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« Matti Makkonen, inventor of the SMS text message, died on Friday | Main | Last Lifeline from Microsoft to Soon-to-End Lumia Handset Unit - 7,800 more jobs lost and $7.6B written off the books »

June 30, 2015


Per "wertigon" Ekström

"It was never proved they would stick with that. In the past people have been busy changing the OS and phone not manufacturer."

Sure, people changed OS and computer manufacturers all the time before Windows was a thing, too. They usually do when there's healthy competition.

At this point however, it seems like no third ecosystem will ever materialize. Windows? Missed the boat. As did Blackberry, Meego/Sailfish, Ubuntu and Firefox. The only OS:es left in town are iOS (which is tied to a single manufacturer focusing on the high-end of the market) and Android (the other 85%). Tizen might still have a snowballs chance if they are quick and manage to move units this year, but I'm not holding my breath.

Since there is no competition, Android will standardize as *the* ecosystem just like Windows did.

Per "wertigon" Ekström

Ironicly, the worst thing long-term Microsoft could've done was kill off Meego, since Meego could've slowed Android growth giving room for more diversity, including Windows and iOS.

As it is though, Android is going to be the standard for the foreseeable future, quite possibly all the way until the smartphone paradigm is over and done with. Nice job Microsoft!



"Ironicly, the worst thing long-term Microsoft could've done was kill off Meego, since Meego could've slowed Android growth giving room for more diversity, including Windows and iOS."

It's hard to see how MeeGo could have succeeded since, as RottenApple pointed out, the developers were already too busy with iOS and Android. Getting enough apps quickly enough would have been really hard.


Since the article by Tomi is about market shares, let me contribute with some figures for 2014 from Switzerland, where very detailed data about actually sold computing devices have been collected by the firm Weiss for a number of years now.

1) Mobile phones. The market is stagnating, at about 4M devices sold, 77.5% being smartphones (growth: +10.6%, but sales +5.4% -- ASP is declining). Market share Apple: 44.8% (previous year 42.2%) -- Switzerland is an iPhone country. All Android devices: 47.4% (previous year: 49.2%), with Samsung increasing its market share to 36.5%. Amongst the remaining systems, WP represents 5.8%.

2) PC. PC are not dying, far from it, with a growth of 3.6% (slightly lower in desktops, slightly higher in laptops). Sales are constant in desktop, but prices are decreasing 5.3% in laptops. HP is the leader (31.3% share, growing), Apple has 14.3% (decreasing). Apple is substantially more popular among consumers than in the professional market.

3) Tablets. If something is in dire straights, then tablets. Decrease of 8% in numbers, and 28.4% in sales! Tablets represent 13.8% of computers, laptops 63.5%, and the rest are desktops. Apple share crashed from 50.4% to 41.3%. Windows represents 7.7%.

There are plenty of comments about the demise of Microsoft, but this evolution in the market seems to indicate that at least the PC leg it needs to further its business model is perhaps in a better shape than generally assumed, and at least than the newer tablet segment. Whether Microsoft can take advantage of this is another question.


Taking only one (smaller) market does not paint the whole picture.
Especially Switzerland has seen their currency drastically rise in value, which makes imports cheaper and can skew the numbers here.

Looking at worldwide sales, we are already past peak PC. This all while mobile is still growing strong.

Per "wertigon" Ekström

@Wayne: Apple did also get a slice of the Samsung pie, yes.

Most of it went to Android manufacturers though. Just wait, right now happens to be an extremely good year for Apple. iPhones are projected for 53M and would be consistent with earlier years, and yes Apple could actually see some growth this year.

But, as I said earlier - they reached that growth by selling the meat of the sheep, not the wool.

@Lullz: In 2011, there was a window still open, especially since there was a migration path from Symbian. Elop killed all the chances entirerly though. Despite having a phone that rivalled the iPhone.



"Taking only one (smaller) market does not paint the whole picture."

Switzerland is a most interesting market, because it is the wealthiest country in Europe (perhaps after Luxembourg) and contrarily to most other EU countries, weathered the crisis remarkably well.

In other words: it is the prime example of that "Apple's target market which are the people with the money to pay for Apple's wares".

The indications are interesting:

a) The effect of the iPhone 6* line, with its supposed pent-up demand? Not insignificant, but small.

b) The market for Macs, supposedly trouncing standard PCs? Just 1/7th of the market.

c) The market for tablets, supposedly replacing PC overall? A not insignificant share, but again a small one, already decreasing.

