that is actually rather accurate (the further down we go on the Price Pyramid the less that would hold). If we then use the current sales of smartphones market share stat - 14% for the iPhone, then the maximum Apple has of this market segment is 47%. I reality it is less than that because the iPhone 5C sells for less than 450 dollars.

Or to sanity-check this number, lets use 'all phones'. Then the premium price segment is yes 20%. We also have Apple's share of all phones (top chart) it is 9%. Again this is the ceiling of Apple's possible slice of the premium segment. It would be 45% (in reality it is less again because of iPhone 5C). Numbers are the same, that difference between 47% and 45% is only because of rounding off differences.

Apple has a huge slice of the premium phone segment but its not 90% it is less than 47%. And Apple's share is shrinking in the premium phone segment but it is growing in the middle price segment, exactly because of the iPhone 5C (or as I called it, the iPhone Nano entry-level or cheap model or mass market or emerging world iPhone strategy).

The weird thing is, that this type of Price Pyramid should be pyramid shape, so the top should maybe have say 12%, the second tier about say 18%, the third about say 25% and the bottom about 45%. But now the top is bigger than the second slice which suggests there is a severe market distortion ie the manufacturers aren't aware that a significant slice of the consumers would be willing to buy a far more expensive super-premium product. There is room at the top and I don't mean the Vertu or Lamborghini type of uber-luxury phone, I mean a $1000 - $1,500 dollar superphone. Incidentially if one manufacturer manages to do that trick, they could very well experience their 'Razr moment' that they could ride to iPhone or Galaxy type of market share, revenue and profit leaps. So I hope LG, Sony, HTC, Huawei, Lenovo, ZTE etc are listening haha...

Tomi Ahonen :-)

[Tester]

@KPOM:

"@Tester, if Apple has 90% of the premium market for PCs, that by definition means that everyone else combined has 10%. Apple isn't being "outclassed" at the high end. They essentially are the high end. I don't mean servers, which are a separate category that Apple no longer really competes in. "

Apparently you didn't read what I wrote:

Apple may make up 90% of what can be measured in this segment. But a large quantity of highly expensive computers is sold through shops that never even enter such statistics because they are too small. They are possibly lumped together among 'others' with no price category assigned, or escape these charts completely. I know many, many people who own a >$1000 custom-built system but I only know a handful of Apple users owning such expensive machines, most of which are professionals who often own a separate Windows PC, too. The only reason Apple features so strongly in this segment is because unlike Windows PCs nobody can custom-build a Mac, they are forced to buy from Apple's limited offer, so every Mac that's sold at such a high price point has to go to Apple. But very, very few sales in this price range for Windows PCs go to companies that register here. So you got a highly distorted statistic.

[Tester]

Re: Price pyramid

To be honest, I am not really surprised by this distortion favoring the premium end. Just one word: Subsidies.
It's hard to get 'normal' behavior here if there's so much price fixing and hiding the real costs going on.

A lot of people buy premium phones on a subsidized contract because all things combined make this an offer that's only marginally less attractive than using a cheaper phone.

It'd be interesting to split this off into different regions because with so different markets being mixed there won't be a clear picture.

What I don't believe is that there's room above the highest price point aside from true luxury products. Aside from the subsidy issue I think a bigger problem is that there's insufficient compelling offers in the mid range that set themselves apart from the cheaper phones and at the same time offer specs that may make a customer in the lower range of the premium segment decide to buy something cheaper.

[Wayne Borean]

Ah, but when looking at the 'High End' of the PC market, you are missing a major of point.

A $900.00 Apple Mac is equivalent to a $700.00 Microsoft Windows computer.

Seriously. Consider the cost of an antivirus subscription. Consider replacement battery costs (I'm still getting two hours of battery life from my four year old MacBook Pro). The if you are in certain specialized fields, like music or photography, consider GarageBand and iPhoto, neither of which has an equivalent bundled with Windows, and both of which would cost a minimum of $50.00 to replace.

Last but not least, consider maintenance costs for a Windows PC. My four year old Mac has had no maintenance (except backups).

The costs of running a Windows PC are far higher than the costs of running a Mac, which effectively means that a Windows PC is far more expensive than its stickered price.

