Smartphone Bloodbath Q1 of 2015 same ole, same ole

So yeah, the thrill is pretty well gone from this 'race' and at least some sanity is starting to emerge in the nutty reporting about smartphones also in the mainstream tech and business press. iPhone is not bigger than Samsung (duh!). Xiaomi is not the third-largest smartphone maker (duh!). But we do have some developments. Sony drops out of the Top 10 and is not replaced by Microsoft/Lumia which did outsell them but remain outside of the Top 10 as Chinese newcomer Vivo joins the big list (welcome). So lets do the charts..

BIGGEST SMARTPHONE MANUFACTURERS BY UNIT SALES IN Q1 2015

Rank . . . Manufacturer . Units . . . Market Share . Was Q4 2014 . . OS systems supported (coming)
1 (1) . . . Samsung . . . .  82.8 M . . 24.3% . . . . . . . ( 20.1% ) . . . . . . Android, Tizen, Windows
2 (2) . . . Apple  . . . . . . . 61.6 M . . 17.9% . . . . . . . ( 20.1% ) . . . . . . iOS
3 (3T) . . Lenovo * . . . . . 18.7 M . . . 5.5% . . . . . . . (   6.6% ) . . . . . . Android (Tizen)
4 (3T) . Huawei  . . . . . 17.5 M . . . 5.1% . . . . . . . (   6.6% ) . . . . . . Android (Tizen)
5 (7) . . LG  . . . . . . . .  . 15.4 M . . . 4.5% . . . . . . . (   4.2% ) . . . . . . Android
6 (5) . . . Xiaomi . . . . . . .15.0 M . . . 4.4% . . . . . . .  (   4.6% ) . . . . . . Android
7 (9) . . . ZTE  . . . . . . . . . 12.5 M . . . 3.5% . . . . . . . (   3.6% ) . . . . . . Android, Firefox
8 (8) . . . Coolpad/Yulong  11.5 M . . . 3.4% . . . . . . . (   4.0% ) . . . . . . Android
9 (6) . . . TCL/Alcatel . . . .  9.7 M . . . 2.8% . . . . . . . (  4.5% ) . . . . . . . Android
10 ( - ) . Vivo . . . . . . . . . . 9.3 M . . . 2.7% . . . . . . . (   3.1% ) . . . . . . Android
Others . . . . . . . . . . . .. .   97.1 M
TOTAL . . . . . . . . . . ..   340.8 M
 * Lenovo includes Motorola
Source: TomiAhonen Consulting Analysis 25 May 2015, based on manufacturer and industry data
This table may be freely shared

So yeah.. the only two big analyst houses we have left reporting on the industry (IDC and Strategy Analytics) that we have trusted (more or less) to count the total size of the industry both say the market contracted into Q1 from Q4, and by quite a lot in fact. The average that we use here, is down 9% from 3 months prior, and year-on-year the growth is now at a rate of 21% only.

Let me protest profusely here, I think it isn't 'that bad' and we may well get to see these numbers slightly revised upwards in coming quarters or the overall year final counts by these two houses, but what can I do? I gotta play by the rules we created haha... so yes. 340 million is the current latest-quarter count. I still am very confident the year ends up well above 1.5 Billion new smartphones sold probably closer to 1.6B.

Whats happenin' in the chart? Sammy back clearly in the lead. The Apple pattern of a surge for Christmas is now subsiding as expected, and the iPhone market share will fall the next two quarters, and like I've said many times before, the new models this year will determine how Apple does, its possible that we soon see the unit-sales peak of iPhones. It should come in a couple of years. Obviously we've already seen the market share peak of iPhones and my projection is that the actual market share for full-year 2015 for the iPhone will be down again this year.

But Sammy, Sammy, Sammy. That brief respite will not help them in the mid term. There are now stories coming in that the initial glow of the new case materials has not translated into a strong growth and the Galaxy S6 is even underperforming the S5 by some reports. (I told you so, it was a huge mistake to abandon clear competitive advantages such as waterproofing, removable battery and microSD card slot). Now the proof will be in the pudding the next two quarters or so. If Samsung struggles but LG and Sony pick up surprisingly strong sales (and Sony returns to Top 10) my thesis seems very strong. If LG and Sony both continue to also struggle while Samsung fails to capture growth, then its something else. And if Samsung does post strong Q2 and Q3 numbers, then I have no clue what I write about haha...

