Communities Dominate Brands

Mobile Disruption Case Study: Camera Industry. Lessons for all inside mobile disruption from advertising to banking to AR Augmented Realitydown

We just have news from Nikon the Japanese camera giant, sadly, shutting down a giant factory of 2,500 employees in China. That reminded me, that I could do an update to the first-ever case study of what happens to an industry when it is hit by the mobile revolution. It is a severe case of the 'digital' revolution which powers the internet and before it, the PC-related disruption. Mobile also combines obviously the effects of the parallel 'social media' revolution which only gained true power after social media discovered mobile (as chronicled on this 'Communities Dominate' blogsite).

But the camera industry is the first case study of an 'outside' industry being hit by the mobile revolution. We see today dozens of such industries facing similar issues as the camera industry did, from the oldest industries literally like money and payments, to pervasive industries such as media advertising and marketing, to human needs industries from healthcare to education, to various high tech areas including VR and AR (Virtual Reality and Augmented Reality). The relevant point is, that the camera industry faced mobile disruption among the very first (together with the music industry and the messaging industry) and the camera industry has gone 'furthest' into its demise, due to the disruption of mobile. This is why the camera industry is the 'best' case study for ANY other industry to monitor and study, to find possible effects to THEIR industry, and better prepare and deal with mobile disruption than the camera industry was able to. That is why I regularly do the Camera Industry case study in my various workshops around the world, and it is often requested by conference producers for me to include, in my public speaking. It is the proverbial 'canary in the coal mine'. What happens to Nikon now, could happen to Microsoft soon and someone like Citibank in a decade from now...

So lets do an update to one of my most popular items. The Golden Age of Photography....

GOLDEN AGE OF PHOTOGRAPHY

If we take the period from 2005 to 2015 as a ten-year period 'decade' then that is literally the golden age of photography, when the total planetary population of cameras grew 10-fold, and today six out of ten humans alive have access to a personally-owned camera - and take pictures (and often videos) with it. We all know those are not stand-alone Nikon or Canon or Olympus cameras, they are of course Samsung Galaxies, Apple iPhones, Huawei Honor smartphones, and even basic Nokia featurephones that can be 5 years old, but still usable and that have a camera. They are mobile phones, ie cameraphones. Nearly everybody who owns a stand-alone camera like a Nikon or Canon, will ALSO have a smartphone with a camera. And most who own a stand-alone camera, also use the camera now on their smartphone (at least for some random snaps) and for some who own premium stand-alone cameras, they have ABANDONED the use of the expensive camera setup and ONLY use the smartphone camera/s. For over 90% of all people who own a camera today, the ONLY camera/s they own are on mobile phones. Less than 10% of 'camera owners' today have any type of stand-alone camera like an Olympus, Canon, Panasonic or Nikon. And of those 10% less than half use their stand-alone camera as their primary camera anymore.

In the Golden Age of Photography, the planet's camera user population not only exploded, it became only the second technical gadget used by more than half of all humans alive (the first being the 'mobile phone' which includes also those phones from years ago, that didn't have cameras on them). And while 'voice calls' used to be the primary reason for getting a 'mobile PHONE' today voice calls are not even the most popular uses of a modern mobile, messaging is the most used function and the camera has now also passed voice calls, and the camera is used by more mobile owners than placing voice telephone calls, on a 'mobile phone'. Funny, isn't it?

When cameras came onto mobile phones - as mobile phones are always carried (we even sleep with them, as I've been teaching for more than a decade, the mobile phone is the first thing we see in the morning and the last thing we see when we go to sleep) - that revolutionized the USES of the camera. First off, the number of photographs taken exploded - because the camera was always with us. The original uses for most cameraphone users were similar photography situations as with traditional cameras - family meetings, birthdays, beautiful landmark photographs on vacations etc. Then came the selfie. Suddenly a new TYPE of photography emerged, partly because it is far easier to take a selfie with the camera FACING the screen, than on most digital stand-alone cameras, whose viewing screen faces away from the camera. Of course not all early cameraphones HAD a second selfie camera. It was one of the obvious shortcomings of the early iPhones for example. But recent studies have shown that many teen and young adult consumer cameraphone users take one selfie EVERY DAY. The emergence of the selfie stick speaks volumes of how global and massive this new photography sector had become. Nikon, Canon, Minolta, Konica, Olympus etc could not capitalize on the selfie phenomenon.

As Selfies are rather 'obvious' visually clear uses of cameraphones - you can spot a selfie shooter from literally a mile away, because of how he or she holds the camera, vs people who take a 'tradtional' picture using the same kind of cameraphone. You know, with the hand held out, and aiming the phone at yourself, with your back facing the particular landmark etc. The 'selfie pose' type of photography session. But selfies are only the START of the vast range of new types of photographs that people use their cameraphones for, that traditional stand-alone cameras were (usually) not used for. So lets take 'scanning'. The popular phenomenon of taking scans of receipts or documents or invoices or travel itineraries etc, and storing those 'scanned' images on the phone. We could of course use a 'flatbed scanner' to scan such documents but most consumers do not have flatbed scanners at home (or even at the office) and that is tedious later use of the tech, while the cameraphone is instantly available, in your pocket. Lets do that now.

A related use is to scan photographs. If your relative has old paper photographs, for which the negatives are long-lost, but they are pictures of you as a child, what do you do? You don't take the pictures to a photography services company to process into digital images. No. You take out your smartphone and place the paper pictures onto the kitchen table at your relative, and you make sure the light is good, and you snap copies of those photographs onto your own phone. Instant photo-replication. Instant digitalization of old photos. Then the old paper pictures can be thrown away! You already HAVE the digital image that you wanted to keep. Why bother with the old paper... Yes, this was technically possible with stand-alone cameras too, but VERY few truly mad photo nutters would have their digital cameras WITH THEM when that random relative found the old picture of you as a 2 year old with the great-grandma... But everybody has their smartphone in their pocket now.

This leads us to MEMORY ENHANCEMENT. Then come all the issues of taking pictures to help your memory. Not intended ever to be permanently stored and shown to relatives, but simply as a memory technique. Where did I park the car? What is the temporary arrangement of the bus parking when the bus station is under reconstruction? What do I need to buy from the store? A million uses of the camera because it is in our pocket always, to just help remember things. This is camera use that Nikon could never even become part of, but literally BILLIONS of people are doing daily.