Wayne

[John F.]

Today Samsung announced its closing its flagship store in London.
A few months ago it announced it won't sell notebooks in Europe as no one buys them.

For Q3 this is What Gartner’s report had to say about the three most closely watched companies:

Samsung: Sales of Samsung’s feature phones and smartphones declined in the third quarter of 2014, and Samsung lost market share in both markets. Samsung’s deepest decline came from feature phones, which decreased by 10.8 percent year-over-year. Demand for Samsung’s smartphones weakened mostly in Western Europe and Asia. Samsung’s smartphone sales declined 28.6 percent in China, the biggest market for Samsung.

and .....

Apple: Sales of iPhones grew 26 percent in the third quarter of 2014. With the introduction of two large-screen phones for the first time, the iPhone 6 and iPhone 6 Plus, Apple managed to neutralize the advantage of Android competitors. Gartner expects Apple to experience its biggest ever fourth-quarter sales, with both of its large-screen phones seeing demand exceed supply since their launch.

Wow, I think there is a huge crisis somewhere in the horizon for Sami never does wrong, market share strategy once again proves that Cash is king

[John F.]

Tomi,

Thanks for the price pyramid, a deeper study on the top 20% will appreciated considering the fact that reports mention that around 40% of samsung S5 is not selling, that is a massive miss. Difficult to digest and hard to understand when u consider that Apple increased their price and had a record breaking quarter

All your predictions about pricing are only killing Samsung not Apple.

Weird facts emerging as we close the year

[Tester]

@Wayne Borean:

We are posting a lot of FUD and nonsense, right?

1) Running a Mac without antivirus is as stupid as running a Windows machine without it. Despite all the denials of Mac users most security experts agree that this attitude is an open invitation for malware makers. A 10% share of computer owners who think they don't need protection are an open invitation for exploitation.

2) Replacement battery costs: Utter nonsense. If you buy cheap you get cheap. But don't pretend that Apple makes the best batteries. I don't buy that. My 6 year old laptop's battery is just fine, despite that thing having been in constant use for most of the time.

3) The software issue. Yes, for certain fields Mac offers better software - but these are isolated occurences, most fields are far better supported with Windows, so this is hardly an argument here.

4) Maintenance: That depends on so many factors that your point falls flat. A computer needs as much maintenance as its user makes necessary. I know people who are so careless that their machine will break down after a few months but I also know people (myself included) who can run a computer for many years without ever encountering a problem that'd require maintenance.

So all things considered: No, it's not Apple which is inherently better, what you get here is just the effects of higher build quality due to higher price. If you shop cheap on Windows you get shit, if you are willing to spend money and have a custom built system you mostly get something even better than Apple has to offer.

@John F.:

I think it's pointless to compare Samsung's third quarter with Apple's. Samsung had no new flagship device and is still suffering from the underwhelming Galaxy S5 while Apple's third quarter was massively boosted by the final missing feature of their older hardware. This is clearly a one time effect.
I'll hold my breath doomsaying Samsung until their next major release. If that also tanks, yes, then Samsung will be in trouble.

[AndThisWillBeToo]

@Tester
I personally think Samsung will report more bad news. Reason is that they are showing all the symptoms of year 2010 Nokia: declining profits for four consecutive quarters, declining market share, promise to cut portfolio to "improve cost structure" changes in management, unexpectedly bad performing device launch...

Time will tell but no good signs on Samsung front. It is unclear who the members of the church of market share will root for next. Lenovo, Xiaomi, Huawei are most likely contestants. I think the next darling is the one who enters western markets and India most aggressively.

[Tester]

@AndThisWillBeToo:

True about the symptoms. But there's one difference: Samsung is still on a competetive platform which makes recovery possible. Nokia didn't have that luxury - or to be more precise - they threw away all the chances still left to them in a rush of panic.

If there had been one criticism about Samsung's product line, it always was that the multitude of different devices was too confusing to the customer who just couldn't tell the differences between them anymore. So if they clean house a bit, their outside appearance may improve a bit.

Of course you don't do an Elop and reduce a versatile palette to almost nothing, but there's certainly a lot of redundancy in Samsung's catalogue.

