Bloodbath News: LG reports final 2014 number, also outside Top 10 we have Lumia number, and some thoughts about Samsung Q4 (without their number). (Updated)

Yeah the final quarterly numbers are now rolling in. First up, we have the first of the big 3 analyst houses reporting its final smartphone sales numbers (for Q4 and for full year 2014). My regular readers know that I always calculate my number as the average of the totals from those 3 (used to be 4) houses, and from that I then plug in the known individual manufacturer numbers and estimate the remainder to fit best available info. So yes. Strategy Analytics was first out of the box, they counted full year 2014 to have hit 1,283.5 million ie 1.28 Billion smartphones sold worldwide. For Q4 their number is 380.1M (and yes, those who are playing along at home, your spreadsheet is correct. Strategy Analytics have found some more smartphones this year they didn't report before, about 3 million more.. yeah, me too. Wish they'd tell us which quarter they found them haha). Ok lets hope we get Canalys and IDC to report their numbers soon as well.

UPDATE PART 1: shortly after I posted this, IDC also released their final count. Total market 1.3B for 2014, Q4 sales 375.2M smartphones (Sammy number added to below)

LG FINAL 2014

We have the official number from LG for the full year. They shipped 59.1 million smartphones. LG hasn't given us their quarterly numbers regularly so its been guesstimates based on the - ahem - guesstimates by the analyst houses and other reported news so based on what I had for Q3, LG's Q4 would be down to 15.5M (down 8% from 16.8M in Q3). We should be cautious, the Q3 number was not solid, BUT, this would be consistent with Samsung reporting declining unit sales from Q3 to Q4 and we know Apple iPhone gains were not from the ultra-cheap rivals, it will be from the premium name brands - like Sammy and LG. But yes, I currently am modeling 15.5M for LG for Q4 but will go still revisit their Q3 and Q2 to see if I have to adjust those perhaps. We know the full year total, so if I reduce one of the earlier quarters, that would mean larger number for Q4. But yes, in Q4 in this preliminary share, LG has a market share down to 4.1% (from 5.2% in Q3).

Note that LG is reporting profits in its handset business, so this is a healthy rival, has been profitable now three quarters in a row. And of its migration from dumbphones to smartphones, LG is about on par with Samsung, as 75% of its annual handset shipments were now smartphones. Note for the global industry the migration is only about 67% so this is better than industry transition (or say, Microsoft-Nokia who still linger in last place with only 20% of their handset production shifted to smartphones in Q4, far less for the full year haha). So LG is holding steady at 4.7% annual market share and for 9 months have been profitable. I think its now time for LG to ramp up the competition and start to grow, show us what you can do.

If you are curious about where will LG end up on the annual Top 10 list, we know the top 4 positions are already taken, and at least one Top 10 rival does have bigger sales than LG out of the bottom 6. So LG can best hope for 6th ranking but also they won't be 10th or 9th (fight between ZTE and Sony). Depending on final Coolpad and TCL numbers, LG will finish between 6th, 7th and 8th rank, very likely 6th.

MICROSOFT LUMIA (NOKIA)

So then outside the Top 10 we had Lumia number at 10.5M (I had expected 12M if you remember my posting when the shock news came that only 1 in 3 Lumia handsets that had been shipped, had ever been activated). There I clearly said my Q4 number for 2014 was half-quarter number (6M) so I had expected Nokia-Microsoft to have its normal big Christmas quarter but the performance was truly lame. The Microsoft 'Nokia' brand of dumbphones is being ramped down rapidly, they declined total handset sales from 52.2 million units in Q3 to 50.2 million in Q4 (decline 4% when usually this is hot Nokia sales quarter). That included a decline of 3.2 million units of dumbphones for a gain of only 1.2 million more smartphones. Still this pattern continues with Lumia and Windows, that Nokia/Microsoft cannot achieve even a 1-to-1 conversion from dumbphones to smartphones, Microsoft is bleeding nearly 2 customers out, for every 1 customer migrated to Windows. Back before Stephen Elop wrecked Nokia's handset business juggernaut, that migration was consistently better than 1-to-1 and yes, irony of ironies that was with the 'obsolete' Symbian OS. (and every single quarter that was done profitably). Can you see how dead Windows Phone OS is? It is performing dramatically worse than SYMBIAN did haha. After all those 'glorious' updates to the OS from Windows Mobile to Windows Phone 6, to Windows Phone 7 to Windows Phone 8. And its still poison today.

