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When No means No? What part of No do Nokia and Microsoft not understand? US Consumers Reject Lumia at 96% Rate says Latest Survey (Corrected)

There is an alternate fantasy world, that Nokia CEO Stephen Elop and Microsoft CEO Steve Ballmer push to unsuspecting reporters. It is bolstered by fabricated numbers, bizarre anomalies and continuously unsubstantiated claims of big surges and market recoveries 'just around the corner'.

...And then there is reality.

The strongest reality of how Microsoft's Windows Phone OS, including WP8, and the related Nokia Lumia series of smartphones can do in the future - is consumer 'intent to buy' surveys reflecting both loyalty and interest. Here the story is brutal and consistent. We heard from intent-to-buy surveys in Europe in late 2011 that Lumia was not going to sell more than 2% in early European launches - almost exactly what it ended up doing. Then we heard from Chinese surveys of intent-to-buy that Nokia share was collapsing in 2011 and it did. And so forth. That was early. What about after the consumers got to play with the Lumia and new Windows Phone 7.5? Then we had the Yankee Group survey of Lumia owners in the USA, and the Bernstein survey of US and UK smartphone owners. Again. Brutal. Four out of ten Lumia owners rated it the worst phone possible. Two out of three Windows Phone current owners will never buy another again! This is absolute concrete evidence that this Microsoft-based system cannot thrive. If actual independent surveys of consumer opinions who own the devices are this dismal.

And on those 'but they get the best ratings on Amazon' bullshit peddled by Microsoft and Nokia defenders. Haha, no. We KNOW now how that was done, it was the Dirty Tricks department of Microsoft, now also used by Nokia, and their trolls, who rushed to spam all review sites with masses of unsubstantiated glowing reviews by supposed new owners - at ridiculous review rates at the launch of new phones - and by reviewers with no history of other reviews. They were plants, they were paid for, they were Microsoft smoke-and-mirrors squad who were behind those fake news. No, the independent reviews of actual Windows Phone users overall, and of actual Lumia users at the Nokia side - have been consistently horrid. Consumers hate the smartphone at unprecedented levels. Yes, there is the occasional customer who loves it, but most hate it, which is why retail sales pricing collapses weeks after new launches, and why resale values of Lumia series are in the toilet, and Nokia Lumia return rates are the highest recorded in Nokia history.

 

The Windows propaganda machine says 'but the newest release will fix all that'. We've heard it time and again. So once again, Nokia Lumia first edition, on Windows Phone 7.5 (and its dead-end migration path to WP 7.8) was a failure, yes. But this will 'all be forgotten' and 'all will be well' on Windows Phone 8, that just launched. Look at all the glowing reviews and how great it is. Fool me once, shame on you. Fool me twice, shame on me. We've heard this story so many times, we have to have learned by now. So, Tomi, do you have 'proof' that Windows Phone - version 8 - is a market failure then?

LATEST MKM CONSUMER SURVEY 

Yes we do. MKM has JUST released a consumer survey that discusses very specifically Windows Phone version 8. The survey was part of their consumer survey of mobile phone brands in the USA, covering 1,500 US consumers (and before you bitch about the number - that is a large consumer survey, statistically relevant, usually consumer surveys of more than 1,000 respondents is considered very reliable - if you don't know why, go take a basics 101 course in marketing research and statistics).

MKM found that US consumers love their iPhones and Androids, and intend to buy more Samsungs, Apples - predictable stuff. But lets drill down and see what MKM found out about Windows Phone and Nokia. Remember the movie Glengarry Glenn Ross? The one with Al Pacino as the ace salesman who sells worthless land in Florida, the movie with Jack Lemmon, Alan Arkin and Ed Harris among the other sales guys, and Alec Baldwin delivers one of the most memorable monologues in cinema history - "You see this watch? this watch costs more than your car." and "This month's sales contest first prize is a Cadillac. Wanna see second prize? A set of stake knives. Third prize is you're fired." (there were four salesguys so two would be fired by the end of the month) And the classic "ABC, Always Be Closing. Always. Be closing..." (perhaps the greatest movie about sales ever, written by Mamet)

 

Anyway, Alec Baldwin discusses the two golden rules of sales, ABC and AIDA. ABC we saw, AIDA is Attention, Interest, Decision and Action. As Alec says "Attention. Do I have your attention, I know I do, because its fuck or walk. You close or you hit the bricks." (translation: you sell or you are fired). And so forth, I love that movie. Anyway, do American consumers pay attention to Windows Phone and Nokia? The survey said that 6.4% of smartphone owners ie 3.2% of all respondents had a Windows based smartphone, and 1.6% of all phone owners (3.2% of smartphone owners) had a Nokia branded handset. You would therefore expect that the awareness of Nokia's newest version of its OS would be known at something like those levels, and same is true overall of Microsoft and Windows. Attention. Do I have your intention? The survey found that 19% of respondents (ie 38% of smartphone owners) knew that Nokia has its new OS now as Windows Phone version 8.

Bearing in mind that half of respondents do not own smartphones, and of those who do, the loyalty with iPhone and Android is very strong, this 19% of all US consumers, 38% of smartphone owners is a VERY strong number for Attention. It is incredibly strong, considering how poorly Nokia is used by US phone owners - only 1.6% of all respondents actually own a Nokia phone. Attention? Do I have your attention? Yes, Nokia launched Lumia - as CEO Elop promised - with the world's largest phone launch budget of all time, by a wide margin - over 3 times more money thrown at Lumia than the previous biggest launch ever. And that was then added to, by Microsoft's biggest-ever marketing support of its smartphone marketing, and that, added to by the carriers often doing their biggest launches ever. In the USA specifically, AT&T said its Lumia launch support was also its biggest phone marketing push of all time.

So 1.7% of US consumers own a Nokia phone, and only 3.2% of US consumers had any Windows Phone branded smartphone by any manufacturer, but a massive 19% know now - only months from launch - that Nokia has Windows Phone 8 available. This is what over-saturated marketing can achieve. There is nothing more to give. Marketing has done its job. Those who don't know either are utterly not in the smartphone market at all, or are already fully committed to some other brand and fiercely loyal to it (think iPhone owners standing in line overnight for their next iToy).

Understand what this means. It means, that no matter how many more Billions of money is thrown after Lumia marketing now, the attention of any conceivable addressable market has already been reached. There is nothing more that can be done by more 'marketing'. So lets move to Glengarry Glen Ross and Alec Baldwin's part 2 in AIDA. After Attention: Interest. Are you interested? And we have MKM asking that explicit question about Windows Phone. While only 3.2% currently have Windows Phone on their smartphone, but 36% said yes, they ware interested in Windows Phone. Again, the over-saturation of marketing and media has done its job. 

Now, one in three Americans are intersted in Windows Phone devices, one in five Americans knows Nokia's Lumia series runs the latest Windows Phone 8 software. Currently 3.2% of Americans have any Windows Phone and 1.6% have a Nokia branded phone. How well is this interest and attention being tranlsated into sales. Third in the AIDA formula is Decision. As Alec Baldwin asks the salesmen being threatened to be fired - have your made your decision, for Christ? (meaning to go out and sell tonight, to try to keep their jobs). The numbers are low, this huge level of interest and attention, the future purchase intention HAS to be better. They know about Windows Phone 8, they have experience with past Windows, they HAVE to want the newer better system? Right? 

Wrong.

 

MKM survey of what phone US consumers intend to buy next, finds that while 1.6% own a Nokia, 19% know Nokia has Windows Phone 8 now available, only 0.7% are willing to buy one. Yes. That is right. Less than one percent of US consumers have found the propaganda-brainwashing machine by Microsoft, AT&T and Nokia to be compelling enough, that they would be willing to actually buy a Lumia running Windows Phone 8.

 

ZERO POINT SEVEN PERCENT

Yes, 0.7% only. So lets start with Nokia US loyalty. Windows Phone was supposed to resurrect Nokia in the USA. This idiotic idea was pushed by Elop, when he abandoned the far bigger and faster-growing Chinese market - where Nokia held over 60% market share in smartphones and the highest loyalty of all smartphones - to pursue the far smaller US market where both Nokia and Microsoft were weak players at the time. Today China's market for Nokia has collapsed, is under 5%. Nokia before this silly Eloppian micromadness held 4% of the US market, it is now yes, 2%. After a year of selling Lumia, Nokia is still selling LESS in North America than it did before this idiotic plan was hatched by the Twin Evil Stevies and their microbrains.

