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August 23, 2017

Comments

Nokipoika

@Tomi
Any estimates on Nokia/HMD sales? Your take on new Nokia 8 flagship?

Tomi T Ahonen

Hi Nokipoika

Not yet haha, they ONLY just started to sell devices at the end of Q2. This quarter (Q3 ie July-Sept) will be first quarter where HMD has essentially a full period of sales of smartphones - but not full sales of all 3 handsets in all major markets (that roll-out is still ongoing). Q4 of this year (October-December) would be first proper 'full quarter' of sales, but we hopefully get SOME signs of quarterly sales levels of HMD Android Nokia smartphones (and perhaps also their 'dumbphone' numbers too, would be interesting) somewhere towards the end of this period.

As to Nokia 8, I think that is a 'placeholder' device, not the best HMD can do, which will be the successor to the Nokia 8, ie the Nokia 9 - THAT is their first 'proper' flagship, I think... :-)

Tomi Ahonen :-)

Tomi T Ahonen

PS to all other readers of the blog..

Nice nickname by 'Nokipoika' - it means 'little chimney-sweep (boy)' as in a Finnish children's song.

..Pieni nokipoika vaan, uunin piippuun kaa-too-aa... :-)

I remember singing that song as a kid

Tomi Ahonen :-)

E.Casais

"I will be interested in the "new entrant" race for flagships: Pixel, Essential Phone, and Nokia 8."

Honestly, why bother?

Pixel is a confidential player, Essential Phones are not even available yet (it has been "any time now" for months), and the HMD devices will remain a bit player till the end of the year. Besides, they are just rehashes of existing flagship features without anything genuinely innovative. There is objectively nothing to be excited about them for now.

More generally, the real battle for mobile phones is not taking place at the high-end, but in the entry-level to mid-range. This is where the hundreds of millions/billions of new customers are to be gained, and where I expect genuinely mass-market services and innovative devices to appear.

The marginal players targeting the topmost layer of the 1st world markets in a bid to grab crumbs from Apple are irrelevant from that perspective, and just detract from what potentially much more powerful and important new entrants (from India and China) are doing.

E.Casais

"I am interested in the direct competitors to the iPhone, that's where the cutting edge innovation in mobile is."

That is where we disagree. I do not see much cutting edge innovation in HMD, Pixel or Essential Phone. In fact, I see none at all. Those devices look like iPhone wannabes without any proper USP. In other words, utterly forgettable products. (For that matter, where is the innovation in the just announced Galaxy Note 8? A larger display with a _smaller_ battery???)

As for the entry-level to mid-range phones not being "interesting", I disagree strongly as well.

This is the market segment where the best price/feature device combinations are popping up, where genuine _mass market_ services (genuinely cheap ones, that do not require expensive operators' price plans, selective associated financial services, or costly peripheral equipment -- Macs, docking stations, etc) will take ground (forget Apple pay, think M-Pesa).

I suspect that this is also where extensive OS innovation will be forced to occur, for the current crop of major software platforms either require high-end hardware (iOS), or cannot manage the hardware diversity and security satisfactorily (Android). Besides, in those segments people barely use apps (the apps market is extremely skewed, something like 10% of high-end users generating 90% of all app downloads and payouts). Something in the OS will have to be recast (perhaps through modularization) to cater properly for those basic "smartphones" that are actually replacing, and being used as "feature phones". Finally, this is the market that HMD (which I do not consider appropriate to qualify as "Nokia rising from the dead")
is squarely targeting. So far 75% of its smartphone lineup is in that segment; this is where HMD will break out or fail -- not in the Apple-turf.

That perspective on the entry-level/mid-range has been my position for quite a while, so I remain consistent. And following Tomi's statistics, this is the place where the really significant new entrants have appeared -- such as Huawei.

E.Casais

Please no red herrings.

Those contenders trying to nab at Apple's heels are the genuine "Me Too" -- not the cheap devices you disparage, which are intended for a completely different market segment. You consistently refused to address that point.

Again, where are the innovations in those Essential Phones or Nokia 8? The Pixels do not even have Google Tango on them! And we should find those high-end "Me Too" particularly interesting? Sorry, but no. I see the point of going for an iPhone, there is none to go for those other supposedly premium devices.