Lenovo riding its Motorola brand now for good China sales too. Huawei in solid fourth ranking. LG pips Xiaomi for 5th. Then we have the rest of the Chinese brands for the remaining positions, with newcomer Vivo joining ZTE, Coolpad and TCL/Alcatel. Do I have to do the OS platforms?

OS PLATFORMS Q1 2015
Android rules . . . . .  77%
iOS runs second . . . 18%
Windows struggles . . 3%
All others have . . . . . 2%
Source: TomiAhonen Consulting Analysis 25 May 2015, based on manufacturer and industry data
This table may be freely shared

This is sooooooooooooooo boring....  Windows continues to be dead. When will Nadella fire that moron Elop? Firefox now is being shifted in a desperation move away from cheap smartphones - yeah. After Tata motors or Yugo or Proton or  Lada try to sell the cheapest car, what chance to suddenly shift that to a premium brand like BMW or Audi or Lexus. Good luck with that, bitch. Tizen continues to be a promise and Blackberry continues to do worse than anyone could have imagined (now big layoffs).

But lets do the Installed base. That at least has some meaning still

INSTALLED BASE OF SMARTPHONES BY OPERATING SYSTEM AS OF 31 MAY 2015

Rank . OS Platform . . . . Units . . . Market share  Was Q4  . Main Manufacturers of current base
1 . . . . Android . . . . . . . 1,664 M . . . 75 % . . . . . . (  76%) . . . . . . Samsung, Huawei, Sony, ZTE, LG, Lenovo/Motorola, Xiaomi, Coolpad, TCL-Alcatel 
2 . . . . iOS  . . . . . . . . . . . 436 M . . . 20 % . . . . . . ( 19 %) . . . . . . Apple
3 . . . . Windows Phone . . . 47 M . . . . 2 % . . . . . . (   2 %) . . . . . . Microsoft(Nokia), Samsung, HTC
4 . . . . Blackberry . . . . . .  28 M . . . . 1 % . . . . . . (   2 %) . . . . . . Blackberry
Others . . . . . . . . . . . . . .  36 M . . . . 2 %
TOTAL Installed Base . 2,201 M smartphones in use at end of Q1, 2015
Source: TomiAhonen Consulting Analysis 25 May 2015, based on manufacturer and industry data
This table may be freely shared

So why is iOS having so much bigger installed base than its recent market share as the market has kept growing? Its because iPhones get the best life, handed down to others or resold and used for much longer..

Ok thats your Smartphone Bloodbath update for Q1. BTW there is some utterly clueless book out about Blackberry's fall. The Wall Street Journal exerpt tells you all you need to know, the writers thought Blackberry was the biggest smartphone maker (Nokia was more than twice as big, its like thinking Ford is the biggest car maker of the USA haha) and the authors thought Blackberry was losing sales in 2008-2010 when actually Blackberry grew and remained bigger than the iPhone. Idiots with a silly book. It does have some perhaps revealing insights to the politics of executives (at least the Wall Street Journal article exceprt) but when you start off with the basics utterly wrong, the whole book is a pointless read. Obviously I will not endorse the WSJ article either with a link, it totally does not deserve that.

Ok I'll keep monitoring these Bloodbath races but I can't promise how many more quarters this is worth doing. Android won the war and Samsung continues to be the biggest, with China rising. Now 7 of the 10 largest smartphone makers come from China, two from South Korea and one US brand that manufactures its phones in .. China. 

Comments

[ognald]

Just a funny note, windows phone is about to be renamed back to windows mobile.

[Badabum]

os market share q1 does not add up to 100% (75+18+3+2=98%).

[John A]

Interesting to read. Samsung Galaxy S6 and S6 Edege seems like a big failure in many markets.
(very bad battery life according to many reviews)

I suppose building a iPhone 6 copy was not so good after all.
But their Tizen models sells fine. I wonder if we will see some flagship models with Tizen to?

[vissar]

Please continue to do these. Android won't remain dominant forever. A better mobile OS will emerge eventually.

[adi purbakala]

If all analyst gone
Where would be tomi got number?

[adi purbakala]

All chinese + apple market share going down?

[Tester]

Re. Tizen:

Sorry, no, NO!
This is just a dream. Tizen will face the exact same problem as Windows Phone does: It's a fringe platform with weak interest. Trying to sell this as premium in a market where developers are fully committed to Android and iOS will face strong resistance. It'd massively increase the developer workload and ultimately do more harm than good.

And being based on Linux doesn't make this in any way compatible to Android. There's very little Linux exposed through the Android API. Most is Java anyway.