But will Windows Phone 8 save Nokia and Microsoft now? No. Of EXISTING Nokia smartphone owners, those last suffering and most loyal fanatics that are left, when they see Windows Phone 8, they are running away at the rate of 55%. Yes more than HALF of all who still own a Nokia smartphone, after seeing Windows Phone 8, and based on their current Nokia (mostly Lumia but also some Symbian) experiences, looking at Windows Phone 8 - 55% of current Nokia smartphone owners say - never again.

THIS IS FAILURE

What part of No can you not understand, Nokia? What part of No, can you not understand, Microsoft? Oh, wanna see misery? Microsoft Windows home market is the USA. MKM asked US consumers are you interested in Windows on your smarpthone - this is Microsoft's home - and 64% said No! This is, and I quote Alec Baldwin from Glengarry Glen Ross, so I apologize for the foul language, but this is so clearly the point: "You can't close the leads you're given, you can't close shit, you are shit, hit the bricks pal and beat it 'cause you are going out." 

All Americans know Microsoft and Windows. Two thirds of Americans have such a poisoned view out of personal experience with the Evil Empire, two thirds of Americans say to Microsoft, stay away from my phones! This is such enormous hostility that Windows can never become the third ecosystem, if your best market hates you this passionately. But yes, lets move on to the cruncher.

96% WHO UNDERSTAND IT, HATE IT

This is the key finding for anyone in any way interested in Microsoft, Windows, Windows Phone, Windows smarpthones, Nokia, Lumia, Nokia smartphones and the Nokia-Microsoft 'partnership'. 19% of Americans are not just interested in Windows Phone, but know that Nokia's latest Lumia series has Windows Phone 8 on it - yet only 0.7% are willing to buy one. It means, of those who know of this actual Nokia-Microsoft offering, 96% of US consumers who truly do understand it and know it - reject it! This percentage is now lower even than the horrid Symbian-to-Windows consumer loss that I reported here from previous consumer surveys last year. You remember this graph?

This graphic may be freely shared (note, this graphic is on previous consumer surveys, does not include this, even worse MKM survey now reported)

Yes, based on PREVIOUS stats, Nokia lost 93% of its loyal customers attempting the transition. Now, the future with Windows Phone 8 says that 96% reject Nokia. This is NOT a company that is 'improving' - this is a company going in the wrong direction, the customers are still abandoning the proposition.

When Bill Gates was in charge of Microsoft, the Windows smartphone market share was second best in the world (behind Nokia's Symbian obviously) and reached a peak of 12% market share about five years ago..  With Steve Ballmer in charge, bullying the ecosystem and scaring Microsoft carrier-partners, Windows smartphone market share had fallen to 5% by 2010. That is when Ballmer convinced his Nokia-pal and ex employee Stephen Elop to abandon the world's largest smartphone OS - when Nokia had GROWN smartphone sales in year 2010 by 52% in just that year, and grown more than Apple or RIM or Samsung - yes its true please check the numbers, Nokia grew more in 2010 than famed Apple, Samsung or RIM - and Nokia did this with Symbian, and did it highly profitably, with the smartphone unit profits increasing towards the end of the year, not diminishing. Nokia towered so far bigger than its nearest rivals, more than twice as big as number two - that Toyota, General Motors have never had such market lead in cars, IBM, HP or Dell (or Apple) have never had such dominance in PCs, etc. This all Elop threw away, to hop in bed with Ballmer and the Microsoftian Misadventure. What happened?

We heard the story. Sony said there is no demand by carriers for Windows Phone and abandoned the platform to focus on Android where all the demand is. Dell said there is no demand for Windows Phone and actually quit smartphones altogether. Motorola said there is no demand for Windows Phone and quit the platform only doing Android. Now again, we heard this February from LG that there is no demand for Windows Phone, and they are not bothering to launch Windows Phone smartphones doing Android instead. Samsung said the same, they now are launching Tizen for which there is big demand by carriers, and continuing with Android, but not doing Windows for there is no demand.

So yes. What happened? Major analyst companies like Gartner, IDC, MIC, Strategy Analytics promised us Windows Phone would have magically recovered to 15% or so by 2012, and clueless Pyramid talked of 25% or better market share for Windows supposedly passing even the iPhone by now. We know the story. Before this Nokia partnership, Nokia had 34% market share and Microsoft had 5% in 2010. In 2011, a year when Nokia mostly sold its suddenly 'Osborned' Symbian phones, its market share collapsed at a world-record speed falling to 16%. Yes, this was literally the worst collapse in handset history, including famed market collapses of the past such as Motorola, Palm and Siemens. How did Microsoft do as it waited for the first Nokia Lumia phones to be launched? Windows smartphone market share fell to 2% in 2011.

Ok, that was 'to be expected' as we awaited the saviour-phones, the superphones, the Lumias running the promised super OS by Microsoft, the brand new awesome Windows Phone 7.5 that Microsoft finally launched in late 2011. How did this partnership do in 2012? Nokia took its world-record-setting collapse of 2011, and managed to out-do it, by an even worse year, setting the newest worst-ever year in handset market collapse, falling from 16% market share to 5%. Yes. Stephen Elop created the world-record collapse of a market leader (by the way, this is not just in phones, it is actually the world record for ANY industry, cars, airplanes, TV sets, PCs, soft drinks, whatever industry you want, THE world record collapse in one year, actually) - and he then managed to follow up with an even worse world-record once again. And is there a silver lining to this? Did this 'sacrifice' and massacre of Nokia's market share result in corresponding gains to Windows? What was Microsoft's Windows smartphone market share last year? 2%

 

TWO PERCENT !!!

 

Before this partnership was announced, their separate market shares totalled 39% (34% Nokia, 5% Microsoft). Now after the Nokia Symbian migration is essentially complete, as we heard from Nokia at the last Quarterly results - what was this partnership's combined market share for year 2012? 5.4% (Nokia 5% and Microsoft 2% but 80% of the Microsoft sales were by Nokia). Microsoft before being poisoned by Nokia, had 5% market share, it now in 2012 had 2%. Microsoft before Windows Phone on Lumia launched, had 2% market share in 2011, after Nokia joined in, Microsoft's market share in 2012 was unchanged at 2%. This is total comprehensive failure by Microsoft.

For Nokia it is worse. Before Microsoft Nokia towered over its rivals, grew 52% in one year in smartphones, made huge profits in smartphones and had the highest consumer loyalty in the biggest markets such as China where it commanded 60% market share!!!! By 2012 after all the bad-will of the Microsoft misadventure - remember even Americans hate Windows so much, two out of three hate the idea of Windows on a smarpthone - Nokia's market share went into the toilet and was 5% for the year - and get this - its down to 3% by Q4 of 2012, so it kept crashing even as Windows Phone 8 was being launched at the time.

This is total comprehensive failure of the Windows experiment. I could have told you so, in fact I did tell you so. I was the most accurate forecaster of Nokia (by a massive margin over the next-most-accurate forecaster) and I was the most accurate forecaster of Windows (again, by a massive margin over number 2) for this silly journey. And I have reported here faitfully all major consumer surveys of this platform. And they keep promising us, that the next Windows version will cure all the problems. Oh? Windows Phone 8 was supposed to finally fix all the problems and finally be the answer to all that was troubling this partnership. Well, now we know. 

MKM survey of US consumers finds that two in five smartphone owners knows that Nokia Lumia has this new Windows Phone 8 as its system. Yet of all who know it, 96% say they will not buy Nokia Lumia with the new WP8. Even of those last remaining vestiges of loyal Nokia owners, their experiences with Windows Phone have been so bad, that 55% of current Nokia smartphone owners in America refuse to buy another Lumia again, even as they have seen Windows Phone 8. Windows Phone 8 will not save Nokia. No, this platform is dead.

ACTING IN NOKIA'S BEST INTEREST

So, Nokia? All other Windows smartphone manufacturers have said that there is no demand for Windows Phone, or the demand is so weak, they don't bother to release new Windows Phone products. Even Nokia's CEO Stephen Elop has said that many carriers hate Lumia not because its a bad phone, but because they hate it that Microsoft owns Skype, that there is a reseller boycott that is against all Windows Phone manufacturers. Elop explained this at the Annual Shareholder's Meeting for Nokia last year. And departed Nokia Lumia execs have said so, and departed Microsoft Windows Phone execs have said so, that there is no demand - or that there is actually an active carrier/reseller boycott even, against Nokia and against Windows Phone. Elop has complained bitterly many times, that Lumia does not get resale support, that the phones are in the stores but the sales staff are not selling them (and remember, the Lumia series has a Nokia-record rejection rate/return rate and thus the sales staff obviously hate selling it). This retail 'reluctance' (if you don't like my word 'boycott') against Nokia has been verified in countless checks in countries from USA to UK, from Finland to France, from Canada to China. Again, its not that silly Tomi Ahonen has invented this problem - Nokia's CEO Stephen Elop has said countless times that the problem is at the carries and retail sales.