Then it gets to the near future. Facial recognition like with the new iPhones. Augmented Reality AR like Pokemon Go. Various radical new uses of the camera function, that were not in any way viable 'photography mass market opportunities' for the traditional camera manufacturers like Canon, Nikon or Olympus.

That is what happened during the Golden Age of Photography and how massively the planetary photography hobby expanded not just in owners of cameras, but in photographs taken per camera, and then leading into whole new USES of the camera in ways traditional camera makers could not hope to even participate in.

WINNERS AND LOSERS

So then winners and losers. The camera industry giants (Nikon, Minolta, Canon and Konica the four biggest) in year 2001 were based in Japan. In year 2001 Nokia and Samsung didn't make ANY cameraphones. Apple didn't even make mobile PHONES in year 2001 (the first iPhone would not be released until six years later). Year 2001 saw the first introduction of the cameraphone, in Japan, by electronics giant Sharp, who already made mobile phones. The cameraphone was such a weird curiosity, that the two biggest Japanese mobile operators/carriers NTT DoCoMo and KDDI both said no to the idea, and only the smallest carrier, J-Phone (now Softbank) dared to explore this idea. With one model. That was ONLY 16 YEARS AGO. The world's first cameraphone. Only 16 years ago.

Then the revolution started rolling. Soon Nokia, then world's largest mobile phone maker, introduced cameraphones; and within a few years was doing N-Series super cameraphones. In under five years, Nokia had become the world's largest camera manufacturer. Under ten years from launching its first cameraphone, Nokia was selling more cameraphones than all stand-alone camera makers (Japan plus rest-of-world) combined. Samsung was already heavily into cameraphones well before Apple got into the act and today of the three most popular camera brands in use worldwide, Samsung is number 1, Nokia number 2 and Apple's iPhone is number 3. Nikon, the world's largest stand-alone camera maker doesn't fit INTO THE TOP 10 !!!

So while Nokia, Samsung and Apple disrupted the camera market and utterly up-ended it, what happened to the camera giants? This was the GOLDEN AGE of photography, when global camera user base EXPLODED to ten times its previous size. What happened to 'the giants'? Minolta? Quit the camera business. Konica? Quit the camera business. Kodak? Went bankrupt. Polaroid? Went bankrupt... twice. Correct that: now three times. The remaining giants saw their stand-alone camera markets shrink at catastrophic rates. Nikon just reported its results for last year. They saw a 24% drop in their total camera business. Nikon gave an even more dire projection of their next year to come. They expect 28% drop in their camera business now for the next year! And Nikon is the LARGEST of the remaining former giants, who control a massive 30% out of this collapsing stand-alone camera market. (Third percent of nothing is still nothing.)

LESSONS TO THE OTHER INDUSTRIES

So what do we learn from this? Some stand-alone camera makers of year 2001 like Sony WERE in the mobile phone handset business, and were able to participate in the market. Sony's smartphones were briefly even ranked third-largest global smartphone maker a few years ago. Sony has had its troubles, but at least they remained in the game, because they saw the future and participated in it. Minolta. Konica. Polaroid. Kodak. Their mighty camera-related businesses collapsed. Nikon and Canon were able to 'retreat' to the 'professional' segment that only prolonged the pain. Their downfall was only delayed. Now Nikon is firing 2,500 staff at their giant China factory because there is no way forward if last year your market fell 24% and this next year it falls another 28%.

Total newcomers who had NEVER MANUFACTURED A CAMERA, like Nokia or Huawei can come in and take most of the growth. Companies who had SOME camera background but did mobile phones like Samsung and Apple, could build a HUGE market capitalizing on this disruption. What is Apple's iPhone market today, could just as easily have been Canon or Nikon or Olympus, if they had had as forward-thinking an executive in charge as Steve Jobs was when he saw the Sony Walkman musicphones gobbling up the market for the iPod music players. Steve Jobs thought that if anybody is going to cannibalize his product's market, ie the iPod, then it better be another Apple product hence the iPhone. And while Apple was very reluctant to get 'serious' about cameras on the iPhones, they did include them and therefore Apple was in the game, while most traditional camera makers like Minolta, Nikon, Konica, Olympus etc were out of the cameraphone game. Look who is standing now? Same story goes with Samsung. Where is Philips? Where is Panasonic? Where are the other big home electronics brands? Sony made its play but most other home electronics giants utterly failed the cameraphone opportunity - even when most HAD done some types of cameras, at least via the VCR-era 'camcorder' video camera-videorecorder systems, which were digital by the end of that technology evolution path. Great global electronics giants failed their future, even as they HAD done mobile phones (like Philips and Panasonic) before. Samsung saw the future and took it.

I want to also mention GoPro. It is NOT that 'any digital camera' invention will succeed in this space. MOBILE always wins. We saw this with so much evidence that it is undeniable. iPod the music player lost to Sony Walkman music phones. Tom Tom GPS navigators lost to smartphones with GPS. And  yes, GoPro the brilliant niche camera geeky gear, lost out to .. cameras on smartphones. It is NOT ENOUGH to be digital. You have to be MOBILE. And by 'mobile' I do not mean portable (like GoPro) I mean 'cellular' mobile. Permanently connected omnipresent mobile ie cellular. 2G or 3G or 4G (or 5G) cellular. Look at Apple's iPad vs iPhone. Look at Apple's Apple Watch vs iPhone. Having WiFi or other wireless is IRRELEVANT. You HAVE to have 'mobile' tech which from practical technical definition means 'cellular'. Having WiFi is NOT ENOUGH (proof? Apple iPod Touch !!! vs iPhone. Which one is left standing? One was cheaper and had only WiFi)

Mobile is unstoppable. Now lets take the lessons to current races and some observations. Microsoft? They SAW the smartphone revolution and when Bill Gates was in charge, Microsoft pursued the smartphone market vigorously (while also ruthlessly as Bill Gates would like to do, abusing his monopolistic powers). You might not have noticed, but Microsoft's Windows smartphone OS was briefly the world's second-most-used OS behind Nokia's Symbian (but their share was only 12% so it wasn't exactly a 'dominant' position when Symbian was at 70%). Then came idiot Steve Ballmer and dickishly destroyed the Windows smartphone future by screwing his ecosystem and partners time and again. Windows smartphone OS just died a few weeks ago. Microsoft has been PLAYED OUT OF THE FUTURE OF MOBILE. They HAVE NO FUTURE. They are like Nikon. The only difference is, Bill Gates HAD SEEN the future and tried to pursue it. It was Steve Ballmer who destroyed Microsoft's path to mobile. Good job, moron!