The fact that those marginal (infinitesimal) players attempt fighting in Apple's segment does not automatically make them interesting. But your view of mobile is quite Apple-centric: if it does not deal with the same market segment as Apple, or the same technologies implemented in Apple products, then it is not worth bothering about. You should widen your horizon a bit.

AR is interesting -- and has been deployed on mobile devices for quite some years now. AR platforms have been existing for a while (e.g. Layar), others have been introduced more recently by big players (e.g. Baidu/DuSee).

What Apple is launching is fundamentally based on the technology it got by acquiring small companies (like Metaio/Junaio). It is quite certain that Apple has learned from all AR innovating pioneers to build a well-rounded offering. It is intriguing and I look forward to see what will be done with it. Hopefully something more original than tourism or game apps -- we have already seen plenty of those.

Finally, calling people "the folks" (or "the blokes") when one belongs to a completely separate social circle has a looking-down-upon tinge to it, but perhaps it is a European linguistic idiosyncrasy.

Per "wertigon" Ekström

So, might as well post an update for my linear toy model for Apple:

Predictions Q2:

Apple: 41.75 M units
World: 363.7 M units
MAMSA*: 14.19%

Actual numbers:

Apple: 41.03 M units
World: 356.1 M units
MAMSA: 14.27 %

So yeah, was a couple of percentages off in my predictions. New predictions:

Apple Q3: 45.75 M units
World Q3: 385.50 M units
Apple 2017: 212.8 M units
World 2017: 1 548.63 M units
MAMSA 2017: 13.74 %

So the trend is pretty clear, it's another down for Apple, and the downward spiral continues. Onward to next time!

* Moving Average Market Share Apple

John A

I think the Essential phone is interesting. They got a US carrier Sprint and according to some sources Amazon have invested in that company. So I suppose in time they can be a strong player in the "flagship" segment.

For Sony I see not a lot of hope, all new models looks old with huge bezels. And the new one for the IFA event will look basicly exactly like the previous generation. They seems to be unable to make a new form factor.

HMD Global/Nokia probably will reach top ten at some point, maybe when they got more models Nokia 2, Nokia 7 and 9. But it will probably be some time before that happends. I guess not until maybe six months to a year or so.

So no one can challenge Samsung, iPhone, Huawei in the top.

Then we got the smaller Chinese brands Elephone, Doogee, Vernee and so on. Will some of those be able to be a serious player in time? We will see.

NobodyMakesMoneyWithAndroid

But where is iPhone mini?

paul

Smartphone Maker HTC Explores Strategic Options

https://www.bloomberg.com/news/articles/2017-08-24/smartphone-maker-htc-is-said-to-explore-strategic-options

Per "wertigon" Ekström

@Jim:

The last three years I've made the assumption Samsung engineers are not total hacks. Yet, every year something happens, be it exploding batteries or just a general phone dud (like Samsung removing all the competitive edges it had for the S6).

So, this year I am going to assume Samsung is incompetent and will screw things up again, which will give Apple a nice Christmas boost. Historicly, it's now permanent. :P

My own projections are at 212.8M units, but I expect these to be slightly above projections, maybe 215M, 220M if Samsung screws up things again.

Also, let's not forget the #3 spot which is starting to release better and better phones as of late...

chithanh

@LongAAPL1997
If it weren't already evident from your user name, one could get the impression that your posts are thinly veiled attempts to push Apple stock.

> "“Apple. Huawei. Samsung,” Jonny Evans writes for Apple Must. “These three firms are the only ones making any money from smartphone sales, according to the latest Gartner data

That is a very uninformed statement. Did those writers not read the Android fragmentation reports? There are thousands of Android manufacturers, many of them small Chinese white-box vendors. They may live on extremely slim profit, but will not operate at a loss.

> It is also amazing that the Apple can resist the Osborne effect...

No, they can't. The Osborne effect just happens the same time every year, so it will not be apparent when you compare quarters YoY.

LongAAP1997

Breaking news. Samsung just introduced the Samsung Galaxy Note 8 with old operating system (Nougat). The new Android OS Oreo (thanks Nabisco) was released at the same time. We will see if and when the Note 8 gets this upgrade. Any bets how many months it will take?

