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

[Catriona]

Also @Winter, the West Coast of the U.S. is an attractive magnet for immigrants, which is a competitive advantage. Our primary and secondary schools are sub-par, but our universities are the best in the world. That's a huge draw for talent. Now if we only had more sensible immigration policies that treated engineers and programmers from China and India differently from unskilled labor crossing over the border from Mexico, but alas, our political disfunction has reached a level where it has become counterproductive.

That said, the bottom line is that Apple, Google, Amazon, Microsoft, and others on the West Coast are keeping the U.S. competitive in an increasingly globalized era where intellectual property rules.

[Winter]

@Catriona
"That said, the bottom line is that Apple, Google, Amazon, Microsoft, and others on the West Coast are keeping the U.S. competitive in an increasingly globalized era where intellectual property rules."

It is more complex. The US rule, indeed, but by military and financial might. That allows the US to force others to abide by US IP laws that are very, very strongly biased towards US companies.

The US coasts are currently the places where big money, best research, and stable politics, come together to welcome immigrants. (Immigration politics are much worse in Europe).

[Per "wertigon" Ekström]

Regarding IP, there is a movement outside of the US trying to fight back, known as the pirate movement. They've actually managed to put a few dents and chinks in the armor though are more a nuisance today than a real threat.

The problem with the strong IP laws of today is that they are more or less incompatible with a free internet. Especially current copyright laws, which do the absolutely braindead decision of trying to regulate *copies* in a place where the margin costs of making copies are more or less zero.

[Winter]

@Per
Strong copyright law is also incompatble with free speech and a free market.

[NokiaFun]

The mighty US West Coast. I think the audience of this website are missing the point or the Baron95 fella isn't making it sufficiently.

How would it sound to hear "nobody can manufacture like the Shenzhen ecosystem...there is nothing the US or European companies can do other than pay the Shenzhen companies to do the manufacturing for them". Would anyone seriously debate this? The US, the Germans, even the British and the French have lots of current manufacturing but they can't compete in today's electronics manufacturing. Not even if someone spent billions on creating a plant with all the latest technology. Because what is going on in Shenzhen is the complete ecosystem. Big plants, small plants, and millions of cheap-labor Chinese. Apple couldn't bring the iPhone manufacturing back to the US even if they were willing to take less profits or charge more for their phones.

Similarly, there is an entire tech ecosystem centered around Silicon valley that even other areas in the US can't match. From the VC investors, to the existing tech companies, to the universities, to the tech entrepreneurs. This is not some "American blood line superiority" any more than Shenzhen is what is is because "the Chinese are so smart".

And yes, America runs on immigrants. They attract the best minds in the world because of that Silicon Valley tech opportunity that just doesn't exist to that level anywhere else.

Of course tech innovation exists in many places in the world. Many places in the US too. Just nothing to compare to the US West Coast in a similar way to China's tech manufacturing.

But keep in mind...just because a company is on the West Coast of America does not mean you should fire your CEO and hire an West Coast executive with zero experience in your industry. And if you do, you don't let him go around telling your customers that all your products suck. And you don't drop everything you got to bet on his former companies unproven product. Nokia was so stupid

[Winter]

@NokiaFun
"How would it sound to hear "nobody can manufacture like the Shenzhen ecosystem...there is nothing the US or European companies can do other than pay the Shenzhen companies to do the manufacturing for them". Would anyone seriously debate this?"

Except that the Mighty Shenzen ecosystem buys its machinery in Europe and the US. The chips powering all these electronics, not least the ARM processors running the mobile handsets, are made by waver steppers most likely build by ASML. ASML is located in Eindhoven, the Netherlands. That is only one step in the production process. At every step, machinery is used that us designed and build in the Western world.

This is a global industry. I think some people are still living in the past and do not understand what globalization actually means.

[NokiaFun]

@Winter - as I said, there are manufacturer's outside of Shenzhen....but that doesn't mean that just anybody can order some European machine tools and instantly recreate what it would take to truly compete.

[Winter]

@NokiaFun
"but that doesn't mean that just anybody can order some European machine tools and instantly recreate what it would take to truly compete."

And here is explained why:
http://www.nature.com/nature/journal/v521/n7553/full/521420a.html

[Sony Xperia Price]

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[abdul muis]

http://www.androidheadlines.com/2015/06/report-xiaomi-sold-over-35-million-handsets-in-h1-2015.html

If this is true, then, Xiaomi has shipped 20 million in Q2 2015.
That's mean number 3?

[abdul muis]

mobile-dad _dot_ com /a/286/13791 _dot_ html

Huawei ship 50 million phone for H1 2015?
That's mean 37.5 million phone for Q2 2015?
Number 3?

[abdul muis]

@Tomi

I wonder why I can't post the above message link without doing the _dot_
are mobile-dad dot com were blocked?

(At first I try that web site with the google translate, translating the web into english)

[emrecan]

Thank you guys