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August 10, 2015

Comments

winter

Tomi,

Just for statistic, could you give us the total Q2 unit numbers for Android and WP?

Paul

I think that a rise even further in smartphone market share of Chinese phone companies would be a really good thing for Android and it would put pressure on Google and its Google services (because all these Chinese smartphone companies sell their Android smartphones in their home market without Google services)!

Paul

Nokia bought Alcatel some time ago! Can technically be considered that this is that this:

TCL/Alcatel . . . . 11.1 M . . . 3.3% . . . . . . . ( 2.8% ) . . . . . . . Android

is actually this?

Nokia . . . . 11.1 M . . . 3.3% . . . . . . . ( 2.8% ) . . . . . . . Android

RottenApple

@Paul:

No. TCL/Alcatel is something different than what Nokia bought.

Winter

This is a remarkable quarter. The number of smartphones sold fell for the second quarter in a row:
Total
4Q2014 377.4
1Q2015 340.8
2Q2015 338.4

Apple dropped, as it does every year, but Android increased after having dropped last quarter
Android (estimated, because Tomi did not add the numbers)
4Q2014 288.4
1Q2015 262.3 (estimated)
2Q2015 277.5 (estimated)

Until this year, there was never a drop in the number of Smartphones sold in any quarter (quarter on quarter). Nor a drop in the number of Android phones sold in any quarter.

Seeing the total number of Smartphones sold drop while the number of Android phones increases indicates that the record iPhone sales this winter were indeed exceptional.

Winter

Note that the Windows Phone sales have now been essentially flat for four quarters (assuming 3% for this quarter):
Windows Phone
2Q2015 10.2*
1Q2015 10.1*
4Q2014 11.2
3Q2014 10.4
(* estimated)

We will have to see whether WP 10 will be able to entice new sales. I do not believe it will.

Earendil Star

No need for carrier boycott. Carriers just pocketed the MS windfall monies aimed at supporting WP mobile POS burning platform, and that was it. WP's interface is such a mess that the rest was achieved by WP itself and by MS' arrogant and client shafting attitude, compounded by a mismanaged exploitation of the covert Nokia acquisition by THT Elop the flop. The only meaningful sales were achieved while the Nokia brand was being used where this brand was strongest (Europe).
Never in the field of human technology was so much wasted while harming so many and achieving that little.

Regarding Apple, the launch of the iPhone 6 / 6+ was a crucial moment. Had it stuck with Steve Jobs' view, it would really be bleeding now. Yet, Tim Cook is well deserving his money and proving that Steve's choice of his successor was prefect.
Once again, Apple was able to create a superb terminal, with fantastic design, and an OS that, although a bit dated and not as flexible as Android, still remains a reference in terms of fluidity and robustness.
This is why it is still relevant today. It is still the status symbol in this space. Yet, how long can this be maintained without any significant further breakout remains to be seen. But the people longing to upgrade their tiny iPhone<5s are still a lot, and this will still be providing Apple some further breathing space in the immediate future.
And let's not forget the growing momentum by Apple in corporate sales. This might be the trick that earns Apple many lucrative years to come.

RottenApple

@John Waclawsky:

"So little of the Apple installed base has upgraded that it is most likely iPhone 6S/6S+ will continue in the iPhone 6'ish levels of market share."

That may be - but it won't repeat the jump in sales we saw last year, which some Apple supporters seem to take for granted.

abdul muis

Tomi,

I was wondering if you think Huawei can beat Apple? Perhaps in 1 year? 1.5 years? 2 years?

Tomi T Ahonen

Hi all

Winter - sorry yeah, did this fast on vacation. Android: 278.8, iOS 47.5, WP 8.8 others 3.3

Paul - No Nokia only bought what remains of Alcatel (and Lucent) the handset business still sold under the Alcatel brand was sold to TCL so Alcatel numbers are within TCL numbers (who also own phone brands like Palm, RCA)

John - its true that a large part of Apple's installed base doesn't have phablet-screen models yet. But remember, this installed base includes first-time-owners and second-hand-owners, so those who can't afford a new iPhone of any price, won't be buying the 6 models now as new either, they will wait until they get those as second-hand (or maybe as hand-me-downs). And the peak sales period was the normal duration for Apple new models, but the spike hit higher levels no doubt fuelled by the pent-up-demand for those who really wanted larger screen iPhones. Note, each year since late 2008 there have been replacement sales so this is nothing new, it is part of the pattern for Apple. The full year annual market share for iPhone 2015 is still looking to be down from 2014, this quarter was far too bad to support the theories that iPhone had reversed its annual market share decline pattern.

abdul - Someone soon will, I am pretty confident. As Apple nears 10% level, and as the consolidation starts to take hold, we should get at least one if not more makers who can sell smartphones into the roughly 15% level and go past Apple. Will that be Huawei? The numbers NOW look good but gosh, remember when Sony was in third place? Or when LG was in third place? Or when Xiaomi was in third place? Or when Lenovo was in third place? Its too easy to have this Huawei bump the result of the stumble at Samsung and an opportune 'hit phone' in exactly the specs customers want, and next year's model might not be that anymore, and Huawei could fall right back into the pack. But yes, today, Huawei seems like the strongest candidate to achieve that. If I had to bet, I'd say Lenovo and TCL have the best portfolios and distribution patterns to do that consistently but Huawei is not far. LG could do that too (should be able to) and arguably even ZTE. Most of all it takes a longer-term view and dedication by management and VERY sharp segmentation, understanding especially the lower-end market and Emerging World markets, which are not uniform.