Who won the operating system war? Not Apple. Did you see iPhone's market share? It peaked at 21% for one quarter five years ago, it is now down to around 14% and falling. Once the whole digital IT world was OWNED by Microsoft and Windows (in the PC era). Today, the future - this whole CENTURY - belongs to.. Google's Android. Microsoft's Windows reached at its peak well over 1 Billion users. Facebook reaches over 2 Billion users. But Google's Android? It reaches THREE BILLION human beings by the end of this year, 2017. Google has won the war of the century. And because Microsoft threw in the towel, they will become as relevant to the tech world as well, Olympus is to cameras today. Yes, you can find one in a specialist store, they still do technically exist. But they are irrelevant to the market of photography. Microsoft Windows will shrink to become a niche specialist IT platform used by some large legacy organizations, and Microsoft will live two decades of continuous decline of relevance to eventually disappear, eaten up by some healthy giant, not for their 'reach' but rather, to hire their skilled staff. (And good riddance too, when that happens)

But look at banks! What happens to money? I said from the start, that money will become mobile. Not plastic, not online e-cash. Not bitcoins. Money will be mobile. Mobile phones become our wallets (and our driver's licences and our passports etc). This is NOW accepted as probably true, as Americans (finally) got into mobile payments thanks in great part to Starbucks mobile wallet, and then - after an eternity, finally also Apple's mobile wallet. In China alone, the mobile payments annual turnover is 100 TIMES larger than the mobile wallet turnover in the USA. And China's economy is only slightly larger than the US. Japan's mobile payments are MASSIVELY bigger than the USA. Europe? More than HALF of all Europeans use mobile payments already! So if you thought mobile payments are 'hot' and 'new' you must have been reading the obsolete thoughts of American tech or banking writers. Go visit Turkey or Romania or Kenya or the Philippines or Estonia or Japan or Finland or South Korea or Norway or Somalia or Sweden or ....

In mobile payments, money, banking, we will have the 'Nikons' giant banking conglomerates who fail at capturing the mobile opportunity. We will have the 'Nokias' and Samsungs and Apples and Huaweis who come from the outside and succeed in 'mobile money' and will take a disproportionate share (and end up buying many of the dying dinosaurs). We will also have the hapless 'Microsofts' who TRY to get in, and fail totally. And we will have the struggling 'Sonys' who will have momentary glory but will find the new digital mobile world difficult to survive in. And who wins the race for the mobile wallet? That battle was already decided. It is Google's Android. Of course.

What about the 'Reality' industries? VR and AR? Virtual Reality and Augmented Reality? I was among the first 'Reality' experts to say AR will be big and VR will only be a niche. And I was THE first to be able to explain WHY it was so. Duh. It is because of mobile. VR like Oculus will never be a global platform, and now the various VR experts are increasingly starting to believe. But because AR can be consumed (with the CAMERA function of) smartphones - AR will be FAR FAR bigger - witness Pokemon Go.

So think about newsmedia, or advertising, or retail, or travel, or healthcare, or education; etc. Or government. Did you know the first passports are already available on mobile phones - done first in the UAE (which was also the first country to do mobile phone based driver's licences)? Yes. The future is here. And the key to being a viable business in the future, is mobile. And one VERY valuable lesson you can bring to your staff is the case study of the camera industry. How the big giants failed to capitalize on the Golden Age of Photography, and the Japanese giants gave their industry to players from South Korea, Finland, China and the USA. Don't let YOUR industry miss out on the mobile revolution. Learn from the lessons of the first case study of mobile disruption.

Early Carrier Support of Nokia HMD Android Smartphones - A crowd-sourced survey of 30 markets (updated list growing: 39 of 46 countries and 79 carriers)

We can publish the first global survey of Nokia HMD Android smartphone marketing support, by the carrier community. This is an informal, unscientific, incomplete survey but enough countries are covered to make a posting about the topic. We can already cover 30 countries with at least some data.

I posted numbers and analysis of the launch of HMD Nokia smartphones a week ago. That blog attracted a lot of comments about local marketing support in many countries, plus comments from a few where the carrier support was lagging. I asked readers to provide more info, and also asked my Twitter followers to join. I also did some digging of various online sources myself. And we now have what I believe is the world's first international survey of the CARRIER SUPPORT of Nokia's smartphone return attempts, via HMD. The results are a mixed bag but there is a lot of promise. I have split the known markets into three groups, first those where all carriers support Nokia brand. Then those where at least one but not all carriers offer the brand. And finally those where as of today, October 31, 2017, no carrier support is seen (but sales are available via other retailers like Amazon or other local retail outlets).

10 OUT OF 46 COUNTRIES WITH FULL CARRIER SUPPORT OF NOKIA SMARTPHONES
In Alphabetical Order

Bulgaria . . . . . . . All Carriers (3 of 3 carriers advertise Nokia, also demand is exceeding supply, source reader 'Vlad')
Czech Rep . . . . . All Carriers (O2, T-Mobile & Vodafone, source reader 'Slavek Cerny')
Finland . . . . . . . . All Carriers (DNA & Elisa advertising, sources reader 'Asko' & Elisa, Telia sells, source Telia website)
Hungary . . . . . . All Carriers (Telenor, Vodafone & T-Mobile are all advertising Nokia, source reader 'zlutor')
Netherlands . . . All Carriers (Nokia 8 is on all Dutch networks, also bus stop advertising, source reader 'Winter')
Russia . . . . . . . . All Carriers (TV ads on air, all carrier shops include Nokia smartphones, source Twitter follower Anton Namestnikov @Annamest)
Serbia . . . . . . . . All Carriers (MTS, VIP & Telenor each carry 2 of the 3 in some mix Nokia 3, 5 & 6; source Nokiamob)
Slovenia . . . . . . All Carriers (All carriers have at least 2 of the models 3, 5, 6, source Twitter follower kpkp @0kp0kp) 
South Africa . . . All Carriers (Vodacom & CellC 3 each, MTN one Nokia model, source Twitter follower 'Ntete Metseka' aka @GoSharpShooter)
Switzerland . . . All Carriers (all major carriers offering Nokia including among their 'brand list' feature, source reader 'Joe Fish')