Another thing that's often overlooked is that Samsung's drop in market share mainly comes from China where the government-sponsored local manufacturers have an unfair advantage. Their performance elsewhere wasn't nearly as catastrophic - so this may easily be a one-time event - just like the current boost Apple experiences with their first large screen phones.

[AndThisWillBeToo]

@LeeBase
I express my concern on Samsung ability to differentiate. They grew where they are by coming up with latest hardware (large screens, multi-core processors, etc.) before others or right after first ones. This was backed up by annual marketing push that exceeded the market cap of Nokia corporation - advertisement alone exceeded entire marketing budget of Coca-Cola company.

Today people are asking why they should pay for a Samsung phone when OnePlus One costs half of it with equal hardware and better access to Google ecosystem.
Samsung doesn't have differentiating services - they even ramped down their music service as it had too few users.

Samsung is faster than Nokia to react but they lack safety cushion.

[Tester]

@AndThisWillBeToo:

"Samsung is faster than Nokia to react but they lack safety cushion."

I don't think so. Samsung is one of the largest corporations in the world with such a diverse palette of products and services - not just electronics! - that they probably have one of the largest safety cushions in the world. If their mobile section runs into trouble they have enough reserves elsewhere to sit it out for some time. Of course, if they find out that mobile is no longer a business to compete in, they'd probably just quit without giving a shrug. But unlike Nokia they don't even come close to going bankrupt.

[AndThisWillBeToo]

@Tester
As I said, I'm worried about differentiation. Perhaps safety cushion is the wrong word. They lack customer lock-in. When competitors match their hardware and prices to that of Samsung, what will Samsung have to keep the customers on board? Samsung has UI that gets mostly negative reviews, services that they have traditionally not been good at (they already gave up with Samsung proprietary IM service too) and HW design that so far has not been the one that gets copied - Apple has that.
My colleague switched from SGS3 to OnePlus One. After sign in with Google account his apps and their settings were already a full copy if his previous device. Only reason why he didn't toss away the Samsung was that he might later find some photo, SMS or alike was left there and he needs it.
I saw huge customer lock-in to Google and none to Samsung.

LeeBase is right, as are you: Samsung is the profitable one and they have money to play the game. They can fund this play via their other business. But at current I don't see them playing other cards than price and marketing.

[abdul muis]

@AndThisWillBeToo

Samsung customer lock in in Galaxy Note is bigger than Apple iPhone lock in.

[John F.]

there is no company better positioned, better capable, or more competitive than Samsung ? ONLY if there is Cash to keep it going.

Well, this is where profits matter and market share kill dreams.

Reported news

2013 - Why are Samsung’s smartphones so dominant in the market when companies such as HTC, Nokia and LG have all released smartphones in the last year that are just as good if not better? A big reason is Samsung’s enormous marketing budget. Samsung’s marketing has spent an estimated $14 billion in 2013, more than quadruple what Microsoft and Apple together spent on marketing last year.

2014 - (Reuters) - Samsung Electronics Co Ltd, the world's biggest smartphone maker, said on Friday it planned to lower its mobile marketing spend this year relative to revenue, after big promotional spending hit fourth-quarter profit.

"When your brand doesn't have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy," said Moon Ji-hun, head of brand consultant Interbrand's Korean operation.

"Samsung's marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack," said Oh Jung-suk, associate professor at the business school of Seoul National University. "They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It's got to be more aligned."

Closing Stores, 40% dead inventory/S5 , 26% market share lost in China, 10% decline YoY in feature phones, many quarters of profit decline, and there is more.

Are people here delusional ? If those numbers would come fro Apple there would be HUGE headlines here calling for the end of the company and the disastrous high end market/price strategy and the hate would heat up to the max.

The problem for Samsung is not Apple, is every other cheap handset maker. The great dilema they are facing is that they can't compete with apple, by now it should be clear and the others are killing them

Samsumg = Compaq = IMB PC = HTC = every company that can’t afford losses and have no money to keep up with marketing expenses and inventory financing.

No one is locked to a toshiba PC or HTC phone. People were locked to the ecosystem ! It was microsoft, not Acer. It is Android not the handset.