Samsung knows perfectly well why they only sell Tizen in a market segment where apps do not matter.

[Maggan]

@Tester

I think this is Phantom Tomi posting again.

/M

[Winter]

@Maggan,

This is rather bizar, posting as the blog owner. It should be easy to put up a filter blocking posts by "Tomi T Ahonen" not authorized by the blog owner, or so I assume?

[abdul muis]

@Tomi,

"There are now stories coming in that the initial glow of the new case materials has not translated into a strong growth and the Galaxy S6 is even underperforming the S5 by some reports. (I told you so, it was a huge mistake to abandon clear competitive advantages such as waterproofing, removable battery and microSD card slot)."

Perhaps the real reason that S6 does not selling well is that
1. the mid-price phone is good enough (now), and some of those premium user think they don't need top-of-the-line anymore.
2. last year & last last year phone still good enough, and people use the phone much longer than before.

"So why is iOS having so much bigger installed base than its recent market share as the market has kept growing? Its because iPhones get the best life, handed down to others or resold and used for much longer.."

I hope I can see the data about this, because AFAIK the iphone 4 is barely usable right now.

"The Apple pattern of a surge for Christmas is now subsiding as expected, and the iPhone market share will fall the next two quarters, and like I've said many times before, the new models this year will determine how Apple does, its possible that we soon see the unit-sales peak of iPhones. It should come in a couple of years."

I agree with the peak iphone, and I also see that apple sales peak has becoming shorter and shorter with each release. From 9 month to 7 month to 6 month, and now only peaking at 3 month after the release before going back to 'normal'. and with each shorter period, the spike goes higher and higher.

[realjjj]

Apple's market share will be up this year, the bigger iphones caused a huge upgrade cycle. The currency fluctuations are actually helping them gain share since currency impacts lower priced devices more.
A few other puts and takes will impact total smartphone sales. Xiaomi, ZTE and some others chasing higher margins will harm their sales this year. Noto G second gen is behind the curve, Snapdragon 810 will harm the high end segment sales. TCL, Meizu and Asus are more aggressive but not enough to offset all the other headwinds.
At the same time Apple did 61.6 in Q, in Q2 they'll do 50 or slightly above (they are upping channel inventory so they can easily put 3 mil more inventory in the channel in Q2. In Q3 they got to ship more than in Q2 no matter what so they'll do what is needed (cuts, new iphone, more inventory. And in Q4 even if the new models are minor upgrades and sell poorly, they have to beat Q4 2014 by at least a bit. That's plenty to gain share over last year if the market is 1.5-1.6B units. If they launch the right lower end product (very very unlikely) ,the could ship an extra 30-40 mil units this year.
As for iphone sales peaking ,depends a lot on carrier subs, new screen tech implementations and when they properly address lower price points.
Flexible, foldable, 0 bezels on all 4 sides can help or harm them if they are too slow to adapt. Carrier subs are a huge boost for them ,when regulators or carriers wake up, remains to be seen. Lower price points can be reached easily now even by Apple at their high margins. The CPU perf is getting to the good enough point but Apple would need to use an external SoC or make it's own modem.
Install base is another matter, if the high end goes to 300$ and bellow and Apple stays at more than 2x that with the lesser product, they will need to much better address lower price points. Ofc they need to get rid of Tim Cook first.

[Tester]

@Egghead:

"The PC market contracted and the Mac continued to grow because Apple had such a small part of the overall market and they continued to release premium computers as the rest of the market raced to the bottom."

Some issues with this:

I am one of the supposedly few Premium Windows-PC buyers.

The price difference between a Mac and a comparable Windows PC isn't that large. What tends to get overlooked in the statistics that a significant quantity of high-end Windows PCs is not sold by any company to show on sales charts. What about smaller local shops that custom build their hardware? I'm certain that these take most of the premium PC sales but are spread so thin that their individual market share only registers as noise. But add a few 1000 of them and things will look different.

Pre-built PCs from the electronics store? I wouldn't touch them if someone else would pay half of it. Now, with Apple, this can't be done, you have to buy what Apple has on offer.

[Lullz]

@Tomi

"Tizen is the best OS available in the market and Samsung board is full of idiots when they don't release more phones running Tizen."

What exactly makes Tizen the best OS available in the market? I'm not sure what makes it superior over anything else.

[Tester]

@Egghead:

"....when you get to the point you want to pay the price for a quality, premium computer, you go get a Mac. EVEN THOUGH there have been quality made PC's all along that you just didn't want to pay the money for."