Yes, the Lumia unit still generates a loss over at Microsoft and the 'news' that Lumia set a record is only bogus Microbrain propaganda, as the Nokia smartphone unit has not RECOVERED yet even to the sad sales levels it had as recently as Q1 of 2012 (when Nokia sold 11.9 million smartphones) and the sad Lumia recovery is far far from Nokia's peak of 28.3 million in Q4 of 2010 when Nokia was more than twice the size of the iPhone, had 29% market share and was four times the size of Samsung, and reported Nokia record profits in its smartphone unit. Incidentially since Lumia was launched, it has not produced one quarter of a profit. And yes, one in three Lumia units that has shipped from the factory to the retail channel, has never been activated. So yeah. That is a dead OS right there, Windows. No wonder all handset makers and developers are bailing out from the OS. Even Sony's Vaio unit which was supposed to launch Windows smartphones alongslide the Vaio laptops that run on Windows, no, they are now launching on Android instead. This when Vaio is an independent company now, not part of Sony. They examined Windows - even as its 'synergies' with the Vaio laptops - and they will launch Android instead. But Lumia yes it finished outside the Top 10 for year 2014 with a market share of about 2.7% (down AGAIN, from the pitiful 3.1% it held a year ago). Microsoft taking over from the mess Elop created at Nokia did not revive the Lumia unit. It is dead.

ABOUT SAMSUNG DECLINE

So I can't analyze Samsung numbers yet because Sammy didn't give their number for Q4 or for the full year 2014. We did hear, however, that their unit sales were DOWN in the Christmas period. That is VERY bad news. They were at about 78.5 million in Q3 so we can expect Samsung to be in the range of say 70M - 77M now, and that puts it squarely in the sights of the iPhone - for total smartphone sales lead in a quarter. Yes this is Apple's spike-quarter after their new model launch but still. Even if it is only one quarter, this is quite a shock. And we don't know the exact number (we may hear it at some point but probably not. We will use the average of the Samsung numbers as reported by the big analyst houses). But Samsung did say their quarter-on-quarter unit sales for 'smartphones and tablets' was down. The tablet business is not big enough to account for it, this is mostly down on the smartphone side. What is curious, however, is that Samsung also said their Note 3 phabet sales were strong and helped boost Samsung average sales price up. So while Apple launched the iPhone 6 series phablets, those apparently didn't bite (heavily) into Sammy's phablet sales. Maybe it was more Apple's exiting customer base who rushed to get the large-screen iPhones. And if so, Sammy's damage was done probably more on the bottom end of the scale. There we do see a heavily surging Huawei who has had a banner quarter (and perfectly timed for its home market, China). Xiaomi did not eat Samsung's Christmas dinner, as Xiaomi sales are down from Q3.

I wish we had more numbers, haha, but it does seem, that as Note 3 sales are still strong, the iPhone 6 Plus did not eat into Samsung phablet business. But as Samsung didn't say its Galaxy S5 flagship was strong (and it is after all, an 11 month old flagship) that is probably at the top end where Samsung now took a big hit from the iPhone 6. Meanwhile, at the bottom end, it is definitely not Xiaomi who is beating Sammy (only in China, but even there Xiaomi sales are down from Q3) no, that is led by Huawei with a strong surge currently. Meanwhile we heard from Huawei that they could grow even more at the bottom end but want to move upscale where bigger profits are available. And a shift in Samsung flagship Galaxy S4 to phablet Note 3 sales would not shift the Average Sales Price upwards, it would keep ASP flat. What is needed is for low-end phones to suffer and shift that balance more to upscale phones. So Samsung's big damage came at the bottom end, primarily to Huawei. But also ZTE and Lumia are up in the low-cost smartphone sector. Meanwhile other premium brand smartphones seem to also take a hit from Apple's Christmas spike - LG is down from Q3 and Sony previously already complained that they will downgrade their guidance for full year smartphone shipments. And for its impact of scale similar to Lumia haha, Blackberry was also down at the premium price end.