LongAAP1997

"But now Samsung is "safely the largest smartphone maker into the foreseeable future""

2018 seems to be fàr away.

john F.

@Per.

You talk "predictions" while referring to apple? Is this some kind of a joke? I don't get it.

Apple supplies extremely accurate guidance and numbers, there is absolutely nothing to predict except a rounding error in percentage points, in fact in this particular case apple is boring not predictable as they give out the numbers.

Per "wertigon" Ekström

@John F. I have my own model designed to keep track of Apple market share, but it's more of a hobby projection than anything else. It's based on moving average, e.g. take the last four quarters, add all of Apple units vs entire smartphone market units, then look at Apple percentage.

Still, it's been around 7% off so far on moving market share, since Q1 2014. That's something. :) Here are the statistics in case you are wondering:

https://docs.google.com/spreadsheets/d/1hIbcjggIqiYF9lS2LbLWMcOypA6NoqTs-7EawsAEyfw/edit?usp=sharing

Also, Apple did cheat quite a bit with those numbers, like adding a week of sales to the Q4 last year. And yes, I go by calendar year like Tomi, while Apple go by Fiscal Year. But yeah...

Per "wertigon" Ekström

@Long:

Since Apple use fiscal year, their Q1 reports is the calendar Q4. That's all there is to it.

And yes, it was awfully convenient that they added a week last christmas quarter, since it allowed them to avoid reporting their first down YoY christmas quarter. Had the same weeks compared to the previous, it would've been 2-3M less. :) So yes, "cheat". That same trick will not work this time however, and will even give a worse result this year (but a slightly better Mars quarterly report...) but maybe they will stuff their channels again, to keep that magical growth.

Apple is still playing some trickery at some levels, but yes, I still use their reported numbers, as does Tomi, because every mobile company does it at some level. This year might get iPhone 6 owners to upgrade to the next iPhone in mass droves, but there is still very little to entice an Android premium user to switch, at this stage. :)

James Glu

Hi Per,

I wish someone besides Tim Cook were reporting the Android switcher rate which has been 2 to 1 in Apple's favor the last couple year...if you believe Tim Cook. I agree with you with respect to Android premium users not going over to the iPhone. Of course, I'm one who believe the two camps are mostly "their own markets" by this time.

But...there is some amount of Android users that switch to iPhone and it's been a large enough force that Cook has highlighted that story to the investor community. I would think that most of those switching are coming UP from cheap Android. How so? These are people that couldn't afford an iPhone and have had crappy phone after crappy phone. Not because Android is crappy, but because cheap phones are crappy phones.

So,when they can finally afford a decent phone, they buy an iPhone. We have had years of experience to know that once people buy an iPhone they keep buying iPhones from then on.

Meanwhile the used iPhone market remains robust. You cannot find "a deal" on a used iPhone.

As to the "adding a week to this or that quarter". Long is right. The iPhone business is a juggernaut...not some sham needing to play fast and loose with the numbers. 1.2 BILLION iPhones sold. Half of those in active use. Apple released a $399 iPhone and STILL the average selling price is growing. The iPhone ASP is just shy of 3x that of Android. The Christmas quarter sales are only about "how many can Apple make".

10 years in and STILL Apple can never make enough to satisfy demand for 3 or 4 months after releasing a new model.

Per "wertigon" Ekström

@Jim:

Oh come on, you have to atleast agree the last christmas quarter was very convenient for Apple, with that extra week, since it allowed them to tell the world the iPhone still grew YoY for christmas.

Be that whether it's a fluke, or careful planning on Cook's part, we can agree to disagree on. But it *was* rather convenient, since without that extra week of sales the Christmas quarter would've looked significantly worse... :)

As for the incentive of switching away, I think you might be in for a rude awakening pretty soon. That must-have feeling of iPhone is gone for many, and for every user iPhone lose, it will be more and more dire.

Once iPhone is no longer "trendy" and "cool" anymore, that's when we shall see what happens for real. :)

Abdul Muis

@jim

"I will acknowledge that the low cost "mid range, premium" Android phone sales in China are indeed eating Apple's market, that the values and taste of the Chinese have indeed changed."

No.
The value and taste of cina buyer hasn't change. What changed is the perspective if Chinese buyer that iPhone is not sexy anymore. iPhone is not status symbol anymore

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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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