Keep the discussions going

tomi Ahonen :-)

Telmo Pimentel Mota

Hi Tomi,

First time comment here. Congratulations on the books and blog. I'm a frequent reader and like your writing.

One thing got me curious and after some Googling I could not find the image/data compiled for it: evolution of mobile app languages.
Here I'm considering anything that could add features/games to a phone after factory like Java ME, Brew, Qt were.
The graph I thought was focused on market percentile year over year.
How some of these languages got popular (as much as carriers would let them) and then died.

I know the app boom happened with iPhone App Store and data previous to this is difficult to find or trust.
But if you happen to have (or know who does) would you be kind to share?

Thank you and regards,

RottenApple

@Wayne Brady:

Of course you will still get the jump in Apple numbers. But it's Q4 that will tell the ultimate story and before that isn't done all current numbers are meaningless. Apple right now isn't profiting from some brilliant strategy, they merely catch up with demand they failed to supply in the previous years.


Concerning the upgraders, yes there may be plenty left but let's be clear: Those who haven't jumped on yet are those who will just do the regular upgrade when the time comes, they won't create another sales boost.

Per "wertigon" Ekström

@Wayne, Duke:

You guys are so blinded by the success and the speed that you fail to see the 100m cliff a little bit further down the road. But yes, keep on gloating. It won't do you much good once Q4 numbers are in. :D

mpinco

With Android at 80%+ share, this industry is beginning to look/feel like Windows 98/7. We basically have 2 smartphones (Android/iOS) battling it out for the consumer space. Size and bling is all that matters? History repeats.

Just moved from Android to BB Passport. Primarily for functionality, security and in consideration of patent activity of Apple/Google.

RottenApple

@Wayne Brady:

Sorry, but you are talking nonsense. There won't be a strong Q4 spike this year because the effect that created last year's spike can't be multiplied by itself.

So, there's just two outcomes:

1. There was a jump in sales that persists: Apple will grow but moderately
2. There was a spike in sales that subsides: Apple will be either flat or shrink.

But the one thing that WILL NOT HAPPEN is yet another jump upward. But that would be needed to meed the insane demands.

In recent years Apple gradually moved into new high end markets (Japan, China) which made their sales grow. So did the large screen effect. The new markets will persist, the large screen effect will subside, but without any new high end markets left the end of the growth will be near.

"So we have two stories. The iPhone 6 isn't selling great and it's market share is falling. AND - Apple's iPhone 6/6+ sold SO well, there is no way they are going to sell even as much in the next model."

Who said that the iPhone 6 isn't selling great? But why do you jump to the conclusion that this kind of growth is sustainable? As I said, the end of growth is near, Apple has almost saturated its target market so where should that growth come from? And without growth their unit sales will actually peak. I do not expect it to happen this year but it won't take long.

mpinco

But what we do know is that Apple margins are high.

How will the elimination of subsidies impact sales? With Verizon eliminating subsidies/financing, how well will those high end phones sell to the low information buyer (hey, I can get a iPhone for next to nothing!) who now has to pay $700 for a phone?

iPhone7 needs to both lower the cost AND raise the feature set. Margins and market share will be adversely impacted.

mpinco

And with the end of the subsidy model, I would expect upgrade cycles to lengthen, further reducing consumer phone volumes. Also expect a shift to lower end phones.

Tomi T Ahonen

mpinco - good point, its what I predicted more than a decade ago before the iPhone even launched (and many others have said it too) that the smartphone market would become similar to how the PC market was.

Wayne - don't put words into my mouth, you know I hate that

Rotten - I EDITED your comment (because I am such a nice guy) removing the part of the eliminated Wayne comment which put words into my mouth. I know you know that wasn't true but I don't want anything like that to stand, even in the comments.

mpinco (second comment) - on subsidies, long term term will bring more sense to the market where consumers see exactly what they are paying for and how much. Short term tends to hit more the premium phones and help lower-cost makers because the real price difference is far more obvious than if hidden inside 2 year annual payments and subsidies.

Tomi Ahonen :-)

Pekka

I just can't see apple losing market share this year. Q2 2014 they had 11% market share now Q2 2015 they have 14%. They growing about 35% year to year growth while android is flat (flat as in 0%) this year.

Sorry Tomi

RottenApple

@Pekka:

Your math fails. Q4 is always the strongest and they won't get the same market share as last year so it will cancel out the higher numbers of the other quarters to a significant degree.
You are making the same mistake as all the other Apple fans, taking current growth for granted while it can be tied to a singular effect that won't repeat.


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