29 OUT OF 46 COUNTRIES WITH PARTIAL CARRIER SUPPORT OF NOKIA SMARTPHONES
In Alphabetical Order

Australia . . . . . . 1 Carrier (Vodafone carries Nokia 3,5, 6. Source Vodafone)
Austria . . . . . . . . 1 Carrier (A1 advertising Nokia 6, source Twitter follower @Digitreo) 
Belgium . . . . . . . . 2 Carriers (Proximus advertises three models, Telenet one; but Proximus store out of all three but have 3310 in stock, source reader 'luvr')
Chile . . . . . . . . . . 3 Carriers (Entel, Movistar & Wom have Nokia, source reader 'Rino')
Colombia . . . . . . 1 Carrier (Movistar sells Nokia 3. Also retailers selling 5 & 6, source Twitter follower Hernan Ramirez @HernanRamirez)
Croatia . . . . . . . . 2 Carriers (Croatia Telecom & Tele2, + 3rd carrier VIP sells dumbphone 3310, plus largest retailer, sources reader 'robig' & Nokiamob)
Denmark . . . . . . 3 Carriers (Telenor, Yousee & Three sell Nokia, source reader 'Elo Petersen')
France . . . . . . . . 2 Carriers (Bouygues has 3, Orange 2, 5 & 8. (third carrier SFR only does 3310, fourth nothing), also TV ads on air for 8, sources readers 'Phil W' & 'Michel C')
Germany . . . . . . 2 Carriers (T-Mobile has 2 and O2 has 3 models, source reader 'Huber')
Hong Kong . . . . 1 Carrier (CSL plus 3 local retailers advertising Nokia 8, according to my observations)
India . . . . . . . . . 1 Carrier (Vodafone marketing 3, 4 & 6 says iGadgetWoman; plus manufacturing locally, source reader 'John A')
Indonesia . . . . . 1 Carrier (Indosat advertising Nokia 3 & 6, plus biggest local retailer source 'Abdul Muis' local manufacturing, source 'John A')
Ireland . . . . . . . . 2 Carriers (Three & Vodafone, source David Doherty aka @mHealthInsight on Twitter)
Italy . . . . . . . . . . 1 Carrier (TIM has Nokia 5, also one retail channel, sources Twitter follower Luciano Corinti aka @LucianoCorinti & HMD)
Malaysia . . . . . . 1 Carrier (Digi advertising Nokia 3 & 6, source reader 'Abdul Muis')
Mexico . . . . . . . 1 Carrier (Movistar is advertising Nokia 6, via reader 'Rigoberto Calleja') 
New Zealand . . 1 Carrier (Spark carries Nokia 3, 5, 6 & 8. Source Spark)
Nigeria . . . . . . . 1 Carrier (9mobile is advertising Nokia 8, via Twitter follower 'Mister Mobility' aka @moverick)
Norway . . . . . . . 2 Carriers (Telenor & Telia sell Nokia, these 2 carriers (out of 3) control 73% of Norwegian market, sources readers 'Ola' & 'Knut Yrvin')
Pakistan . . . . . . 1 Carrier (Jazz offers Nokia 5 & 6, source Jazz; TV ads on air for Nokia smartphones, source Twitter follower Harry Jarn @h_jarn) 
Poland . . . . . . . 3 Carriers (3 out of 4 carriers selling Nokia, heavily advertised. Source reader 'Mike')
Portugal . . . . . . 2 Carriers (NOS & Vodafone have Nokia 3, 5 & 8 models, source reader 'Pedro')
Romania . . . . . . 3 Carriers (Vodafone, Orange & Telekom each carry Nokia, sources Vodafone & reader 'Romania')
Spain . . . . . . . . 3 Carriers (3 of 4 carriers are advertising Nokia 3, source reader 'Luis Calvo')
Sweden . . . . . . . 2 Carriers (Telia and Telenor selling Nokia, also Elgiganten the largest retailer has it plus other retailers source reader 'John A')
Taiwan . . . . . . . 1 Carrier (Far EasTone Telecom, source reader 'zmx')
Turkey . . . . . . . 1 Carrier (Vodafone running ads for Nokia, source reader 'John A')
UAE . . . . . . . . . 1 Carrier (Etisalat has 3 Nokia models, source reader 'Abdul Muis')
UK . . . . . . . . . . 3 Carriers (EE, Virgin & Vodafone sell, also largest retailer Carphone Warehouse, sources reader 'Mart' and Android Authority)

7 OUT OF 46 COUNTRIES WITH NO CARRIER SUPPORT YET
Argentina . . . . No Carriers (no carriers yet, by my survey of websites of major Argentinian carriers)
Brazil . . . . . . . . No Carriers (no carriers yet, source reader 'Joe Fish')
Canada . . . . . . No Carriers (no carriers, avail on Amazon, source reader 'Wayne Borean')
China . . . . . . . . No Carriers (several retail channels, sources HMD & reader 'John A')
Nepal . . . . . . . . No Carriers (but several independent retailers selling Nokia locally, source Twitter follower Aatish Neupane @aatishnn)
Thailand . . . . . . No Carriers (no carriers, retailer Jaymart sells it, by my observation)
USA . . . . . . . . . No Carriers (no carriers, several retail channels, sources readers 'Jim Glue' and 'John A')


ABOVE listing is crowd-sourced by readers of CDB blog and my Twitter followers. This listing MAY BE freely shared in any media and in any way you want, without any further permissions from me or this blog. Please indicate the DATE you saw the data, as this listing will likely grow over time, with more input from readers and Twitter followers, so your listing has a 'time stamp' on it if you publish it. I'd appreciate a link to this blog if you publish to an online source.In


In total, currently (as of 31 Oct)  79 carriers support Nokia HMD relaunch by at least selling at least one Nokia branded smartphone handset. Others in the list go much further, selling multiple handsets, marketing them prominently on their website front page or the top of their smartphone page; and some have done actual paid advertising already to support Nokia smartphone sales the most aggressive have done TV advertising.