And all this is a wealthy country, with excellent telecom and network infrastructure, with affluent people, who love and buy lots of Apple products.

In essence, take Switzerland as a proxy for the maximum that Apple can achieve. Scaling this for differences of wealth, disposable income and infrastructure in other regions may give a much better idea than those figures thrown around based on wild guesstimates.

"Especially Switzerland has seen their currency drastically rise in value,"

Irrelevant in this case, as the figures are for 2014, when exchange rates were stable. The big change, which affected mostly the CHF/EUR exchange rate whereas the CHF/USD was much less impacted, took place in 2015.

"Looking at worldwide sales, we are already past peak PC."

What the Asymco graph also shows is that we are already past peak iPad... It would be interesting to see the data for the whole tablet market, but so far the indications is that the life-cycle of that form factor might be much shorter than for laptops. Which might have interesting consequences on the respective long-term outcomes for Microsoft vs. Apple.


@Wayne Brady
"People who buy Ford Festiva's do not continue to buy them when they finally make it big. As soon as they can they will buy a BMW or at least a nice Toyota."

But all the brands you name are standard cars that are interchangeable. In terms of smartphones, these would all be Android brands.

The whole point is that iPhone and Android are not compleyely interchangeable.



"In 2011, there was a window still open, especially since there was a migration path from Symbian. Elop killed all the chances entirerly though. Despite having a phone that rivalled the iPhone."

Except that as RottenApple pointed out, the Qt apps had not really started shipping in volumes and the developers were too busy to start working on them in 2010. Start working on volumes. Without that MeeGo taking off would have been really hard. Not impossible but hard.


The fact that development happened at all is testament to the prospects which the app industry gave to MeeGo/Qt.

The Window of opportunity was closing fast, but it was still open, or else the decisions to considerable investment in MeeGo/Qt would have been made elsewhere.


Apple makes iOS and iPhones. Software and hardware.
Samsung makes Galaxy phones. Hardware.
Google makes
Android does not make phones.

ARM that we now know is cooperation of three companies.
Apple, Acorn and VLSI.

Per "wertigon" Ekström


Again, in 2011, Symbian was still the largest smartphone OS.

Meego had a shot, Elop killed it and by doing so ensured Androids hegemony. It could have established a three- or even four ecosystem market. Instead Microsoft sent in Elop to destroy that.

But yeah, no use crying over spilled milk.

Tomi T Ahonen

lets do a few replies, I was at Jul 2 comments.

Wayne - good views of the Mac vs Windows war, but your view only applies to the later stage of that war, say after Windows 3.0. In the early stages - I saw it from the very beginning - all the good apps were on Macs, Word and Excel were Mac software that Microsoft developed only for the Mac. Early Windows versions 1.0 and 2.0 were utter dogs and they didn't have any kind of apps ecosystem either. So your historical comparison is of the late stage where we are yes now also moving in the iPhone and Android war, and I see perfect parallel. Take a look the the 1980s early years of Mac vs Windows and then the picture is a lot more clear.

Rotten - good point about the four screen sizes. There was just news yesterday out of India that old stock iPhone 4 models are now being liquidated at low prices and the old iPhone climbed briefly into the top 10 of India smartphone sales in independent channels. There is plenty of life still in the older form factors (as minor headache point for iOS developers)

abdul - on the Xiaomi number 34.7M in 1H. That also means they are on track to fall well below their announced target of 100M in 2015. 35M would suggest about 80M for 2015 in very rough terms.

Wayne - your thinking reflects a very myopic view to the mobile market, thinking the USA is the biggest or most relevant market. It is in very many other industries but has never been so in mobile. The leading market has always been Japan and even Apple clearly takes all its cues from Japan. You mention Apple Pay and NFC. Yes, its true Android had NFC mobile payments before iPhone and Google didn't do much with it - in the USA. Come visit Japan or South Korea where NFC has been part of the payments ecosystem for a DECADE. Every single 7-Eleven in Japan accepts NFC payments from a mobile wallet (called FeliCa run by NTT DoCoMo and licenced to the two rival networks). What Apple (and Google) hope to do with the premium mobile wallet idea is - again - a copy of what is daily life in Japan. NTT DoCoMo's Osaifu Keitai (mobile wallet) has its premium service called iConsierge which is the most advanced mobile wallet solution on the planet, a paid premium service that was adopted fastest in Japanese mobile history and has huge customer loyalty. And this was also done.. years ago. No, Apple is not taking the top of the mobile payments pie - in ANY other market than the laggard USA. In Finland 4 in 5 consumers makes payments on mobile phones. In Sweden most bus tickets are paid by mobile phone (busses no longer accept cash), I could go on and on and on about this. The USA is the laggard which is the only reason that Apple can 'shine' in that sad market.