Thats kind of how I read it, where the big threats are and who is gaining and who is in trouble. And back to that iPhone spike - once again, this was a weak jump in the best quarter that Apple can have any year. It didn't even reach the levels Apple has had in past Christmas quarters for iPhone spike sales. Now Apple will see again the declining quarterly market share until in September we see the next iPhone. And as we've already heard from Huawei and Xiaomi they are rushing out their 'iPhone killers'. Samsung is definitely sharpening their knives for the fight this summer with the next flagship Galaxy. LG is now pretty healthy and preparing their next round. The battle will be joined and Apple's Christmas free ride is now over. But Sammy Sammy Sammy. They are now very much vulnerable.

There is one more bit of news. Samsung is giving guidance that smartphone sales in Q1 will be down due to seasonal factors ie after-Christmas sales decline. We can read between the tealeaves that Apple also expects such a decline into Q1 (January-March) quarter and with that, its now a real race between these two giants for also the next quarter. That is stunning. Only a year ago Samsung was twice the size of Apple. And Apple did not grow faster than the industry. Its Samsung who has stumbled, quite badly, in 2014. Can they correct this badly listing ship over at Gangnam. We know the next iPhone sales spike will come for the Christmas quarter of 2015. Samsung needs two strong growth quarters in the summer if it intends to achieve a 'buffer' to remain top dog this year, to counter the spike coming from Cupertino at the end of the year. It will perhaps be an interesting year, after all, in Bloodbath Year 5 haha.. Stay tuned.

And if you were curious how did Strategy Analytics award the Q4 race between Apple and Samsung? They didn't. They gave it as a tie. 74.5 million each haha.

UPDATE PART 2 IDC gave the race to Samsung on a margin of 600,000 smartphones in Q4, and 75.1M units for the Samster

More Q4 and end of year analysis as we get numbers 

Comments

[John F.]

@Tomi

This might interest you, sorry to post it here .

The iCamera possibility fades ..... smart phones cameras are way too good already even for filmmakers

Sundance Premieres Sophisticated ‘Tangerine,’ Shot on iPhone 5s

One of the big surprises of day two at the Sundance Film Festival was Sean Baker’s “Tangerine.” The “Starlet” director stunned a packed crowd at the premiere on Friday night when he revealed that he shot his low-budget movie entirely on the iPhone 5s.

IT was filmed entirely using three iPhone 5s phones and the $8 app FiLMiC Pro .....

[Tomi T Ahonen]

KPOM

No. You don't get to play that game. You know perfectly well that the EXACT issue is already discussed in the APPLE posting comments. Go there if you still dare to try that as your 'response' but beware if you WILL need to ADDRESS my response on that point. Don't pull this shit of repeating the silliness again here in another blog.

Tomi Ahonen :-)

[Tomi T Ahonen]

John F

First, if you did want to debate the Apple performance please bring that discussion to the Apple thread

Secondly, I really don't understand what you meant by the first part of your complaint. What do you want me to do now? Didn't I do the best that is possible with the little data that we have?

Third on IDC. I thought you've been here for years, maybe I am confusing you with another John. But where SHOULD we get the industry total number? I have used consistently the 4 big analyst houses who all reported (most quarters) the total number, up until Gartner suddenly stopped giving out that number so now its 3: IDC, Strategy Analytics and Canalys. Do you know of any other source that is better than these who give a report on the total smartphone quarterly sales figure and has a good track record for solid numbers and math? I don't. We've held this same standard here for years, I only take the total number from the analyst houses - as the average of what they report - and then try my best to source all individual brands as close to the brand owner as possible, their quarterly results if they offer that detail of course is the best possible source. Samsung rarely commit to a public number so for Sammy we do have to take the next best thing which is the average of these 3 (formerly 4) houses on what they report. Where else would I get that Samsung number? I can apply some degree of logic and sanity checks but now that everybody is on Android that is becoming pretty useless (previously we could separate those who were on Symbian from those who were on Windows from those who were on Android and thus have some sanity checks from that side. Now about the only big thing I can do is look at the performance in the large markets especially China to seek some other sources if the manufacturer themselves doesn't release a number.

So you don't like IDC. We need an industry total. Where do you suggest John I go find one every quarter that is also in the public domain?

Tomi Ahonen :-)

[Wayne Borean]

Baron95 and Tomi,

I think you are both misunderstanding Apple's moves to a certain extent. There are things that Apple has not publicly said about their plans, that their numbers indicate they are doing.

Explaining it would be too difficult in a comment. I'll post the evaluation on my blog complete with links to sources (and a lot of them will be to Tomi's numbers).