The geographic footprint of HMD's effort (39 of 46 countries as of 31 Oct) now spans all 6 inhabited continents by geographic regions (when Mexico is counted as part of the 'North American' geographic continent) but by more common convention, Mexico is counted as part of the cultural region of 'Latin America' and by that method, HMD is in five geographic 'continental' regions out of six. By the more handset-relevant measure of the 8 common regions often measured, that separates some areas like Eastern Europe and the Middle East, out of Europe and Africa/Asia (but some will lump Middle East WITH Africa); and possibly also separates China and Emerging Asia from rich Asia but often then adds Oceania (Australia, New Zealand, New Caledonia etc to 'Industrialized APAC') - if we go by the 8 regions I track in my Almanac and Phone Book series, then HMD has now reach into 7 of the 8 regions with only the USA-Canada North America part missing (as I count Mexico into LatAm). But my 'Emerging Asia' includes the single largest market China, which now some analysts separate out of the Emerging Asia part. If you count that way (eg 9 regions) then HMD has so far reached 7 of 9 regions.


This is clearly a crowd-sourced listing. I warmly welcome any additions corrections and further info that anyone can offer. Please feel free to post into comments and I will update the listing, or you can send me info via Twitter where I am @tomiahonen or my email which is tomi at tomiahonen dot com. I will be most happy to include your name as a contributor to this listing.

So far my thoughts of the sampling, 39 of 46 countries sampled have at least one carrier. And in 10 of 46 countries, all carriers already support Nokia smartphone sales. Considering that HMD only started (outside of China) in June this is a VERY solid start. Several of the world's largest handset markets have carrier support already including India, Indonesia, Nigeria, Mexico, Turkey and Germany. Yes, this is a good start. Go get them HMD, good luck! Lykkyä tykö!

(This blog was originally posted on 24 October. I closed the updating of this blog effective end of October 31, 2017 so that we will have a 'time stamp' after reasonable time to get reader contributions (one week). I will take more comments yes, but I will no longer update the listing, so that this becomes our first benchmark. I will start a new blog that collects more countries and carriers, for the month of November.)

Smartphone Migration Rate is now at 81.5% and Replacement Rate at 21 Months

We have a few of the less frequently-reported numbers that just came in. Gartner gives us their count of this year (2017) migration rate of all phones to smartphones in new sales. They count this year 2017 to hit 80% migration rate and next year 2018 they see migration reaching 86%. 

That is a good data point to have. It means that roughly speaking in exact middle of 2017 the global new sales migration rate was at 80% this year (end of June) and will be roughly same point next year, 86%. That also means, that the migration currently is shifting about 1.5 percentage points per quarter (one half of one percent per month) and thus, by end of December 2017, the current new phone sales migration rate to smartphones will be at about 83% and right now (mid October, with quarter just ended September) we are at pretty exactly 81.5% migration of new sales of mobile phones to smartphones, globally.

By the way, this is almost exactly what I've been reporting on this blog. My latest comment said we'll end this year with 'just over 80%' migration rate. Nice to see big analyst houses finding the same type of numbers.

Now, if you plotted a straight line migration adding one half of one percent per month and this 6 points of migration ever year, to the 86% of mid 2018, you get 92% mid 2019, 98% mid 2020; and we arrive at 99.5% migration rate this time (end of September) at near the end of year 2020... So the current data does suggest that I might end up having been right on my timing of my 'migration completed' forecast haha, but that probably won't end up so soon. The typical diffusion curve is not in the shape of a straight line, it is rather an S-shaped curve, and the final migration rates should slow down, meaning we would push the 99% level into year 2021 or even 2022. Prepare yourself for that rather than counting on end of year 2020 being the moment we've been all waiting for, haha.

Also please remember new sales is not installed base. This is the only blog in the world that gives a quarterly count of the global installed base. That number lags about 2 full cycles of the replacement cycle or about 3.5 years vs new sales. So the rough time estimate of when all phones IN USE are smartphones (globally) that is about middle of 2020 decade, say very roughly year 2025.

Hey, talking about the replacement cycle? That is a number we quite rarely see from any sources. We have a recent update and it is via Counterpoint. They note that the replacement cycle has picked up again (getting shorter, after it had been growing longer for the recent past). A few days ago Counterpoint released news that they measure the replacement cycle now at 21 months, down from 24 months. That suggests a nice heating-up of the handset market for the next approx 12-18 month period.. We'll keep tracking the facts and reporting them for you here. And if you want all the latest mobile stats in one place, get the TomiAhonen Almanac now.

Seeing First Nokia Smartphone HMD Numbers - What does this all mean? A first stab at the big picture for Nokia return to smartphones (Updated 3x)

There are some HMD Nokia numbers and we can attempt some analysis. We have a very active and loyal readership at this blog (thank you to all) and one of the beauties of the comments section, is that you can learn a lot just from reading the comments - I certainly do. And now in the past few days, there were several sudden early numbers that came relating to HMD's performance with the Nokia brand, particularly around smartphones (where our interest lies, not so much the featurephone ie dumbphone side). Lets first take just the data points, vague as they mostly are, and see what we have.


UPDATES 18, 19 & 24 October 2017 (see bottom, we have a preliminary sampling of some countries where Nokia Android phones are marketed, courtesy of comments via readers to this blog)


First off, we have a quoted but vague number via HMD's Pekka Rantala, who gave an interview at the Italian Nokioteca. It starts in Italian, but switches to English. If you want to go to the point where Pekka talks about the sales numbers (that is in English) it starts at 07:45. Pekka said on Sept 2, 2017, that for phones that started to sell in June and covering the first four smartphone models, HMD/Nokia has sold 'millions' of smartphones and for dumbphones (5 models) they had sold 'tens of millions'. Pekka said several times that demand is exceeding supply. Also Pekka explained that the initial strategy has smartphones sold in only a few distribution outlets per country (like one chain of stores in Italy) and this was done for the reason of attempting to keep phones available in the few distributors, rather than putting effort into securing a wide distribution (where then most resellers would have nothing to sell). Pekka further explained that the marketing has not been yet using paid marketing because the initial demand is so strong, but a paid advertising campaign for the Nokia 8 flagship would be coming to major markets for the Christmas season including Italy. Very intersting interview, I recommend you watch it. And thank you to our regular blog reader 'Winter' for finding the interview.

So Pekka Rantala Chief Marketing Officer of HMD said Nokia smartphones had already sold millions by the start of September. And we know its not into the 'tens' of millions, because he mentioned that number, as the scale of the featurephone side, like the 3310. This gives us a scale of cumulative sales June to August, 3 months, of over 2.0 million and under 9.9 million.