The REASON why Nokia's sterling credit rating when Elop took over - yes, Nokia was rated by S&P, by Moody's and by Fitch all as one notch below PERFECT, this at the time of global economic crisis when most Nokia rivals were reporting losses - the reason why those credit ratings downgraded Nokia, was not because the Lumia or Windows phones were bad, it was because there was no carrier support, the retail support was lacking. The ratings agencies listed this problem as the reason at EVERY downgrade, often as their only reason or the biggest reason. And you know the story, Nokia was downgraded so many times, today all three ratings agencies list Nokia as junk!!! Not because Windows Phone or Lumia are bad phones, its because the retail and carriers refuse to sell it.

So your retail refuses to sell your product. The consumers who have tried your new product hate it, refuse to buy more, and are returning it at record levels. The newest version is rejected by 96% of those who see it. What part of No do you not understand, Nokia?

Samsung is the world's largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish to make the world's most undesirable smartphone their only platform. They of course sell on Android and bada and are about to launch on Tizen. Huawei is the world's third largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish enoguh to make the world's most undesirable smartphone their only platform. Huawei sells most of its smarpthones on Androi and will launch smarpthones on Firefox and on Tizen. ZTE is the world's fourth largest smartphone maker. They also sell on Windows Phone. They are not foolish enough to make the world's most undesirable smartphone OS their only platform. ZTE sell on Android and will launch on Firefox too. Lenovo is the world's fifth largest smartphone maker. They do not bother with the world's most undesirable smartphone platform, they only do Android. Sony is the world's sixth largest smartphone maker, they used to sell Windows based smartphones too, but after they noticed its the most undesirable platform out there, Sony quit it and now only sell on Android. LG is the world's seventh largest smartphone maker. They also are part of the Windows partnership but found that there is no demand for Windows so they only do Android and will also expand to offer Firefox based smartphones. LG recently bought Palm WebOS as another more viable OS than Windows. HTC is the world's eighth-largest smartphone maker, and the launch partner for Microsoft's smartphones a decade ago. HTC has noticed the demand for Windows based smartphones is weak and thus has shifted most of its production away from Windows to Android.

Every rational, sensible smartphone maker, who is in the Windows camp, has concluded that because Windows has no strong demand, they need another platform - and EVERY smartphone maker who is in the Windows camp, actually DOES sell more ON THE OTHER PLATFORM.

Nokia was the biggest smartphone maker, it is now in tenth place. Of all smarpthone makers in the Windows partnership, Nokia is the only one that insists on putting all its eggs in this one broken basket. Nokia is the only one that refuses to sell phones on any other platform. Even as it sees, clearly, that its consumers are rejecting the offering. Even when compared to clearly obsolescent Symbian - come on, you'd think ANYTHING is better than Symbian - even when offered the chance to migrate away from Symbian, to take Windows Phone, Nokia lost 93% of those it tried to migrate over the past year or so. And of those who remain, two out of three hate Lumia so much, they will never buy another. Nokia would have a plethora of options, the totally license-free Android, the world's most popular smartphone platform - and Google was begging Nokia to join its platform two years ago. They'd love to have Nokia come onboard now. Or if not Google, there is Mozilla's Firefox, there is Intel's and Samsung's Tizen. There is the African Ubuntu project and there is the Sailfish OS, an evolution of Nokia's own projects in the past. Blackberry had said it is open to licence the BB10 OS, which is getting better response than Windows Phone by that same MKM survey now. 

And thats before we think of Nokia's OWN smartphone operating systems. (Nokia has to pay a royalty to Microsoft, but Nokia's own OS platforms are of course royalty-free to Nokia!!!) Yes, Symbian is old, but even the old OS managed to provide magnificent award-winning tech, like that on the 808 Pureview that won all cameraphone awards last year. Yes, running on Symbian! I am not suggesting going back to Symbian, obviously but there is MeeGo and Maemo, two Linux based operating systems that Nokia developed, Maemo totally in-house and MeeGo with Intel. MeeGo is the only OS up to now, that in side-by-side user tests, across the planet (in those miniscule markets where Elop dared to release the N9 phone) was rated BETTER than the iPhone !!! Who makes a smartphone and an operating system BETTER than the iPhone? And what moron CEO refuses to release phones on that system?

And before you have time to say 'but but but' - used - 2 year old used - USED smartphones on an 'obsolete' OS, MeeGo, the rare QWERTY slider-variant to the N9, the N950 (the ultimate QWERTY keyboard smartphone of all time) - are now selling for obscene amounts. One N950 just sold for 2,000 US dollars on Ebay (1,499 Euros) - oh, and thats not the peak they've paid. Think about that for a moment, all you iPhone-fanatics. You want your 650 dollar iPhone 5 on a contract so you can get it for 179 dollars? And some weirdo takes a similarly valued (at the time estimated retail price range for N950 in 2011 wasa about 600 Euros) and pays 2,000 dollars for a two-year-old touch-screen/QWERTY-slider Nokia on that MeeGo operating system? Yeah. MeeGo the OS that was regularly rated better than the iPhone. Not Tomi's silly words here, some phone fanatics will go buy them at astronomical prices even when used - yet Elop refuses to let Nokia sell it anywhere??? And while the world would love more MeeGo phones that would sell at huge profit margins, Elop insists instead to push Lumia. By the Nokia smartphone unit that currently generates a 20% loss per Lumia phone sold? What is wrong with this picture? 

 

Especially, if your current system is rejected by existing customers at the rate of 93% and new potential customers at the rate of 96%. There is no management logic to Stephen Elop. He is a Microsoft mole. He is so desperate now, he is embarrassing himself and Nokia by for example throwing a TV interviewer's personal iPhone across the room in a TV interview. He is pathetic for suggesting that owning an iPhone is somehow 'embarrassing' - it being the world's most beloved and highest-loyalty (and most expensive) smartphone.

If Elop was acting in Nokia's best interest, he would understand that Nokia loyal customers are now abandoning Nokia not because Nokia's hardware tech is suddenly bad, its because Windows Phone is comprehensively failing in the market. An authority no less than Microsoft Chairman Bill Gates has said that the original launch of Windows on smartphones was working fine, but then Ballmer messed it up so badly that the current Windows strategy cannot succeed. It has no chance of succeeding. Not my words, that is how Microsoft's Chairman described Windows smartphones currently. When this platform is not working, the smart thing is to offer customers some choice on some other platform. That is what EVERY one of the other Windows manufacturers is now doing, after they saw that Windows Phone had no support and didn't produce loyal customers. The only clueless f*ck CEO who refuses this very basic MBA 101 course logic, is Stephen Elop, who rather, when he HAD four smartphone OS platforms, killed all three that were popular and loved by Nokia users, and now insists on continuing with the platform that is most hated of all smartphone OS platforms out there. Yes. Windows Phone is the least loved, most hated, smartphone platform in production. No other Windows partner is foolish enough to put all their eggs in this broken basket. But Elop is. This is yet more proof that Elop is not acting in Nokia's best interest and must be fired immediately. And the Board for not firing him sooner, is clearly incompetent and must have its purge as well.

 

(Note - this article had a mistaken reference to a Kantar market survey in its first version, where I accidentially compared UK statistics to US statistics. I apologize. The mistaken reference has been removed)

Preview of the Smartphone Wars: Bloodbath Year 4: Smartphones Galore. This year will be pretty 'stable' within the context of this industry

So we're up to the Smartphone Wars, Bloodbath Year 4, Smartphones Galore. We've seen the iPhone 5 and Galaxy S4. We've seen Blackberry 10 and Windows Phone 8. We've seen announcements from Tizen and Firefox and Sailfish and Ubuntu. What will this year bring? I do think this year brings 'stability' and 'predictability' to what has been the most volatile industry in economic history of any 100 Billion dollar annual business or bigger (the handset industry is worth $240 Billion dollars annually and the vast majority of that revenue is from the smartphone side). And within the context of smartphones, that is 'relative' stability, less volatile than the past three years.

