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« Why SLBM is game-changer for North Korea where most other recent military stunts were just sabre-rattling. This scares the shit out of everybody | Main | No Time to Panic as One Quarter Shows Minor Dip in Smartphone Sales - Total Smartphone Market Will Grow This Year (and here's why) »

April 26, 2016

Comments

Winter

@Tomi
"YES the industry has SHRUNK about 1% vs last year."

I think you did not see the truth of your own predictions. It is screen size that drives sales. As all those who want a big screen already have one (last batch with the big screen iPhone) , there is no reason to buy a new phone anymore. I know of young people who buy replacement batteries io new phones. I still use my 3 year old Nexus 4 and have no plans at all to buy a new phone.

As for new users, the real, first time users, growth markets were the developing world (aka, China) who's economies are now in a slump. The next boom in smartphones will have to wait until the economies of the developing world take off again.

Tester

So, people act surprised?
Come on, under what rock were you living?

It was inevitable that this moment would come - the 18 month replacement cycle is so insanely short that with YoY improvements in product levelling, sales would also stall.

It's rather obvious that for most users the current batch of smartphones are good enough and this is moving toward a 'replace when broken' market - just like it happened with PCs and which apparently no analyst got. They are still babbling about a decline that's mostly the result of longer product life. (My current PC is 4 years old, and if I can believe statistics, despite that age still ranks in the top 10% of fastest systems in use. The only investment I made in that time was buying a 512GB SSD last year as a new system drive.)

Tester

Apple didn't gain market share because they were so great, they also didn't gain market share because the market slowed down.

The only reason they gained market share is because when they finally released their large screen phones two years too late they regained a part of what they had lost in previous years.

And now we see the true trajectory where things are heading. Apple gets hit by the combined effects of a general market slump and the downward slope of the spike they are coming off.

Oh, and we again get those idiotic stories about Apple having supply problems with the iPhone SE because the demand is so great? When did we hear that last time? Yeah, right, last fall, and it was all a mirage - the final numbers weren't that great.

Still, each year the same story: Apple has supply problems. Don't these people ever learn? That'd reek of incompetence if it was true. Of course it's just a fish story for the press so that Apple is covered when numbers do not turn out so rosy.

ChrisG

@Lullz

You have got a bit over-excited at my use of the term 'expectation'. As you suggest, the quality of a product will be an important factor in determining whether it meets the expectations of consumers, but there is more to than that. Each product is compared to the next before its technical virtues can finally be properly appreciated. When you compare Apple smart phones with other leading brands it doesn't really stand out from the crowd. Don't be shocked by the news but despite the use of the iPhone as a kind of benchmark there are many good smart phones and phone brands out there, without any one company able to claim an uncontested technical leadership.

Even if I were wrong about that and there were a clear technical leader this does not necessarily confer an advantage to that company because whether a phone is sought after and who particularly needs it will come down to the purposes that its users accord special worth. So, whether a phone is especially suited to a particular use will matter to some buyers. For example, an individual may like the iPhone but buy the Sony Android because of its camera perhaps. So expectations of a buyer may be rather varied in line with what matters to them.

Also, you don't appear to be inclined to acknowledge, despite the obviousness of the point, that consumers will naturally give some consideration to the value represented by the various products that might conceivably meet their needs.

All of these things may figure in the expectations of a consumer, and that is a good thing, because it helps them to keep in mind what is in their interest and not be overly influenced by all of the self-serving marketing BS.

Did no one teach you what 'expectation' means?

Tochi

While Tomi is head and shoulders above other analysts in this industry. I fear that he may have finally gotten carried away with the Apple kool aid / reality distortion field.

Tomi, you claim that Huawei will never catch up to Apple ? Have you not read that Huawei is now considered a luxury brand in China ?

So what on Apple sales decline? , really Tomi. Have you forgotten the way it goes in this game - once a manufacturer starts to slide, it continues to slide until it dies. Come on man, you have chronicled this scenario time and time again.

I will wait until the iKool aid wears out. Your reply will be appreciated. Thanks.

Abdul Muis

The only way iphone 7 will be a blockbuster success if apple raise the screen size. i.e. launch 5"-5.2" & 5.7"-5.9" phone, and give people to upgrade to bigger size phone. Otherwise, iPhone 6/6S user won't see the real benefit of upgrading the phone.

Robert

Hi,

Just saw a long term review of the first iWatch:
http://www.smh.com.au/technology/technology-news/my-awful-year-with-the-apple-watch-20160426-gof43w.html

Lots of things to improve for v2!