Second we have also via link found by our reader Winter, that measured the scale. It is an indirect measure, but most who would buy a Nokia branded Android smarthphone, would then go and get the Android app from HMD for that smartphone. Nokia Power User website had reported on the statistics for the HMD Nokia Android app, and that as of October 8, 2017, those were in the scale band of between 1 million and 5 million downloads. Certainly there are at least 1 million HMD Nokia Android smartphones that are not just sold and in use, but have been activated on the Google Play Store for Android apps. Note that not all who buy a smartphone will download apps to it, and as the article points out, and our blog reader 'Phil W' also reiterates to our readers, those Play Store numbers do not include China which is where HMD started its sales, where the Nokia 6 went first on sale. So the 'upside' for the cumulative sales could be above 5 million. I'll do my math in a moment but lets take the third number before that.

Finally we have an analyst house, giving their count. This is perhaps the 'best number' and it is certainly the most precise. IDC is one of the big analyst houses that report every quarter on the smartphone market, and one of the 'best' that we have used on this blog in our average of leading analyst houses, when we arrive at the quarterly total market size number. IDC has given their number to the Finnish newspaper Ilta-Sanomat, on 11 October, 2017. This story was picked up by our blog reader 'Paul'. IDC reports that the Nokia brand is already ranked number 5 in Finland, number 11 across Europe and has 0.4% global market share. As of the first half of 2017 (ie ending June) IDC had counted total cumulative HMD Nokia smartphone sales at 1.5 million. This is all in a Finnish-language article interviewnig IDC's Research Director Francisco Jeronimo.

So we have scales of numbers, one says 2M to 9.9M cumulatively up to end of August, on global level. Another says 1M to 4.9M cumulatively to early October, but ignoring China sales. And a third says 1.5M cumulatively up to end of June with 0.4% global market share. Let's try to make some sense out of these numbers, are they telling a consistent story?

What is currently missing from that, which can help give us guidance? First market size. What does 0.4% global market share mean? IDC has not reported the Q3 numbers (July-Sept) so the 0.4% global market share is very likely the measured number for Q2 (April-June). And IDC counted the total market to be 341.6 million smartphones sold globally in the quarter. 0.4% would be sales of 1.4 million in Q2 and allowing for 0.1M sold in just China in Q1. That sounds reasonable.

Now what is the China market size? The TomiAhonen Phone Book tells us total handset sales in China last year was 412 million so about 22% of all mobile phones sold, are sold in China. As China is somewhat near middle in terms of global smartphone migration rate, we can use that percent also for the smaller smartphone market size, as a rough rule of thumb. Meanwhile as HMD is pursuing a global footprint, that would give a reasonable number as the percentage we might see China smartphones as a percent of all HMD Nokia smartphones sold (before we have any better regional data). So to adjust the scale of the Nokia Power User numbers, when China is factored in, the actual 'activated Android Nokia phones' cumulatively by early October would be between 1.3 million and 6.4 million. I would warn that not all who buy a new phone will download an app to it, but among the most eager Nokia buyers, that ratio is likely to be significantly lower than normal. Lets give it a factor of 1 in 5 doesn't download apps at all, and add that missing 20% to the shipments of HMD Nokia Android smartphones to the above. We arrive at 1.6 million low end and 8.0 million high end for the Nokia Power User measured indirect number, and what it suggests.

Can we fit this onto any sort of reasonable graph? Here we have serious issues of just 'gut' guesstimates. Will the Nokia sales have a one-time huge surge, those who missed Nokia rushes to the stores, bought the first devices, and then never returned? That was somewhat the pattern with Lumia, which had severe disappointments and the sales patterns in following periods never matched the early excitement. How satisfied are the buyers with their first Android based HMD Nokia smartphones? We don't have stories of 101 faults or exploding phones with antennagates or broken screens. But it is early going. If this was the pattern, we could have 1.4 million sales in Q2, and then say 1.2 million sales in Q3 and 0.8 million by Q4. Another rival theory is, that the sales are solid, and are constrained by retail availability (demand exceeding supply). Certainly this is what Pekka Rantala talked about in his interview. In that case, if HMD sold 1.4 million in one month (June) then you could multiply that number by three for the next quarter (Q3, July to September) and get 4.2 million quarterly sales. A good sign is that HMD is expanding its product line, releasing two new Android phones for Christmas (Nokia 9 and Nokia 2). And that their overall phone business seems to be on very solid ground with 5 dumbphones selling in 'tens of millions' cumulatively, and for example the 3310 classic model now upgraded to include 3G so it can be sold in some of the more advanced markets where 2G networks have been shut down or are being shut down.

Now its a gut check time. What can I tell you? I do think that there is genuine growth happening. The data is consistent with this type of pattern:

FIRST ROUGH ESTIMATE OF HMD NOKIA QUARTERLY ANDROID SMARTPHONE SALES
Q1 (China only) sales . . . . . . . . . . . . . . . . . . . . . . . 0.1 million (IDC, calculated)
Q2 (June only) world launch . . . . . . . . . . . . . . . . . . 1.4 million (IDC, calculated)
Q3 (world 3 months) about . . . . . . . . . . . . . . . . . . . 2.5 million (TomiAhonen Consulting estimate)
Q4 (2 new models added, Christmas Qtr) about . . 3.5 million (TomiAhonen Consulting, preliminary forecast)

Source: TomiAhonen Consulting estimates and preliminary forecast based on IDC, Nokia Power User data, and HMD statement, 13 October 2017
This table may be freely shared


That would mean that 'today' mid October in real calendar time but say end of September end of Q3 in unit measurement time we'd have a cumulative Nokia Android sales level of 4.0 million HMD smartphones sold so far. It would be totally consistent with Pekka Rantala saying 'we sold millions' by September and not 'tens of millions' (yet). It is totally consistent with Nokia Power User measuring between 1 million and 5 million activated Nokia Android devices downloading at Play Store, which suggests global base of Nokia HMD smartphones in use of between 1.6 million and 8.0 million. 

Another way to look at it, is just to take the mid-points of the more vague measurements. The HMD CMO number between 'millions' (2.0m) and under 'tens of millions' (9.9m) is 5.95 million. Meanwhile the number via Nokia Power User measurement of between 1.6 million and 8.0 million gives an average of 4.8 million. If we average those two averages, we'd arrive at 5.4 million cumulative shipments so far. My number is therefore perhaps slighly conservative, being 26% below those strict averages.