I've been doing this pairing now for the past three years, previewing the Bloodbath at the start of the year, and then after the final numbers are done, giving the total market review. So Bloodbath preview 2010 is here, Bloodbath Year 2, Electric Boogaloo 2011 here, and Bloodbath Year Three, Digital Jamboree ie year 2012 preview is here. Note for example my Nokia forecasts in those blogs for year 2011 and 2012 were THE lowest, worst predictions of anyone published in the industry - and I ended up being the one who got it nearest to the truth (which was obviously worse even than I could imagine). And yes, then I do the end-of-year performance reviews for all brands and operating systems, so for those final numbers, smartphone market results 2010 are here, 2011 is here and 2012 is here. So, now its my Bloodbath Year 4, Smartphones Galore. What to expect? Lets go through the biggest manufacturers and their operating systems in this preview

 

SAMSUNG - STARTS SHIFT TO TIZEN

 

So Samsung established itself as the world's largest smartphone maker last year, taking that title from Apple, in addition to taking the crown for the overall largest handset maker from Nokia. Samsung has passed the half-point of migrating its handset production from dumbphones to smartphones. It sold 215 million smartphones last year and had 31% market share. After seeing the Galaxy S4, we can be pretty sure that the Samsung sales juggernaut isn't about to stop any day soon. Samsung owners tend to be happy, they come back for more of the same, and inspite of many cheaper Android-clone makers appearing, Samsung still shipped 41% of all Android phones sold in the fourth quarter. If Samsung wanted, they could ride this train into the sunset, happy and contented. Except they aren't.

This is the year Tizen will ship. Tizen at least initially will feature Samsung's top phones, so imagine the Galaxy S4 but running an evolution of what we saw with MeeGo on Nokia's award-winning N9. And the beauty with Tizen is the carrier community around it, starting with NTT DoCoMo which promises to start to sell Tizen phones in Japan this year. Tizen's launch will be seen as the perfect case study of contrasts, how can Samsung now, as world's largest smartphone maker and world's largest phone maker, with the help of carriers, switch from the world's most used smartphone OS (Android) to its new OS developed with Intel (Tizen). And the intention is to launch new smartphones in parallel with the existing system but introduce first Tizen phones at the top end of the price pyramid, as flagships. This is exactly what Nokia had in its strategy prior to Elop selecting Windows. Nokia, as world's largest smartphone maker back then, and world's largest phone maker, with the help of carriers, was intending to switch from what was then the most used smarpthone OS (Symbian) to its new OS developed with Intel (MeeGo). The intention was to launch new smartphones in parallel with the existing system, and introducing MeeGo smartphones at the top of the price pyramid, as flagships. And contrast that with what Elop did at Nokia - as world's largest smartphone maker, against the wishes of carriers, abandoned world's bestselling OS platform, forced change to the smallest, developed solely by the evil empire, Microsoft, known as the widow-maker of mobile who bankrupts all its partners. The new phones were not introduced in parallel but to replace Nokia's existing platform and the launch was not at the flagship, but in mid-price level. Wrong, wrong, wrong, wrong, wrong wrong and wrong. But yes, now we'll see how Samsung does it 'right' - remember, my dear readers, as you see Tizen phones and their reception and support by carriers - and think, this could have been Nokia in 2011 when the N9 on MeeGo launched.

 

So at Sammy, we will mostly be watching what will the new Tizen phones look like, where will Samsung be launching them and how will they be received. I would expect a gradual but strong shift of Samsung smartphones from Android onto Tizen over the next few years. This year around Q4 it probably won't be more than 5% or 10% of Samsung's overall smartphones that run on Tizen. What is Samsung's overall market share range for this year? I think they're pretty safely in roughly the 30% range, say between 25% and 35% of all smartphones sold this year and obviously over 95% of those will be on Android for the full year.

 

APPLE - WILL WE GET PRODUCT LINE SPLIT ? (Finally?)

 

The echoes begging for a wider product line of Apple iPhones including a lower cost 'Nano' iPhone model are growing louder and louder. Some feel the Apple magic was exceptionally Steve Jobs and this company will now regress to becoming just another tech brand, and that it might be severely overvalued right now. Others think its Apple, has the world's best loyalty in all the tech it manufactures, and the hysterial will return by the time they start talking of the next iGadget. Here on our blog, looking very tightly only at the smartphone wars (ignoring the enormous success of the iPad for example which is obviously part of the iOS ecosystem), the iPhone market share growth has been anemic since 2009 when it was 14%. Since then the iPhone market share has grown but very mildly, barely exceeding the growth rate of the industry, to 16%, 19% and 20%.

But when translated to all phone sales, Apple's share is 12%, and trying to expand to the other 88% who buy far cheaper phones currently than the iPhone, phones literally 30 times cheaper than the iPhone and yet have a small color screen for rudimentary internet services - Apple is hitting a wall in terms of market share growth. Yes, Apple iPhone growth this year will be astonishingly strong in any case, simply because this industry will grow by at least 30% maybe closer to 40% and will be as near to 1 Billion new smartphone sales that it won't make a difference. If Apple wants to regain strong market share growth and defend its second-place position in smartphones from the hungry Chinese makers, its about time to release a lower-cost basic iPhone targeting in particular the Emerging World markets, and priced near half of what the current lowest-cost iPhone 5 costs (we are talking full unsubsidised price here, not the 'with contract' price that for example Americans are used to seeing. The real price of a new iPhone is not 179 dollars, its 650 dollars...)

 

I am 'sure' that Apple will split the product line at some point, and start to release two (and eventually more than two) new models, one at the top end to replace what is now the iPhone 5 series, and another significantly cheaper with near half price and more basic technical specs and probably a less sexy exterior, more plastic in parts, not quite that slim, etc. But when will we see that? There is growing speculation that such a 'Nano' model is in the works and might be released for the Autumn of 2013 in time for Christmas sales, with the new iPhone 5X model at the top end, the new flagship, released earlier, like the last week of June. This would be very healthy for Apple's position.

So, if Apple continues with only one iPhone model, they will struggle to hold to the 20% level for the full year 2013, give them a range of 15% - 20% but if they release a parallel lower cost model, then by Q4 they could have combined iPhone sales in the 25% to 30% range.

HUAWEI - MORE MORE MORE

So then the hungry Chinese rivals. First up, Huawei. Huawei become the world's third largest smartphone maker last year and essentially all major analysts agree with me on this (I was the first analyst to call it). But still, in my calculations and those of many of the 'big 4 analyst houses' there is a considerable discrepancy in the overall Huawei shipment numbers. I believe most of the analysts have not yet calculated the Chinese market and Huawei's strong position there quite accurately, so they may revise their positions upward on Huawei. For Huawei, being strongly growing currently, the relevant number for us to look at is not the full-year 2012 sales, but rather the last quarter Q4 sales, by when Huawei was nearing 10% global market share.

Huawei is particuarly aiming for Asia and Africa. China has 1.3 Billion people, India has 1.2 Billion and Africa has 1.1 Billion (vs 330 million in the USA for example). China is well on its path to migrate phone users from dumbphones to smartphones (about 40% of new sales were smartphones) but India and Africa are still in the very early stages. That means, that whatever existing 'installed base' smartphone user loyalty exists, is very small, compared to the new sales that will come this year and next. If someone does have a loyalty to Blackberry or Nokia's Symbian or Samsung on Android or bada, those are a tiny slice of the market that is now emerging. As Huawei offers a broad range of smartphones at low costs, running Android, they are poised to take more share and should be a strong growing brand this year. They should end the year somewhere in the 15% market share level, say 12% - 17% as their target range with higher numbers towards Q4 than the full year numbers. And let me suggest that if Apple doesn't give us a Nano iPhone this year, Huawei might outsell the iPhone in smartphones by Q3 (if the iPhone 5X launches for Christmas) or by Q4 (if the new iPhone 5X launches for the summer). For the full year, Apple is still likely to hold to its 2nd place ranking but for perhaps one quarter this year, Huawei may jump Apple and then it will be a big run for 2nd place into year 2014.

ZTE, LENOVO, COOLPAD - GROW GROW GROW

And honestly, I can't find currently major differences in the pack of Chinese makers that follow. ZTE is the biggest of the rest, and have the widest available country and carrier footprint. They had about 5% market share. Lenovo only entered the global Top 10 last year (displacing Motorola) and Coolpad is just outside the Top 10 currently at 11th, waiting to displace Nokia which is happening probably now in Q1 of 2013. Lenovo started its global expansion last summer heading to Russia, India etc and Coolpad is about to follow on those footsteps. Each of these three will grow in size this year, grabbing market share and climbing up the Top 10 chart.