Per "wertigon" Ekström

HP starts to compete with Macs:

http://liliputing.com/2016/04/hp-chromebook-13-launches-for-499-and-up-supports-up-to-16gb-of-ram.html

And also, many users are finding iTunes a bit clunky:

http://qz.com/666078/itunes-is-13-years-old-today-and-its-still-awful/

So yes, Apple does have it's fair share of problems, starting with the fact that their once untarnished reputation for making stuff that are dead simple, beautiful and simply works starts to get replaced with devices that does work very well, but the simplicity is gone.

Still not going to affect the tech giant for years; but if left alone this is a serious threat to the fruit company :)

Tomi T Ahonen

Hi everybody

Just posted my 'do not panic' blog about the 2% decline in Q1 year-on-year comparison. Yes it was a single-quarter contraction, very true, measured. Yet it does not mean this year sees a decline or even plateaou of smartphone sales - because (you all know this) MIGRATION. There are still 500 million dumbphones sold per year, those all will migrate to smartphones by 2020 and that means we see another 100 million or more of smartphone sales this year - SIMPLY BECAUSE OF MIGRATION.

The Q1 decline is mainly due to the surge/spike that some of you also accurately spoke about here on this blog (haha I should just let you guys write my blog, you know this stuff so well). So iPhone market share in Q1 of 2014 was 16% (while iPhone was on gradual downward trajectory year on year). It would have been down to say 15.5% for 2015 except it wasn't. It jumped up to 18%. Now a year later, we are EXACTLY on the same trajectory as before - now iPhone at 15%. Year 2015 Q1 (and year 2014 Q4 obviously) was an anomaly. A spike. We are past that, and Apple is back to its normal gradual downward path.. of the original strategy of one flagship class iPhone per year. Because THAT STRATEGY now changes, Apple will get SUSTAINABLE gain out of the NANO model adding to its total sales. iPhone 5 SE sales are remarkably strong as Apple said, they can't keep up with demand. So Apple total market share will climb this year, I said expect around 18% (depends also on the iPhone 7 being the normal success the new model usually is, which we won't know until we see it).

There was a spike or surge in 2015 this quarter and the Christmas quarter just before. We have talked about it here with you guys, you KNOW this. And its easily able to be measured now since we have both the previous year and following year data. And with that.. it means the 'MARKET DECLINE' from last year's Q1 to this year's Q1 is also an illusion. The market on its long-term trend is still growing but there was a one-off spike caused by Apple last year, which leads a superficial analysis to conclude, oops the smartphone market is shrinking. It isn't. BUT as I wrote, the RATE of growth may be sluggish this year. We have to monitor that in Q2 and Q3 numbers.

So there is a new blog for you if you want to discuss just the overall market size without the Apple stuff... lets keep the Apple stuff here in this thread.

Tomi Ahonen :-)

Tomi T Ahonen

PS I love reading that some who greatly appreciate my numbers think that THIS TIME perhaps Tomi has lost it..

Yeah. Keep on wishing but no. Not this time either haha

Tomi Ahonen :-)

Per "wertigon" Ekström

@Wayne:

Celebrate the last good year of the iPhone, no probs. Things might take a nice turn for the worse and much sooner than you think. :)

But now we wait for Q2 numbers. Those will tell us how Apple is doing and how their moving average is going. The 6S though? Not looking good, at all. :)

Huber

This year, Apple has stiff competition, unlike last year when the Android vendors blew it.

The Xiaomi Mi5 is a cheap high end phone, but it is still hampered by its fugly OS. Still, a Snapdragon 820 for $300 is amazing.

The SGS7 is waterproof and has SD card support and also a less ugly UI. As it seems, it is flying off the shelfes.

HTC also got its act together with the 10, let's see how it does. I think it's too little, too late to get HTC back into the top 10, but I think it can help them survive.

The LG G5 got a lot of flak because of some manufacturing issues in the first batch, but this seems solved (got mine on Thursday and cannot complain about anything).

Apart from this, the LG is the only high end offering with replaceable battery, and unlike last year, LG made no mistakes regarding the specs.

I already have unlocked the bootloader and flashed SuperSU, so at least for the European version I can confirm that LG did it right this year.

So last year, Apple at least had something new with the bigger screen phones (even though the specs were mediocre), while in Android land we had feature regression and the problem-laden Snapdragon 810 in the high end.