Wayne

[Gonzo]

Tomi, you said;

So I can't analyze Samsung numbers yet because Sammy didn't give their number for Q4 or for the full year 2014. We did hear, however, that their unit sales were DOWN in the Christmas period. That is VERY bad news.

I know, I know… and I won't talk numbers but this is where financial information helps. As mentioned several times since the news went out end of last year, Samsung did say that the S5 was 40% bellow expectations and Xiaomi and Lenovo are eating the bottom of the cake, so I think the squeeze is in both ends. The bad news is not just that, as a hardware maker, in the coming quarters they will have to sacrifice more and more profit for market share, and that leads... you know where.

Like Compaq, IBM PC, Vaio … they had their boogie man … Android is one of samsung biggest problems. They do not own their destiny, they just own one of the many phones that can get there.

[John Alatalo]

I have seen some number that the Microsoft/Lumia line sell increase some. So I dont think it are so to speak "dead" yet. I suppose we must wait some months more to see the sale of the new (without the Nokia name) Microsoft Lumia 432, 532 and 535.
Yeah maybe not a lot of profit with them but I guess the goal is to increase the marketshare.
And as far I have understand most of the old Lumia devices will be updated to Winodws 10, so it will not be the Windows Phone 7 and Phone 8 issue this time.

So I guess Satya Nadella will give them atlest 2 year more. If it fails maybe they go Android, some similar stuff like the Nokia X line.

[baron99]

Windows phone is done. Stick a fork in that crappy turkey! From the recent press it is obvious NO ONE WANTS A WINDOWS PHONE! :-) ..or should we wait and wait and wait and wait and wait ....and wait ("atleast 2 year more") to see if microsoft is "all in" LoL

DEVELOPERS THINK ITS DEAD!
http://www.forbes.com/sites/davealtavilla/2015/01/30/chase-and-bank-of-america-showing-little-foresight-pull-support-for-windows-phone-apps/

USERS THINK ITS DEAD!
http://venturebeat.com/2015/01/07/is-microsofts-windows-phone-at-long-last-dead/

Microsoft THINKS ITS DEAD TOO! LoL ....witness more desperation by microsoft:
http://blogs.wsj.com/digits/2015/01/29/microsoft-to-invest-in-rogue-android-startup-cyanogen/

Only pathetic astroturfers see life in the WP corpse!

[AndThisWillBeToo]

I see the trolls got back from vacation. Pity, there was nice conversation going on.

[Tomi T Ahonen]

Gonzo

Hey, seriously, if you can somehow decypher Samsung smartphone or handset business performance from the financials and any other detail honestly, feel free. I won't delete the analysis even if it discusses the profits if you explain what smartphone unit/market share data we can draw out of it, including product portfolio mix. Even just major bold trends, that is also fine. We ARE trying to understand what is going on, from a handsets, smartphones, units, model types, price points, and yes market share point of view.

What I will not have on the blog is a daily debate about what do we think about the sudden 2% spike in Apple's stock price and then who was right predicting that last week and should I buy Google now or sell Microsoft. That is forbidden. That may be valuable, that may find fans, that may even provide insights but for our readers that is mostly noise that clutters the issues about the market, the ecosystems, the reach of the platforms and the brands.

So yes, consider yourself blessed to freely do analysis of Samsung's financials, any details you can extract from that, which could give us insights into the handset/smartphone business. Just keep it to the handset side of Samsung and obviously steer away from wall street evaluation tools etc haha. I am very curious to see what you can dig up.

Tomi Ahonen :-)

[Tomi T Ahonen]

Baron95

Haha yeah, the Apple discussion is now split between here and there. Let me take that point to the Apple thread, ok?

Tomi Ahonen :-)

[Stormy]

Hi Tomi,

Long time reader, first time commenter.

I take it you are already aware of Microsoft rumoured to be buying into Cyanogen?

http://www.wsj.com/articles/BL-DGB-40241

How much do you reckon it is a sign they're abandoning ship and actively looking to get out of and replace Windows phone? Considering they own a lot of the Android patents, it makes a lot of sense to get behind this.

Also, do you think there is a chance Nokia might get behind Cyanogen? With or without Microsoft?

Keep up the good work.

[AndThisWillBeToo]

@stormy
It's not as much news as you would think if you had followed changes under Nadella's rule.

http://news.softpedia.com/news/When-Microsoft-Says-It-Loves-Linux-Does-Linux-Has-to-Say-It-Back-462830.shtml

[Tomi T Ahonen]

Stormy and AndThis

Yeah I noticed but I felt it was still 'noise' level minor investment by Microsoft, not really worth me bothering to post about that as a story in itself. But it may signal something.