Chithanh - yeah the IDC numbers are somewhat consistent with what I have reported here also before. In the price pyramid, Apple has in very rough terms about half of the top tier premium market (smartphones with prices above $450) and about a third of the second highest price tier. The current smartphone market is growing at the bottom of the pyramid, while the ceiling prices are going up as well for the costliest phones. Thus the premium prices phone tier relative size should shrink as a percentage but hold size in absolute unit terms. Apple in very rough terms would hold its share of premium phones, what happens in the next price tier depends a lot on do we get a model update to iPhone 5C in 2015 and do they lower those prices or keep them.

Piot - Sorry that may be mathematically true but then must be just accident of rounding-off. I am modelling modest usual growth from Q1 to Q2 and should be about 350M units up from 340M last quarter. And if you remember, I also think Q1 was artificially low, I am expecting our analyst houses to revise their Q1 numbers up a tick or two which means Q2 has upside potential towards 345M but am looking at about 340M for now. 50M iPhones out of 340M would be 14.7% so rounding off to 15% we're still there.

Chithanh - thanks for the Dutch court ruling link. Interesting development and good for the industry and good for the consumer in the long run an is consistent with the gradual ending of subsidies.

Paul - haha thanks (my Apple Watch predictions)

Per - haha funny (unicorns)

On the Yotaphone news as many commented already, its not total switch from Android to Sailfish, its primarily the government where Putin wants partly to distance himself from any chances of being spied upon by the West and partly just the way he likes to thumb his nose at the USA. Nice little win for Sailfish OS who certainly could use any good news.

Ok I'll post these and come back with more

Tomi Ahonen :-)

Tomi T Ahonen

More replies (am on July 6 comments)

NO ONE - thanks! (SMS used in business)

abdul - thanks! (Consumer Reports agrees that microSD, waterproofing & removable battery make Galaxy S6 less desirable than S5). Note that Consumer Reports - the most trusted US consumer goods watchdog and recommendation publication - recommends the S5 ahead of the S6 - and then remember the ComScore stats that S5 is actually outselling the S6. Yeah I think I still have something to contribute to this industry haha...

Wayne - on the 'recurring theme' Apple pattern. Your prediction is definitely plausible. But do you agree that this cycle the way you describe it, with each year outselling the previous, is mathematically not sustainable indefinitely? There are not enough affluent people (and their proportion is not growing fast enough vs poorer people) to sustain this growth pattern indefinitely. So some year, it has to happen that every last ounce of growth has been squeezed out of iPhone sales, and it stalls (growth stalls). And iPhone sales are flat, year-on-year for full year numbers. Isn't this 'inevitable' in your view too? Isn't the math 'obvious' that this 'has to happen'.

If that is the case, then it is an intriguing question of 'when' and of 'how'. As you have seen over the years, I have not yet predicted peak iPhones. But I did predict the peak of its market share and was the first to call it. Now I have issued - this year - for the first time the warning we are nearing peak iPhones overall. And then the interesting warning sign is the first QUARTER where iPhone sales stopped growing. I think that is the 'canary in the coal mine' After that first negative quarter is reported, we are almost at peak iPhones. It may be prolonged by 'desperation' moves by Apple such as drastic product changes and price cuts, but that point is coming and it is inevitable.

I keep coming back to that word. Whenever we see 'inevitable' (from me) that is a VERY profound point that can steer strategy. Most tech changes and trends can go either way or a multiple of ways but most significant trends achieve a fulcrum-point after which that given matter becomes inevitable, such as we saw with say Android dominance or Nokia's fall. At some point its unstoppable. The Apple growth fantasy that your scenario seems to support, is untenable. Or if you think Wayne it is not, please tell us so, and tell us why Apple could keep growing iPhone unit sales forever.

Now, when iPhone growth stalls - that, I think, will be a shock that Apple shareholders have not prepared for. It may well bring comparisons to the Steve Jobs era and might result in calls that Tim Cook needs to step aside. And I think - this isn't a share price blog but I'll allow that discussion about Apple stocks into this thread if it relates to this scenario - yes, it could result in a bubble bursting, and Apple's share could go into a years-long-unstoppable decline not unlike how Nokia went after its invincibility was ended.