 

Lenovo by the way is in the rumors about possibly buying Blackberry (the company previously known as RIM) and also some rumors about possibly buying Nokia. They have admitted they are considering if some corporate purchase would make strategic sense. If Lenovo buys either Blackberry or Nokia (or maybe HTC, which must also be on their radar) then obviously add that market share to their total. Very briefly, HTC would be perhaps the 'easiest' integration being an Android manufacturer, but it would not help i the enterprise market. Both Blackberry and Nokia (what used to be the E-Series business) would have strong fits on the enterprise side. Nokia would be the prize in terms of its patents portfolio and for Lenovo would give the strongest phone brand of Africa and recently also strongest of India and China, but Nokia would come with a lot of baggage obviously, many parts would need to be sold that Lenovo wouldn't care to own. With Blackberry, Lenovo would inherit the BB10 OS platform, and should be expected then to use that as its new alternate OS to run alongside Android. Same with Nokia and Nokia's MeeGo and to some extent even Symbian. HTC would not yield an OS platform and related apps ecosystem. But I will now deal with Lenovo as an independent entrant alone, in this analysis.

So for the year, ZTE should grow into the about 7%-8% range, Lenovo get into the 5% range and Coolpad enter and stake a solid Top 10 position in the 3%-4% market share range for the year.

BLACKBERRY - LIGHT AT THE END OF THE TUNNEL (Or is the light an onrushing train?)

 

I think last year, 2012, was Blackberry's Annus Horribilus and they should recover this year (but please note, my past Blackberry forecasting history is nearly 100% wrong, they seem to be the one brand that I just can't get a proper handle on haha). BB10 is not the ultimate 'Jesus system' to save the company and restore its 20% market share position, but its good enough to stop the rot. Then we have a strong, loyal, and addicted user base who were waiting for a modern Blackberry. Now they have them. It should stabilize Blackberry and perhaps allow for modest rebound. I think Blackberry will end the year roughly where it was by Q4, but has a modest upside. Lets say their range is 4% to 6%. The big problem for Blackberry is, that the corporate business is steady, so in bad years that part of their client base will erode very slowly, but in good years, that part of their business will also grow only very slowly. Its not like the consumer space, where if you have a hit phone, you can have enormous sudden growth (like say, the Motorola Razr almost a decade ago).

 

SONY - THE BIG GROWTH STORY THIS YEAR

 

But if there is a company determined to get it right, with the CEO saying all the right things and the company having all the right elements, tools, brands and competence, it is Sony. Sony could now, as it is past its Ericsson partnership, see a new renaissance. Did you notice, briefly last year, Sony was the third biggest smartphone maker? And the CEO now says third is their target and that for Sony's consumer electronics business, 'mobile is front and center' to their future. That is the right message coming from a CEO who intends to be one of the winners in this space. Then add in Cybershot, Walkman, Playstation and all the potential of movie and music tie-ins and Sony could be onto a big year. They have usually sat at the higher end of the phone price points but have global reach and offered also mid-priced featurephones. As the prices of low-end Androids come down, Sony should be able to give us highly competitive, highly desirable Sony  branded low-cost smartphones to build market share while also offering some superphones to the top end as flagships.

I would also see Sony in the market as a possible buyer of one of the struggling smartphone makers (Nokia, Blackberry, HTC). For Sony's immediate short term gains, HTC would give the best fit as another Android maker, but Nokia's global reach, carrier relations and scale - plus its patents portfolio might be the more useful long term play, but accepting considerable costs of integrating the valuable parts of Nokia into the Sony culture (and selling off the rest, obviously, much of Nokia is what Sony would not want, like its dumbphones business. Sony has nearly completed its transition from dumbphones to smartphones). But like Lenovo, lets deal with Sony as only its own sales, excluding any corporate purchases, so Sony alone should grow and end the year with something like 6% to 8% market share. This year I don't see Sony returning to the number 3 slot but number 4 is very well in the cards for the Japanese electronics giant.

NOKIA - DEATHWATCH

 

Nokia is dead. It did sell 5% of all smartphones of the year 2012 only because its fall is so fast, the early sales in 2012 were more than 5% of the market. By year-end it was down to 3% and this, after the new Windows Phone 8 smartphones had been launched. Nokia celebrated making a 'profit' in its handset unit in Q4 which was due to smoke and mirrors, primarily due to selling Nokia's HQ building (without that sale all attributed only to the handset business, Nokia's handset unit would have reported a loss in Q4). And even if the low-cost dumbphones are sold at a slight profit per phone, the smartphone unit still generates about 20% loss per Lumia smartphone sold. This is no way to run a business. The Nokia smartphone unit was hugely profitable before Elop changed the strategy and immediately since he announced the Windows based strategy, the Nokia smartphone unit has reported a loss every single quarter since. It had never reported a loss prior to that moment.

So Nokia fell from 29% of all smartphones sold before the Windows strategy was announced to 3% last quarter when most of the transition to Windows based Lumia smartphones was complete. The Lumia series is spectacularly undesirable, the sales channel hates it, it is not generating sales (And Nokia's CEO repeatedly complains that while the phone handsets are technically good, the retail is not supporting its sales). The Lumia series seems to be designed to be hated by existing loyal Nokia smartphone owners so the return rates of the Lumia are astronomical and the loyalty is in the toilet. A recent study by Bernstein found that two out of every three new owners of a Windows Phone based smartphone wanted their next phone to be any other platform than Windows based. This is after the 17 out of 20 loyal Nokia owners who refused to take the Lumia to begin with, and are already lost to Android and the others. Yes, out of 20 attempts, 17 run away, and of the 3 who agree to try Lumia, 2 are so disgusted with it, they want any other phone for their next phone. If you can only get 1 out of 20 customers to remain with your brand, it means only one thing. It means the Windows Phone strategy is dead for Nokia, there is no life in that platform. And if you think Lumia 920 is the answer with Windows Phone 8, we just had the Finnish consumer magazine review of the phone which was hideously bad.

All this while Nokia wowed the world with the best camera ever installed in a phone, the 808 Pureview that ran on Symbian and sold last year - sold so well, Nokia could not keep up with early demand. Nokia reported that the camera is the number 1 feature loyal Nokia smartphone buyers ask for, yet is there a big sensor modern super camera on the Lumia series with an industry-leading sensor size and things like Xenon flash and other Nokia flagship staples for its cameras? No. Elop rebranded the Pureview to a basic 8 mp camera onto the Lumia series and now creates more disappointed Nokia buyers with this trick. Meanwhile Samsung's Galaxy S4 has a 13 mp camera, finally, 3 years after the Nokia N8 with its 12 mp camera, is Samsung's flagship offering a camera slightly better (on this one spec) than the Nokia flagship from 2010. Does any Lumia series even match that Symbian based N8 with its 12 mp camera. Of course not.

And we heard during MWC that Jo Harlow admitted that yes, many Nokia customers including carriers are requesting real QWERTY handsets. Thats no surprise as close to a third of Nokia's total smartphone sales had real QWERTY keyboards before Elop changed his strategy - but no, Nokia acknowledges customers beg for this feature, yet refuse to give it to them. No, there are none, and there will be no QWERTY keyboards on Nokia's Lumia smartphones. PS come here to Asia and see how many of Nokia's rivals offer a QWERTY variant in their portfolio... I am not suggesting all Lumia phones should have QWERTY sliders etc, but after ten Lumia models already, isn't it time Nokia offered at least one premium Lumia smartphone with QWERTY slider?

 

And before that is available, what moron CEO sees its customers begging for QWERTY, sees he has the award-winning MeeGo platform based N950 ready to sell - in fact manufactured at Nokia factories, and refusing to let that premium flagship smartphone being sold anywhere? Where the MeeGo based smartphones have Nokia-record loyalty and the highest-recorded resale values, vs Lumia having worst loyalty and zero resale value - if the CEO refuses a QWERTY based Lumia, then at least let them sell the N950 now in the interim? If there is truly 'demand' as Jo Harlow admitted. Only a moron CEO intent on destroying Nokia could make this decision to refuse the sales of the MeeGo based N950 to all Nokia markets (and obviously any next Nokia CEO would instantly reverse that idiotic decision)

 

Nokia life? I have been saying since the summer of 2012 that I expect Nokia to be sold any week now. I still think so. I have calculated in countless ways how Elop is the worst CEO in the history of corporate governance and has caused a world-record setting collapse of Nokia's core business. I cannot imagine any reason why the Nokia Board is letting Elop remain in charge unless its collusion or criminal abuse of Nokia shareholder trust (ie deliberately destroying Nokia while short-selling the stock, for example). When Elop admits his strategy isn't working but insists he will continue on it anyway, that is when the Board has to fire the CEO. As they didn't, it means the Board is incompetent too, and must be fired.