A third way is to take the IDC number for one month, and simply multiply it for 3 months to get the Q3 number estimate. That would be 4.2 million (per quarter, not cumulatively). That would mean cumulative number of 5.7 million by now.

I want to strongly caution about these numbers, I am taking the view that Nokia HMD sales are GROWING from the initial excitement of the re-launch of the Nokia brand. It is by no means a guarantee that this is going on. Hopefully we will find more data points to see if this is in fact happening. But I am confident to give my best guess, that the current sales level of HMD Nokia is about 2.5 million units per quarter (Q3) and looking solid for roughly 3.5 million global quarterly sales for Q4 Christmas period. That means that as of today (end of September) the cumulative Nokia HMD sales would be about 4.0 million so far.

One last point, also brought out by readers to this blog. The key to HMD's success is not how good the phones are. This market is wholly dependent on how good the carrier support will be. And that remains to be seen, but the first sign is out, that HMD seems to be doing well on that front. Our blog's long-time loyal reader 'Asko' reported on October 6 that he had seen the first carrier-advertising for HMD's Nokia. It was in Finland, no surprise that it would start there. But carrier support is the VITAL piece if HMD is ever to re-enter the Top 10 or if it would be only a curiosity forgotten old brand like say Palm or Alcatel or Motorola selling in tiny numbers. The carrier support is absolutely critical. And the first sign is seen, in one country, one carrier, has started to advertise Nokia HMD smartphones. Yes, this is Finland, but inevitably, Finland, as the birthplace of the Nokia brand - was always going to be the first country where this happened, anyway. And it has now happened. We need to monitor this space and see, does HMD win more carriers to start to promote the brand. Only then can the real return happen.


UPDATES 18, 19 & 24 October 2017: Several of our readers have submitted comments that discuss countries where the marketing has started. I am now adding (on 18 October) an early preliminary sampling of countries that have thus been 'reported' to already have HMD Nokia Android phone advertising and what other data we have of those countries. I am posting in chronological order by countries that were discussed by people commenting. As of 24 Oct we have 25 countries reported:

China (one retail channel, source HMD)
Italy (one retail channel. advertising of Nokia 8 coming for Christmas, source HMD)
Finland (advertising by 1 of 3 carriers, source reader 'Asko'; also market share of HMD Nokia in Finland currently ranked 5th, source IDC)
Hong Kong (1 carrier CSL plus 3 local retailers advertising Nokia 8, according to my observations)
India (1 carrier Vodafone marketing 3, 4 & 6 says iGadgetWoman; plus manufacturing locally, source reader 'John A')
Indonesia (biggest retailer and 1 carrier Indosat advertising Nokia 3 & 6, source reader 'Abdul Muis' with local manufacturing, source reader 'John A')
Turkey (1 carrier, Vodafone, running ads for Nokia, source reader 'John A')
Sweden (2 of 4 carriers Telia and Telenor selling Nokia source reader 'John A')
Poland (3 out of 4 carriers selling Nokia, heavily advertised. Source reader 'Mike')
Netherlands (Nokia 8 is on Dutch networks, source reader 'Winter')
Spain (3 of 4 carriers are advertising Nokia 3, source reader 'Luis Calvo')
Hungary (3 carriers Telenor, Vodafone & T-Mobile are all advertising Nokia, source reader 'zlutor')
Switzerland (all major carriers offering Nokia including among their 'brand list' feature, source reader 'Joe Fish')
Malaysia (1 carrier Digi advertising Nokia 3 & 6, source reader 'Abdul Muis')
UAE (1 carrier Etisalat has 3 Nokia models, source reader 'Abdul Muis')
Portugal (2 of 3 carriers NOS & Vodafone have Nokia 3, 5 & 8 models, source reader 'Pedro')
Bulgaria (3 of 3 carriers advertise Nokia, also demand is exceeding supply, source reader 'Vlad')
Germany (2 carriers offer some Nokias: T-Mobile has 2 and O2 has 3 models, source reader 'Huber')
Nigeria (1 carrier 9mobile is advertising Nokia 8, via Twitter follower 'Mister Mobility' aka @moverick)
Mexico (1 carrier Movistar is advertising Nokia 6, via reader 'Rigoberto Calleja') 

NOTE - other countries mentioned in various press releases and articles. I have so far found UK, New Zealand, Australia, Croatia, Serbia.
 

THIS LISTING MAY BE FREELY SHARED; Please indicate 'data crowd-sources via readers of Communities Dominate blog' if you post the listing.

I need to point out that the USA is a good example of where Nokia has not yet managed to get any carrier support. Reader 'Jim Glue' provides info that only Amazon sells the Nokia 6 in the US.

My deepest thanks to the readers who contributed these insights! I hope to add more to the list if we get more such data. But at least 12 countries have a Nokia HMD retail presence and some level of support advertising or marketing including some very big countries overall (China, India, Indonesia) and major Nokia strongholds in Europe like Italy, Turkey, Spain and Poland. Plus the obligatory Finland and Sweden haha..

One last note. Reader 'Paul' noticed the print edition of Finnish tech mag 'Mikrobitti' which compared smartphones in the 300 Euro price bracket and the Finnish mag selected the Nokia 5 as better than the iPhone SE. Yes its from Finland, probably home bias but still.. shows considerable promise for the return if some are willing to go to print calling Nokia better than Apple's iPhone....

For context. Some may look at 80 million Samsung smartphones sold every quarter and say this is peanuts. I would remind them about the only other comparable recent entry into the smartphone races that turned to be a success. A tech company named Apple launched itself into the handset market in 2007. It set as its public target to sell 10 million iPhones in the first year. Now lets ignore the China numbers for Q1, and count four quarters from Q2 of this year by my rough early estimate. Let's say Q1 of next year will be 'down' as the after-Christmas quarters mostly are, and HMD 'only' sell 3.0M in the January-March Quarter of 2018. Then for the equivalent first year sales somewhat apples-to-apples, HMD/Nokia would have done 10.5 million sales in its first full year and do roughly as good as Apple in its first year. Do not misjudge these early numbers. As long as HMD continues in GROWING from this start, then this is a VERY strong start indeed. 1.4 million sold in one month at the end of Q2? Yeah, 2.5 million they'll definitely then do in Q3, probably more. And if HMD/Nokia can sell 2.5 million Android smartphones in Q3, when they add 2 new smartphones for Christmas, 3.5 million is a reasonable early estimate for Q4 Christmas sales as well.