I doubt that.
PCs are not smartphones. Considering that most casual users have migrated away, what's left are people who need their computers to do serious tasks. That often involves being acquainted with certain software. Changing operating systems in such a situation is virtually always a no-go.

So why has Mac marketshare increased in a genrally shrinking market?
Well, the simple answer is, that the segment of the market that is slowly disintegrating is almost exclusively Windows - that's the casual users. Most Macs, on the other hand, are used as work machines, which continue to require replacement at the same rate as before. Plus:

" But I doubt that the iPhone can follow the Mac's ability to grow in an overall declining market for the many years the Mac has."

I don't either. Remember: One of the major growth factors for Macs was iOS development. If you want to make software for iPhones you need a Mac. Obviously many developers who never owned one before were now forced to buy one.

[Tester]

@Egghead:

"PC's are similar to Smartphones in that there are basically two markets. A windows user when they go buy a new PC "generally" will only look at the windows PC's. Mac users will go buy their next Mac. There is churn, but it goes into Apple's favor. Once people go with Mac, they have a much higher affinity. Add to the still small overall market share and Macs have continued to outgrow the PC market."

I think you grossly misjudge how the PC market works.
For home users this may be true, but for working and gaming systems it's the required software and toolchains that dictate which OS is needed, not user preference of operating system. And this isn't anything that can make people migrate from one system to the other easily. And nobody would spend money on a Mac just to run Windows software on it.

Those users who can afford to switch are mainly those who will abandon full-fledged PCs first.

[Catriona]

Tizen? Not going anywhere. It might make it to the next "round" Samsung Gear, but as a phone OS, why would anyone code for it when Android has the market share it does? Samsung doesn't seem capable of building a viable ecosystem like Apple. What is its niche? Apparently going premium hasn't helped Samsung. But are we seeing high-end sales go to Samsung's rivals, or just going downmarket (i.e. Samsung isn't losing high-end customers to its competitors, it's just that Android is losing high-end sales altogether)?

The Note 5 might well be the "fixed" Galaxy S6 that has all the tick-the-box features that apparently Fandroids crave (whether or not they actually use them). If its sales are stagnant, then we'll know what that means for Android as a whole.

[Catriona]

I'm not sure why Tomi thinks the iPhone 6 sales are "subsiding"? Apple's revenue targets for Q3 suggest 45 million iPhones, which is more than a 20% increase from the 37 million sold in the June quarter in 2014. That sounds like a phone that is increasing in sales while Android is at best stagnant, and shrinking at the top.

[R]

I recently saw a funny discussion that has poor implications about the near future of Tizen:
http://what.thedailywtf.com/t/enlightened/8795

Tldr; The discussion was started by a developer at Samsung working on Tizen, and he’s basically blasting the Tizen SDK for being difficult to use (impossible for a large code base, really), poorly documented, and unprofessionally developed. Add a complaint about Samsung’s top-down, racist management. And then the lead developers of Enlightenment chime in and… do not improve the level of discourse. (Enlightenment Foundation Libraries is the UI toolkit for Tizen. It does a lot of the job that Qt does in Jolla, Blackberry 10, and formerly MeeGo/Maemo 5; and GTK did in Maemo 4 and earlier. A complaint about Enlightenment is, thus, a complaint about Tizen.)

Of course, that discussion being hosted on The Daily WTF, we should mention the real WTF: The forum program itself. It’s a relatively new forum system called Discourse, written by Jeff Atwood. It’s very slow and has an obtrusive UI, and its paging system interacts badly with the web browser’s paging. Discourse is the real WTF.

[chithanh]

@Catriona
IMO, baron99's trolling is way more bearable than Leebase's pro-Apple tirades.

The Galaxy Note was never a massive sales hit compared to the Galaxy S. Also it is bigger and heavier than most people are willing to carry at this point. (This might change in the future as the original Note had a 5.3" screen, something which is not at all large nowadays)

Android is losing high-end sales, true. But not to Apple - it is losing them to midrange Android phones. Others have already pointed out why this is a bad thing for Apple, too. On the other hand, a decline of Samsung won't matter at all for Android.

[Cali]

Tomi, I have to say I lost a bit of respect for you when you proclaimed that Samsung should go all in with Tizen. How does someone that claims to have so much insight into the cell phone space not realize that this would be suicide for Samsung? People are heavily invested in their ecosystems and to try and force a new OS and ecosystem on someone expecting Android would not only be ridiculous, but also cause one of the biggest market share declines in smartphone sales in history.