But yes. I do think Nokia will be sold. I think nobody who buys Nokia will want all parts of it but the patents portfolio alone is the biggest in the industry and makes Nokia a worthwhile investment for any major global tech player who wants to be big in mobile. Then Nokia's brand - still the bestselling phone brand of Africa, India and Latin America (this when dumbphones are included obviously) and recently also in China - is a great value. Nokia's technical brilliance is valuable, witness the 808 Pureview running on the obsolescent Symbian platform yet won every single cameraphone award of the year and still in 2013 beats every single other cameraphone on the market in comprehensive tests. In fact so good, under some conditions it beats stand-alone professional digital DSLR cameras even ! And Nokia has its Navteq unit, everybody likes maps and location tech. Then Nokia has its joint venture with Siemens for networks, NokiaSiemens Networks which probably most buyer-candidates would not want to keep so it would likely be sold. Nokia is still the world's biggest maker of dumbphones, so the buyer might or might not want that part of Nokia. Nokia has very modern high capacity phone factories situated strategically around the world near the major markets. If the buyer intended to do volume smartphone manufacturing, this is the biggest (and currently mostly idling) capacity available in the space. And so forth.

Who might be bidding? I think when the news breaks that someone is seriously considering - or even bidding - on Nokia, I think the dam will break and many suitors will show up, either alone or sometimes as a part of a buying consortium. I see likely bidders including some obvious names like Sony, Lenovo, Samsung, LG, Google, Apple, Microsoft, Intel, Panasonic, Sharp and ZTE. Note, Microsoft would want Nokia to remain in the Windows Phone ecosystem and any buyer would end that foolishness, so Microsoft's interest would primarily be to buy the Nokia Lumia unit, not the other parts. Then there are others who might be interested in NokiaSiemens Networks or parts of it like Ericsson, Alcatel-Lucent, Cisco and SAP. And I could see a dark horse interest appear for example from Dell, HP, Acer, Asus, Toshiba, Pantech, Coolpad, HTC, etc.

So look at Lenovo for example. They want to 'invade' Russia, India, Africa... If they do it with the Lenovo brand primarily as a smartphone, it is slow going, at the highly-contested top end of the market, and while they would make gains, it would be tedious. Or if they bought Nokia, they could instantly rebrand all low-cost Nokia dumbphones as Nokia-Lenovo phones, and use those new 20 dollar super-cheap Nokia dumbphones to hold Nokia's massive market share edge in those markets, while migrating the customers to organically switch from the Nokia brand to the Lenovo brand. Then offer low-cost Android based Lenovo smartphones - built in Nokia smartphone factories - sold as Lenovo-Nokia smartphones, and migrate the top end of the dumbphone/featurephone client base from Nokia featurephones to Android based Lenovo. Then two years from now, drop the Nokia name from these phones, keeping the Nokia brand alive only as the discount dumbphone brand as long as they still have a market.

If Nokia was sold to Lenovo and Nokia-Lenovo abandoned the Windows strategy, Nokia sales would stop collapsing and start a rebound (we hear repeatedly from Elop that it is the retail support which is lacking and that - as Elop admitted to Nokia shareholders last year - is because of carrier hatered of Microsoft now that it owns Skype). Whether that would be a strong or weak rebound, is anyone's guess. But if Lenovo offered in the short term, some MeeGo and Symbian based 'real' Nokia smartphones AND some new Lenovo Android based 'Nokia-Lenovo' smartphones - the carriers would be happy, the retail would be happy, the customers would be happy, the developers would be happy, and Lenovo would make far faster gains in the smartphone space than it could just by growing organically by its own brand. If the Nokia smartphone market share in Africa, Latin America, and non-China parts of Asia are roughly 25% today, and Lenovo could keep that migrating to their eventually all Android (and MeeGo) based Lenovo-Nokia smartphones over two years - that would be something in the magnitude of 60 million total smartphones per year by 2014 - excluding the Chinese market where Lenovo already is strong, and a Nokia boost could push Lenovo to biggest in its home market. But also note - those 60 million will never be sold using Windows Phone which is far too expensive a platform (license royalties, required hardware etc) and can't sell at low-enough price levels to make such gains. This only would work if the Windows strategy is abandoned and a low-end smartphone OS is used like Android or perhaps one of the other new ones.

But lets ignore the likely sale and splicing-up of Nokia into pieces. Lets look at Nokia prospects as a stand-alone smartphone maker with Elop somehow still in charge. The Q4 sales for Nokia across all its smartphones was 3% market share. It was down from 13% one year before, Q4 of 2011, which was down from 29% the year before, Q4 of 2010. No, this is not a sign of success in anyone's book. Can the bleeding stop? Maybe. Can Nokia stabilize its business in smartphones (when it still made a 20% loss per smartphone sold for Christmas 2012) I doubt it, but lets be very positive and say it can. I say Nokia's high end ceiling for this year is that 3%. I don't see it happening, I think Nokia will sell 2% of the smartphones of this year. But yes, 3% is the upside ceiling. And on the downside? When past collapses in the handset space happened, at these levels the companies went bankrupt and were sold (like Motorola, Palm, Siemens, etc). Nokia's bottom end, lets say 1%. So your target for Nokia for 2013 is between 1% and 3% and yes, at those levels Nokia has fallen out of the top 10 biggest smartphone makers, quite the irony considering Nokia invented the smartphone space and towered over its rivals when Elop took over, profitably selling so many smartphones - it was literally more than twice the size of its nearest rivals - and growing faster than those too, so Nokia's lead to Apple, Samsung and Blackberry was increasing, not them catching up, during 2010... Now just two years later, we are on a Nokia death-watch.

HTC - CAN THIS BE ANOTHER DEATHWATCH TOO?

And why is HTC in such bad shape? They keep reporting bad news per quarter, and you think it cannot possibly get any worse, and then it gets worse. If Samsung is able to sell on the Android (and some Windows) platform so highly desirable premium phones, why can't HTC also on Android (and some Windows) platforms do the same? The HTC fall would rank as one of the worst in handset history were it not for the spectacular collapse of Nokia and the simultaneous crash of Blackberry that we saw in the past two years. The HTC troubles have gone almost unnoticed. But yes, they are down from their peak as high as 12% market share in early 2011 to 3% now and falling. Where will HTC end? I think they are also in the danger of dropping out of the top 10, but as their business is not unprofitable (they only report ever diminishing profits) I think they have a chance. I'll say HTC is in the 2% - 4% range for the year and might hold barey onto a Top 10 ranking. But yes, HTC might very well be suddenly sold this year.

LG - ON THE COMEBACK TRAIL

 

LG is now on the mend after they abandoned their loss-making Microsoftian misadventure and joined the Android fold. LG had hoped the 3D displays would be their miracle cure, it didn't pan out but they have turned their loss-making phone business around, now only doing Android (and famously stating that there is no demand for Windows Phone based smartphones, something Samsung also later confirmed) and are on a steady growth trajectory. They were a bottom-tier Top 10 maker, and I expect their growth to be modest this year so they'd stay in that grouping, but expect LG to end the year in something like 4% to 6% in size.

OPERATING SYSTEMS

Then we have the OS wars. Android dominates the world today and I don't see them losing their lead, but maybe see parts of it chopped away, a little bit, by the newcomers, towards the end of the year. Again, lets do this in order of their sizes

ANDROID - TO BE FLAT

Android powered two thirds of all smartphones sold by year-end and that would be roughly the scale they will achieve this year too, lets say between 60% and 70%. The Blackberry and Windows Phone base is too small to make big impacts to Android under any scenarios, the only other platform which will matter to Android is Apple's iOS. If Apple does split its iPhone range and introduce a lower-cost iPhone, expect the lower end of that scale for Android, if Apple sticks this year once more to only one iPhone model per year, then expect the higher end of that scale for Android ie near 70%.