I think these numbers have considerable upside potential, and very little downside below my conservative estimate. But we will monitor more info as it comes in, hopefully more measured results to give us a sense, of whether these numbers hold (is there continued growth), do carriers buy into the Nokia comeback story and start to promote HMD/Nokia smartphones - and will the Christmas sales period bring joy and presents in the land of Santa Claus. 

My very best to HMD, this blog is in your corner. If you dare to reveal any more numbers, please do so!!! Tsemppiä!

Noted in Passing: Microsoft Smartphone OS Platform Passed Away

So it comes as no surprise to readers of this blog. But it's now official. Microsoft has announced that it has stopped the development of the smartphone OS platform that once was known as Windows Mobile, at another time Windows Phone and most recently Windows 10 Mobile. The existing product is not yet ended but all development has ended. You say tomato, I say potato. Same difference. Windows on smartphones is dead. Good riddance too!

Very briefly, I was chronicling the rise of Windows onto smartphones and chaired the world's first smartphone conference. I kept tabs on the role of Windows which briefly was the world's second-bestselling smartphone OS a decade ago. I warned of the mistakes Microsoft was making that started the death-spiral - very importantly from Windows Mobile to Windows Phone, the bizarre arrogant decision by Steve Ballmer to not have a migration path to Windows Phone OS (this was still before the Nokia related end to the platform). I was proven right and Windows lost half its share and fell to fifth ranking in smartphone OS wars just as the 'Bloodbath' was heating up (which we followed intensely on this blog).

Then came the end. The unholy alliance of Nokia and Windows, orchestrated by the worst CEO in corporate history, Stephen Elop (aka E-Flop as he's often called in Finland). Nokia's inept CEO messed up what chances the partnership would have had. I predicted that Nokia sales would collapse (as they did) and Nokia's handset unit which had never one in Nokia's history produced a loss - would start to produce losses (which it did) and that Nokia would never return to profits in smartphones (which it didn't) and that Nokia would have to sell its handset business (as it did) and that would be to Microsoft (as it occurred). Not bad predicting, eh.

And a few months after the Nokia deal, Steve Ballmer then put the final nail into the coffin of Windows smartphone hopes - when Microsoft purchased Skype. Once again, as with the previous forecasts, when I explained why Skype was the death-nail to the smartphone OS platform, numerous readers came and loudly protested in the comments, claiming I was a fool. Yet in a matter of weeks, all other major Windows Phone handset makers instantly quit the platform (like SonyEricsson, LG, Motorola, Dell) or dramatically cut down the Windows Phone product portfolio (like Samsung and HTC) and Windows share collapsed from 5% the year before to half that by the time the first Nokia branded phones started to ship on the platform. It was not the Nokia deal that killed Windows, it was Ballmer's purchase of Skype - as I explained and as turned out to be true. The carrier community put Windows smartphones into a sales boycott and Microsoft never recovered. This all happened before Nokia started selling Lumia phones on Windows, but later, when Nokia CEO was asked about a sales boycott, he admitted one existed and that it was hurting all Windows phone makers, including the then-brand-new Nokia Lumia sales. Various other Nokia and Microsoft execs admitted the boycott or in some synonyms like 'carrier reluctance' to sell the Windows OS phones (not just Nokia Lumia but from other Windows vendors too that remained, like Samsung and HTC).

Nokia Lumia edition 1 failed as I predicted. It was replaced by edition 2 on a new version of Windows Phone OS which failed, as I predicted, and then the third edition failed, by which time Elop was demoted and Nokia sold the whole handset business to Microsoft, tossing Elop in the package back to his former employer too. I predicted that Nokia would recover with the telecoms infrastructure business which is at Nokia's core telecoms competence (as it did). I predicted that the ex-Nokia handset business would continue to be a failure at Microsoft, exactly as it did fail too.

Of the Nokia handset business sale to Microsoft, again, I made a series of predictions, that now every single one of my predictions came true. I said that the first recourse at Microsoft to the failing handset business would to fire the incompetent Elop from running the handset business (as it did). I said Microsoft would give their handset unit to another exec to run (which it did) and that exec would have two years until the business unit would be shut (as it happened). I even postulated a fantasy 'Hollywood ending' scenario by which Nokia's handset business would be sold back to Nokia, after it had failed at Microsoft. While that technically did not 'exactly' happen, gosh, it is close, considering how the sale happened to HMD. I then said that the OS platform itself, was obviously doomed because HMD aka 'New Nokia' would release Android phones, not Windows phones - as it happened - and now we see the end of Windows smartphone OS itself. Incidentally about the timing? I said Windows OS at Microsoft had a rough life span as a doomed 'dead man walking' division of never producing profits, of about two cycles of two years ie four years. Look at the calendar? Its autumn 2017. Four years on the dot.

There is nobody else in the industry who gave all this in predictions before they happened. And nobody else who explained each of these events WHEN they happened (no migration path Windows Mobile to Windows Phone, Skype Purchase, Nokia Partnership, Nokia Purchase, ex-Nokia Sale to HMD) and how that would impact Windows smartphone OS platform. Every single step in Windows fall was predicted correctly here on this blog and nobody else saw all that happening. This is now the final part. Yeah. It makes me happy to see Microsoft suffer, I hated Microsoft long before they got involved with Nokia. But regardless of my feelings about the company, the actual events - every single one I predicted, came true, and nothing I ever predicted did NOT come true. I even pointed out the silly forecasts of famous industry analysts who promised Windows would be bigger than the iPhone today in 2017 haha and have something above 20% market share of smartphones today. I was here,  when it happened, and told you exactly what would happen. As it all happened.

Oh. One more bit. I was the first to also tell you that Google won the battle of the century for the OS of all high tech - when Android was passing Windows (all devices, not just smartphones, but PCs included). Nobody else told you that either. It is now becoming apparent to many experts that Google owns the tech world via Android. Who told you first? The dude who saw how Windows was truly collapsing and that iOS was never a threat to Google's world domination plans. Yeah, we'll return to those issues in coming years no doubt. Goodbye Windows smartphones and by darn it, good riddance too! Ballmer gone. Elop gone. Lumia gone. Windows smartphone OS gone. Now when can we see Microsoft the company gone too, please, next?