In 2016, the tables have turned: Apple has only the SE as something semi-new and the 6s as lukewarm offering, while Samsung, LG and HTC seem to have learned their lessons.

So it all hangs on the iPhone 7 for Apple, I think this will be the most important release since the original iPhone: If Apple cannot "wow" it's customers, they'll be in troubles.

If they can achieve this I cannot estimate, since the average Apple customer seems to value features I don't care about and doesn't care about features I value.

Per "wertigon" Ekström

@Wayne Brady:

Off topic but just stumbled across this Android app:

https://play.google.com/store/apps/details?id=com.carrotpop.www.smth&hl=en

When frustrations with Android go too high simply install and enjoy :D

Tomi T Ahonen

LOL...

While this blog IS NOT and even after this comment we WILL NOT tolerate discussions of the daily ups and downs of share price.. funny to that Tim Cook has to come out to reassure investors that the reaction to Apple share price is not justified.

(Would I feel like saying 'told you so' haha). And obviously, there is NOTHING justifying the drop in Apple's share price in terms of Apple strength in industry and future prospects. The problem is (and continues to be) that there were too many utterly unreasonable expectations in Apple share price... blame Apple management for that, the Apple Distortion Field etc - they just created a real Jesusphone feeling about Apple that it was somehow beyond the effects of economics. Will be a hard lesson for those investors especially those who joined the party recently.

But imagine what the panic would be like, if Apple had NOT done the iPhone 5 SE model haha..

But Wall Street is often divorced from reality which is part of why that type of discussion is a lot of heat with very little light. As I wrote on this blog article right in the title 'not a sign of any trouble at all'

Tomi Ahonen :-)

ChrisG

@Lullz

You are right. I badly misconstrued comments you made on a comment of mine. I am sorry for that. Perhaps, it is true that when calling on evidence to support our different views where you see the bill of a duck, figuratively speaking, I tend to see the ears of a hare - I hope everyone is aware of that well worn philosophical allusion. That said, it is clear that we are both looking at the same evidence and your take on it was entirely legitimate, although I will keeping trying to find compelling arguments for my own different point of view, naturally enough.

Tomi T Ahonen

To all my fans who crave all the numbers..

Its out! TomiAhonen Almanac 2016 ed just fresh out of the pdf-file-converter... shipping the first pre-order Almanacs out now. Its again bigger than last year, now 213 pages, it has even more charts (again) now 109. And for you fans of phones, the handset chapter grew the most, now includes GPS installed base, dual SIM installed base, phablet screen annual sales... tons and tons of again new info plus all the goodies you've loved in past Almanacs. Its formatted to fit your smartphone so you can carry all the mobile stats in your pocket every day. And best of all - the price has not changed in 8 years.. still 10 Euros. Here is the direct link to the ordering page. Get yours today...

http://www.tomiahonen.com/ebook/almanac.html

PS also all of you know someone who 'should have this data' haha, tell them about the Almanac - the BEST data package of mobile anywhere at a ridiculously low price at that, by the stats guy of this incredibly complex and volatile industry.

Tomi Ahonen :-)

Abdul Muis

https://www.theguardian.com/technology/2016/jun/02/ken-segall-apple-steve-jobs-simplicity

"How Apple lost its way: Steve Jobs’ love of simplicity is gone

Ken Segall, who worked alongside the tech giant’s co-founder, says company’s incredible growth was rooted in his love of simplicity – but things have changed

Four years ago, I wrote a book about Apple and the power of simplicity. It was the result of my observation, having worked with Steve Jobs as his ad agency creative director in the “think different” years, when Apple’s stellar growth was rooted in Steve’s love of simplicity.

This love – you might call it obsession – could be seen in Apple’s hardware, software, packaging, marketing, retail store design, even the company’s internal organization.

But that was four years ago.

Though Apple’s customers remain fiercely loyal, the natives are getting restless. A growing number of people are sensing that Tim Cook’s Apple isn’t as simple as Steve’s Apple. They see complexity in expanding product lines, confusing product names, and the products themselves.

Is this just perception, or is it reality? Has Apple developed a problem with simplicity? Or is it simply maturing as one should expect from a global company? It’s difficult to be objective because Apple has become the world’s most overanalyzed company. It’s created passionate fans and passionate detractors.

My experience with Steve has led me to admire Apple – but I also believe in tough love. This is a good time to put emotions aside and take a cold, hard look at Apple’s current “state of simplicity”.

[ more at: https://www.theguardian.com/technology/2016/jun/02/ken-segall-apple-steve-jobs-simplicity ]
"

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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