The new OS platforms (Firefox, Tizen, Sailfish etc) will not achieve scale this year to do more than a couple of percentage points of market share, which will come primarily from the Windows and Symbian share, not so much from the Android share, initially. But also, I think especially with Samsung launching Tizen and Huawei already committed to launching on Tizen this year, we will see the peak of Android sales, as the world number 1 and number 3 smartphone makers start the shift away from Android to Tizen towards the end of the year. Intially it will only be flagship type premium phones, more profits and prestige than volume, but its a start. And then Firefox and others will also do the same in the second half for various mid-tier makers. Likely Android peak market share will hit Q2 of this year and might be as high as 75% momentarily if we havent' seen a new iPhone launched at the end of June.

 

Note, this year Android will replace Windows globally as the OS powering most computers in use (when smartphones and tablets are included in the calculation). That will be a nasty wake-up moment for Microsoft investors and owners and partners. That the 'impregnable' Windows PC desktop space ecosystem has been conquerred, by Google's Android? No wonder Google already released a laptop/netbook running Android. Google intends to power the vast majority of all computing platforms from our desktops and tablets to our eyeglasses, televisions, clothing, cars etc. Yes, Google and Android have won the IT platform war of the century, beating Windows like a rented mule, just like I wrote last year.

iOS - FLAT OR NICE GROWTH (Depends on prodcut line split)

Apple's iOS in smartphones will be identical to the Apple iPhone share in the above. I don't have more to add, it will be in the 15% to 30% range depending on whether we see 1 or 2 new iPhone models this year.

BLACKBERRY - REVIVAL'ISH

The Blackberry OS was the third bestselling OS last year and will also be so this year. The story is the same as in the above, so the target is somewhere in the 4% to 6% range.

SYMBIAN - GONE

 

Symbian was still the fourth bestselling smartphone last year, when it finally only powered Nokia branded smartphones alone, and saw Nokia aggressively migrate the user base from Symbian to Windows Phone. By Q4 the Symbian share was down to 1% and Nokia's CFO Timo Ihamuotila has said that was the last quarter of meaningful Symbian sales levels, it will be rounded off to 0% market share for year 2013. Bye bye Symbian, you deserved better than this.

BADA - BING, BADA-BONG

Samsung's bada was the fifth biggest OS still by sales in 2012, but as Samsung started to ramp down bada in its migration to Tizen, the sales fell towards the end of the year. This will be another platform which will have sales so slight, they are rounded off to 0% market share in 2013.

WINDOWS PHONE - SUDDENLY CANCELLED?

So Windows Phone was early to the market, to try to heed the operator/carrier community's call, to want a third ecosystem. Yes, they want a third ecosystem to balance out against Android and iOS. Microsoft and Nokia had this story to themselves for two years. They achieved what? 3%. Microsoft before this story, held 4% of the smartphone space (when Windows Mobile and Windows Phone were added together). If you go from 4% to 3%, selling 'we are your third ecosystem' to a market which honestly is begging for a third ecosystem - it can only mean one thing. The carriers won't have Microsoft anywhere near their ecosystem(s). Hence you have heard carriers flocking openly to embrace Tizen and Firefox this year, launching tons of handsets this year, with carrier support and subsidy and commitment. That is your 'third ecosystem' not this Windows ploy.

They are not idiots over in Redmond. We already heard Microsoft Chairman Bill Gates admit to an interview that while Microsoft was early to the smartphone races, it failed in gaining carrier support and the current strategy is incapable of winning the race. The current Windows Phone strategy 'prevents' the chance of success. It is therefore, in Bill Gates's evaluation, a failure. Not a failure of being early and discovering a market as it emerged (which incidentially, happened when Bill Gates himself was still in charge). A failure in execution instead, under new CEO Steve Ballmer. Gates was not ready to call for Ballmer to step down - that may come this year - but I think its pretty obvious Gates sees clearly that Windows Phone will never become the third ecosystem, and probably thinks the billions sunk into it is good money thrown after bad money. That could be better spent on the desktop PC and cloud computing and Xbox and other places where Microsoft still has a chance to be a major player.

Microsoft has recently cancelled some of its costly big programs like the Zune music player and the Kin youth phone. I think the Windows Phone project is now in jeopardy. If for example Nokia were to be bought by anyone other than Microsoft (and/or not selling the Lumia unit to Microsoft) then the Windows Phone project would die an instantaneous death. Note, Windows 8 on the desktop is safe, as is Skype on that platform, but the smartphone dream at Microsoft would die instantly. This, because of the remaining Windows Phone manufacturers, Nokia sells 77% of all Windows Phone based smartphones. If Nokia pulls out, Windows Phone is instantly dead. And separately, I would not be surprised, if after Tizen and Firefox launch, and carriers enthusiastically support those, and several hot new phones appear often from brands who are supposedly Windows partners (remember recent comments from LG and Samsung that there is no carrier demand for those phones), that Microsoft announce some kind of 'migration plan' to the Windows 9 PC based OS platform that effectively ends the stand-alone Windows Phone 8 and its future. Then the Windows 9 would be a tablet-PC platform only (that theoretically also supports smartphones). And no major handset maker would remain to bother to make those smartphones - all while TWO healthy new ecosystems thrive as Tizen and Firefox...

 

By the way, almost perfectly in time, Microsoft has just announced that Windows Phone 8 and Windows Phone 7.8 will receive 'mainstream support' including security updates for only 18 months and that means mainstream support will end before year 2014 is over. What Microsoft has to decide before now and then, is will there be another newer Windows Phone version (like 8.5) or will they abandon the platform. I would be sure they are busy making those calculations right now at Redmond, if the decision has not already been made (which, after the Bill Gates comments, to me seems even more likely). Its been very clear that the Nokia experiment with Microsoft has been a total failure, they held 2% market share with Windows Phone before Nokia joined the game, and now after Nokia has 'migrated' all its customers to Windows Phone, the ecosystem still sustained for year 2012, a market share of... 2%. Billions poured into the process and no gain. I think we can read in Bill Gates's comments that this is the project he most wants to end as a waste of effort at Microsoft.

If Windows Phone is not ended, I can also see, it would be in Microsoft's DNA, that Microsoft keeps pumping Billions into the eternity-project that is Windows smartphones, to ever diminshing returns. They did hit a peak at 3% market share in two quarters in the past year (but lifetime Windows smartphone peak was 12% five years ago, so its been misery ever since), I don't see them having such luck this year, but will be closer to 2% if Nokia stays onboard for the full year and Elop remains in charge of Nokia. To be safe, lets say their range is from 1% to 3% as their market share target for the year, and don't be surprised if Microsoft throw in the towel after Tizen and Firefox launch and carriers offer strong support of those platforms...

TIZEN - STRONGEST OF NEWCOMERS

 

Then we have the new operating systems. I place Tizen a little bit ahead of Firefox for the primary reason of NTT DoCoMo's clear stated interest. NTT DoCoMo controls half of Japan's mobile market and has almost total control of the handset specifications that are sold to its customers. NTT DoCoMo was fully committed to Symbian until Elop suddenly ended that path, and had been seeking any alternative that was viable, that was not part of Stephen Elop in any way. So Nokia's options were immediately unacceptable in Tokyo. But they found a perfect pairing in Samsung and Intel, with Japan's long history of Linux based smartphones, Tizen is a perfect solution. NTT DoCoMo will aggressively migrate its smartphone base from Android to Tizen starting this fall, with the first flagships coming from Samsung, Huawei, Panasonic and NEC.

The Japanese market is closely monitored by the other advanced Asian countries, Taiwan, South Korea, Singapore, Hong Kong etc - so the moment top new phones appear from Japan's market, powered by Tizen, and featuring Samsung, Huawei etc, you can expect they will find an eager market in the advanced Asian countries too. I think Tizen is pretty safe to be in the 2% range of global sales by year-end, ie at Q4 of 2012, but not much more, and for the full year, they will maybe find their share rounded off to 1% if they are lucky. But it will be far stronger sales growing into 2014 from that strong start.

FIREFOX - ANOTHER STRONG ENTRANT

 

Firefox has more carriers and more handset makers signed up, but the handset makers are in markets where the carrier doesn't have as much control of the handset space, often sell phones without contracts ie pre-paid accounts and the manufacturers are more of the second tier variety. Yet, its certain, Firefox OS will be launched this year and will see support in many markets, led by Spain and Telefonica. Spain is one third the size of Japan as a market so I do expect the total early success in absolute numbers to be smaller for Firefox than Tizen, but the race will then be on. All you need is one hot phone that everybody wants, and you can have a winner. I'd say Firefox has about 1% market share by Q4 and for the full year won't register 1% yet. But they will grow and become stronger into 2014.