Most Apple shareholders are Americans. Most Apple products are not iPhones but iPhone accounts for more than half of revenues and profits. The iPhonne's market share in the US market is massive compared to other continents. And I would guess, most Apple investors are blissfully unaware that iPhone only sells 10% of the world's phones. Actually that they think Apple sells twice or three times that. And when that reality hits in - one, that the size is actually small and two, that the growth has ended... I think that will be a shock that few are prepared for. And then if the share starts to tumble and ever worse news comes in (again iPhone sales down, yet another quarter down, yet another market share down, yet another bad result in China, in Europe, even in the USA...) and meanwhile Android runs ahead and Samsung towers and others come in. I think... because of Apple's past in the Mac vs Windows wars and Apple's near bankruptcy, a growing fear will kick in that nothing really can stop.

And then that Apple Watch will be the kicker. This was supposed to be the next big thing and it isn't. And all the hope in the Apple share price that it will 'always' grow, will vanish, and even as the company is incredibly profitable, all that hope will be taken out of the stock and just like Nokia (which was far more profitable than any other phone maker during the economic crisis) suddenly investors abandon that broken promise..

Which would be exactly as unfair to Apple as it was to Nokia. The fundamentals would be sound, Apple would still be highly profitable but then the investors find their next darling and that might by then be Google haha if their mobile plays start to dominate their quarterly results.

Ok will post this and yes, for this discussion thread, on Apple future, I'm now allowing discussion of its share price and corporate performance but only on the future vision. Do mention if you want to discuss that, if you think Apple can continue to grow or growth will stall, that is a critical point in that 'debate' haha..

Tomi Ahonen :-)

Tomi T Ahonen

More replies (from July 7)

Per - good analysis on the economics long-term and emerging world.

Egghead - yeah, you make some good points but you're also seriously mistaken. Apple's share in BRIC countries is pitiful outside of the rich class. But in all BRIC countries the market does not have the distortion of handset subsidies as Japan and USA, the two best iPhone markets. When the real price is exposed, iPhone share suffers intensely and the real value proposition is fairly evaluated. There was a good value proposition in 2009. It was still a competitive value proposition in 2011 but today, the iPhone is a me-too catch-up device of nothing going for it except a premium brand and reputation. The usability gap has closed, and apart from that, there is nothing left where Apple leads but plenty where it lags. One thing Apple is blessed with, however, is morons in the management of its rivals, just look at the disasters at Nokia, Blackberry, HTC, and more recently Samsung and Sony. Apple has been given an easier path to its share. That won't remain so.

Per - good response to Egghead and nice analogy BMW vs Porsche

On the Samsung results announcement - so total revenues are down while chips business is strong (so handsets down more). And S6 Edge has delivery constraints so there would have been more demand but Samsung couldn't satisfy that demand. Is good news but it means they sold all the Edges they could make. If the handset revenues and profits are down while S6 Edge sold out at the top-price smartphone, it means generic S6 is having a terrible launch quarter and/or the rest of the lineup is underperforming as usually happens when the flagship falters. As Android overall is up in market share compared to Q1 and iOS (and Windows and Blackberry) are down and Tizen is too tiny to matter in its slight share but strong growth - it means someone ELSE is gaining while Samsung is stumbling. That is not Sony or Xiaomi as we have already heard. It is Huawei as we've heard. Who else is gaining, very strong guess for LG monster quarter but also Lenovo, Coolpad, ZTE are strong candidates to have a good Q2.

Catriona - on S6 vs Edge and the missing features.. SOMETHING caused S6 sales to be less than S5 and for the S5 still to outsell the S6. This is while Android overall is growing. Can you please give us any - ANY - alternate theory why the highly-praised S6 flagship is now underperforming if the missing features microSD, removable battery and waterproofing are not the reason?

Chithanh - good point and to add to that. The overproduction of Galaxy S6 that is now not selling, means it is sitting in warehouses and that in turn means price cuts which then hurts the brand even more - and makes the older S5 even more a compelling offer as the S6 is seen in deep discounts.

Per - LOL I had not thought of that before. Yes MeeGo would have been the smarter play by Nokia in also giving rise to a 'non Android' platform. Thinking along those lines, if the MeeGo handsets like N9 and N950 and others would have sold, they did look like the Lumias (or more accurately of course, Lumia looked like N9 because they were based on the same design work, the Lumia 800 was a converted MeeGo device). If Nokia had offered a series of MeeGo devices WITH a choice of Windows Phone, like the Lumia 800 sold in two models, one with Windows and the parallel model with MeeGo, it would have given the carriers the option to sell the 'non Windows' devices and forego that part of the boycott against Microsoft. MeeGo would have taken a natural transition from Symbian (as originally planned) but Elop as Nokia CEO could have made a parallel Windows Phone offering with Microsoft PR money. In some markets where carriers are strong, the MeeGo devices would have been the only Nokia game in town but in markets where handsets are sold by independent retailers, a good Windows promotional package could have given them good sales too.