I don't think we can count out of Cyanogen (only partial investment in it and I think it was that MS was only joining in a group of investors) any direct signal that MS is preparing to abandon Windows Phone. I think it is a 'safe bet' type of investment where Microsoft can bet into a technology which is the future (Android, not Cyanogen, obviously).

But that point by AndThis was very good and something I had forgotten that yes, there is an interest in the Microsoft CEO towards Linux which seems far more genuine than that in the past say under Ballmer.

Nokia haha? Who knows. I think the tablet on Android was a strong signal Nokia wants to return as a phone maker. If they do their phones in the future as a premium slice of Android flagships manufactured by Foxconn or someone like that, then its just a play on the brands's power. If they use that idling phone factory they still own in India for example to manufacture 'real' Nokias, then it would be a huge signal they want to fight in the big contest. They have tons of intellectual property and customer insights etc but not the headcount to design and market a broad line of smartphones in all markets. I am very sure - say 80%-90% confident that Nokia will launch a smartphone the moment their exclusion period is done (I think that was January 2016) and then it will be interesting to see what their real intentions are. Remember also that Nokia loves the tech comeback story (turning around Siemens Networking and Motorola networking businesses that Nokia bought when they were unprofitable)

Tomi Ahonen :-)

[Tomi T Ahonen]

PS Stormy,

You're not Stormy are you (from way back way way WAY back?)

Tomi Ahonen :-)

[Stormy]

Hi Tomi,

I don't think so - I've run my mouth on plenty of fora but its my first appearance here and I believe my first time interacting with you :D

[Tomi T Ahonen]

Hi Stormy

Yeah, you'd have known what I meant. For one season as a university student in the USA, while serving on the debate team, my partner was named Stormy. That was probably before you were born haha.. But as its quite a rare name, and you said 'long time reader' - I did have to ask haha.

Cheers, looking forward to hearing more comments and questions from you in the future

Tomi Ahonen :-)

[Catriona]

@Stormy, that's a very interesting post. Now that a touch-optimized version of Office has launched for Android (and STILL hasn't launched for Windows), perhaps we will see Microsoft explore other options. I know they still want to play up the idea that we'll be using converged devices running Windows 10, but with Windows Phone getting no traction, they need to do something. Microsoft isn't the type of company to give up on something before spending a lot of money trying to get it right.

[Catriona]

@Gonzo, are you a financial analyst? If so, I'd be interested in your best guess about Samsung's handset mix last quarter, too. Hopefully between all of Tomi's data and that of other analysts like Ben Bajarin we can figure out what's going on there and what that means for Android. If they are on a trajectory to being just another Android OEM then I think Google's efforts to reassert control over Android will work and we may even see a closed-source mobile OS from them in the future. Bajarin has a tweet that the next version of TouchWiz has scaled back the bloatware to "near Nexus levels." They need to support things like S-Pen on the Note, and of course the curved second screen on the rumored Galaxy S6 Edge, but it only makes sense to keep doing that if those models sell well. Otherwise, why not just do what Motorola did and essentially install stock Android?

[AndThisWillBeToo]

You can now lose your worries. Samsung has turned the tide! In January there were 5 different galaxies on top 10 most sold phones list in Finland which clearly shows the Apple calendar Q4 2014 was an anomaly and does not last.

http://www.puhelinvertailu.com/uutiset/2015/02/02/myydyimmat-alyuhelimet-suomessa-tammikuu-2015

Oh and /s.

[deadonthefloor]

@adi purbakala

Skype, Exchange->PBX integration, locking down the OS. These are the reasons Windows phone is failing.
You must remember that most telcos were at one time large mainframe shops who scoffed at MS success up until their products and services started to cannibalize telco revenues.

Then with the fallout between IBM (OS/2) and MS (Windows) most begrudgingly adopted Windows based solutions for the enterprise.

It's this legacy of burning telco over and over that have MS in the tough spot behind Google (+OEM stable) and Apple.

The lack of customization is what keeps OEMs from licensing, while Telco feel no obligation to help it succeed due in no small part to MS in direct competition in various platforms and services.

While this may not be entirely related to Tomi's analysis of the data, I believe there is some merit in this rant.