First off, Nokia would never have died if MeeGo had been allowed to sell even those first three devices (N9, N950, Lumia 800) in the first year, ie 2011. Most loyal Nokia Symbian users would have loved MeeGo and these three devices were 'pure' Nokia and the Lumia 800 in MeeGo form would never have pretended to be the flagship (which was the N9) and as the mid-price MeeGo device, would have just expanded MeeGo sales (as no doubt originally planned). So Nokia would have been highly profitable with these three devices. Would Nokia have lost market share shifting from Symbian to MeeGo? Probably. But now imagine Windows Phone in that mix. Could it have done WORSE than 2.5% today? If Nokia had an ex Microbrain as its CEO pushing a Lumia variant alongside MeeGo and Microsoft eagerly providing cash to support the platform? Windows had 4% in 2010 before any Nokia smartphones had been sold running Windows. Nokia had 34% in 2010. So lets say Nokia loses half its market share in the transition to MeeGo and Windows, away totally from Symbian say by 2014. Nokia at 17% today. Say one quarter of that is Lumia, especially in the US market and in some random world markets. So give Windows 4%. Add two points of share from the other Windows partners and Windows Phone could easily have 6% today. MeeGo just on Nokia would have 13% (plus some points more from partners on the OS, especially in Japan). If we say Apple was at 15%, then the world would look like this. Samsung biggest smartphone maker on Android and Windows (and knowing Samsung probably by then also on MeeGo). Nokia second on MeeGo and Windows. Apple third just on iOS. Android would be biggest OS with at best 65% and probably less than 60%. iOS second at 15%, MeeGo third at 13% or above, and Windows fourth at 6%. And Nokia would be alive in mobile, and Windows would have a life in mobile. All destroyed by that lunatic Elop.

E - thanks! Very interesting snapshot from Switzerland. And yeah, fascinating development with tablets, I wonder if that foretells a global trend shortly (the Swiss are among the richest nation on the planet, depending on the day and exchange rate haha).

Wayne - iPhone unit sales and market share are down from Q1, every major analyst expects sales down from the recent peak. So its the Android family who are eating Apple's share now not the other way around. But this is the standard pattern every year. The only way to measure who is winning/losing is ANNUAL (or 12 month moving average) share in the case of Apple.

ok, that brings me current

Keep up the discussion!

Tomi Ahonen :-)


Do you really want to open that can of worms and allowing stock market discussions here? You will find yourself among investors trying to pump their stock in no time.

> Apple's stock price already has baked in that Apple can't keep growing.

I would not make any bets on what the stock price has baked in and what not. I remember back when Intel was the shooting star, and their stock took a dive during earnings call because their profit was only "slightly" above analyst expectations. A very similar pattern can now be observed during Apple events, everybody expects Apple to release the second coming of [insert whatever technology], and when that doesn't happen then even solid product launches aren't enough.



"Meego had a shot, Elop killed it and by doing so ensured Androids hegemony. It could have established a three- or even four ecosystem market. Instead Microsoft sent in Elop to destroy that."

Maybe it had a shot, but it's hard to see how good that shot was. As you remember RottenApple pointing out, the installed base of Symbian phones was not enough to get the Qt app development starting in volumes. The developers were already too busy with iOS and Android and there was simply not enough people to start with Qt apps, in volumes, back in 2010. Now how probable it would have been for MeeGo to succeed without lots of apps?

Per "wertigon" Ekström


But it would have apps, that's the thing.

See Tomis reply further up - he made an educated guess at a split of 65/15/13/6 between Android/iOS/Meego/Windows with quite possibly more growth for Meego and Windows.

It could have worked, but never got the chance.

Tomi T Ahonen

To all in thread

NY Times and Reuters are reporting that Microsoft will lay off more people today and they expect it to hit hardware division, very likely bulk of layoffs would be Lumia and ex-Nokia dumbphones businesses.

Will keep an eye on it today and blog if it happens

Tomi Ahonen :-)



"But it would have apps, that's the thing."

How? Didn't you read how RottenApple told us the developers were already too busy with iOS and Android and that's the reason why there were so very few Qt apps in 2010? The migration path was pretty much only for future apps, not the current ones.

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