As I mentioned before, I am totally convinced that the carrier and retail support will jump from what little exists for Windows Phone to Tizen and Firefox (and Ubuntu and Sailfish) so the primary early market share gains for Firefox and Tizen will not come from Android, iOS or Blackberry, they will come primarily from Windows Phone and technically, what might have remained of Symbian at that stage (and obviously in the case of Samsung, cannibalizing its own bada in the migration to Tizen).

UBUNTU, SAILFISH - MAY SURPRISE

 

I see these two only as niche players this year, launching maybe a few handsets on very marginal brands and trying to gain some attention and win some awards with innovative designs etc, to get attention in a year more focused around Tizen and Firefox (And BB10 and the next iPhone etc). Ubuntu is the African Linux based open source project and Sailfish you may better know as the OS used by Finnish newcomer Jolla ie as an evolution of the Nokia-abandoned MeeGo project.

 

A SURPRISINGLY STABLE YEAR

 

So I think after three very volatile years, we should/could see a relatively stable year now. The Nokia carnage is over, the Nokia dividend ended up going disproportionately to Samsung. The Blackberry blood has been spilled and it should now be stabilized. Android's rapid rize has reached near its peak, it should now also stabilize. The growth and declines will be more with the smaller manufacturers, picking up a few points of market share for especially some Chinese makers, and the new operating systems, led by Tizen and Firefox, picking what remains off the corpses of Windows, Symbian (and bada). This industry is however very highly competitive. A one hit phone could suddenly turn a bit-player into a contender and whatever platform that phone happens to be on, could become hot too. HTC, LG, Blackberry are all companies that have the ability to make a comeback, and if Nokia fired its CEO and ended the Windows misadventure, Nokia could easily bounce back too releasing a series of MeeGo powered smartphones instead.

Should you care what I think of the smartphone space? Well.... I just happen to be the most accurate forecaster of this industry, have been for more than a decade now. Check out for example how major analyst houses got their Windows Phone forecasts 'slightly' off the mark and compare to mine. Or take a look at this set of forecasts about Nokia market shares including mine.. 

One plug - if you need data on the handset market, please see my TomiAhonen Phone Book 2012 for all the data on handset features, installed base, market shares, operating systems, etc. More info here TomiAhonen Phone Book 2012.

The Annual Mobile Industry Numbers and Stats Blog - Yep, this year we will hit the Mobile Moment..

So its that time again. I just finished the 2013 edition of the TomiAhonen Almanac, my annual statistical volume on the status of the mobile industry, and as usual, to celebrate that publication, I will do the big update to all the mobile numbers. You may want to bookmark this page for future reference

MOBILE NOW 6.7 BILLLION ACCOUNTS

So the monster number first. The global count of active mobile subscriptions reached 6.7 Billion at the end of 2012, and yes, this summer we will hit the 'mobile moment' ie that point in time when for the first time ever on this planet, a consumer technology will match the human population in size. The planet has 7.1 Billion people and as we grew subscriptions 14% last year, its rather clear we will hit that 7.1 Billion number around the summer of 2013. What was the penetration rate per capita at the end of last year? 93.7%. And there is no stopping that growth, don't listen to those who once again suggest that we are 'near saturation'. Hogwash! Several countries, led by Hong Kong are past 200% mobile penetration rate per capita. This growth is not stopping anytime soon.

So lets dig in. What does 6.7 Billion mobile subscriptions mean, then? They are not in reality all individual unique users, as we well know by now, many of us walk around with two phones, or others with one phone but several mobile accounts in the form of SIM cards. How many of the 6.7 Billion is the 'unique user' number? 4.3 Billion unique mobile phone owners/users on the planet. 60.1% of the true alive human population does have at least one mobile phone and at least one mobile account to themselves. Never has any technology been this widely spread. We are hitting the limits of electricity (600 million live beyond the reach of the electrical grid) and literacy (800 million adults are illiterate on the planet) yet even they do have mobile phone accounts. Some phones sold in the Emerging World are sold with extra-capacity batteries, other phones are sold with two or three batteries to help with the electricity problem. Vodafone introduced in Africa a charge that works on solar energy and for rainy days, through peddaling on your bicycle. And literacy? Yes, the illiterate won't be buying your smartphone apps anytime soon, but many voice-oriented services are highly appreciated delivering news, sports scores, music etc (and advertising) through the voice channel on the mobile.

ACTUAL PHONES - 5.2 BILLION IN USE

So then what of the phones? The planet has now 5.2 Billion mobile phone handsets in use, so for the 4.3 Billion unique users, so 26% of us - 1.1 Billion people already - walk around with two phones in their pockets. As I've been reporting on this phenomenon over the years, it is no longer a surprise in most markets. But yes, 5.2 Billion digital devices in human hands worldwide, every one of which can do voice calls and SMS text messaging. Most which have a color screen and often camera too. Most which can do rudimentary internet services (on WAP) and the vast majority which can do full HTML 'real internet' as well. While only 22% of all phones in use globally are 'smartphones' actually more than half of all phones in use can accept apps through such technologies as Java.

83% of all phones in use are cameraphones, so 4.4 Billion cameras are used in the world that are also connected to the network and are always carried, rather than the more premium stand-alone cameras that often sit in their cases back home. More than 90% of all humans who have ever taken a picture, have only done so on a cameraphone, not a stand-alone digital or film-based 'traditional' camera.

How massive is this? Mobile phones connected and in use totally dwarf any other tech, outnumbering television sets by more than 2 to 1, personal computers of all types, including tablet PCs like the iPad, by more than 4 to 1, DVD players by 5 to 1. Newspaper circulations by 12 to 1. Even after we account for us Westerners owning many FM radio sets, in our clock-radios, our boom boxes, our home HiFi sets and our cars, when counting for the whole planet, the number of mobile phones exceeds FM radios even, today. The second most sold consumer tech is the personal computer (including desktops, laptops and tablet PCs like the iPad) which has annual sales of about 350 million per year. The third most sold tech is televisions which only sell 250 million per year. Everything else is peanuts below that, from gaming consoles to cameras. But mobile phones? Sold over 1.7 Billion units last year! And by Christmas Quarter, nearly half of all new phones sold worldwide were smartphones. This year, 2013, we will see the cross-over point, where half of all new phones sold will be smartphones. No wonder the world's largest consumer electronics giant, Sony says that mobile is front and center of their future. Here is your table:

MOBILE SUBCRIBERS 2012
Total active mobile subscriptions or accounts . . . . 6.7B (was 5.9B in 2011, growth 14%)
Unique mobile users . . . . . . . . . . . . . . . . . . . . . . 4.3 B (was 4.0B in 2011, growth 8%)
Actual mobile phones in use . . . . . . . . . . . . . . . . 5.2 B (was 4.8B in 2011, growth 8%)
Source: TomiAhonen Almanac 2013
This data may be freely shared

INDUSTRY WORTH $1.45 TRILLION

So who is the richest man on the planet? No longer Bill Gates of Microsoft, it is Carlos Slim the CEO of America Movil the Mexico-based telecoms giant. Apple Computer changed its name to just Apple when it launched the iPhone and today calls itself a mobile company. Samsung the world's biggest tech company makes half of its profits through the mobile unit. Companies from Warner Music to Electronic Arts to the Associated Press newspaper guild are turning to mobile to make more money. The BBC said that all broadcast content, TV and radio, will be available on mobile. Visa says the future of payments, yes, the future of money itself, is mobile. What is this industry like?

Well, as the global economy struggled to get some anemic growth in 2012, the mobile industry grew its revenues by a massive 12% and hit 1.45 Trillion US dollars in total for the year. The mobile industry set the record for the fastest industry ever to reach that massive Trillion-dollar level (far bigger than for example the PC or TV or internet or advertising industries, just so you have some context). This global economic juggernaut is fuelled primarily by our voice calls and mobile messages (SMS and MMS) but there is an increasing part of revenues coming from 'premium data' services and also a healthy slice from hardware, in particular the handset sales. 3 out of every 4 dollars earned in the industry was service revenues, the remaining 1 out of 4 is hardware revenues ie handsets, their accessories, and the networking infrastructure needed to run these massive mobile telecoms networks. The major breakdown of the industry revenue is:

MOBILE INDUSTRY REVENUES 2012
Service Revenues . . . . . . . . .$1,101 B
 - Voice calls . . . . . . . . . . . . $  664 B
 - Non-messaging data . . . . . $  243 B
 - Messaging . . . . . . . . . . . . $  193 B
Hardware Revenues . . . . . . . $   350 B
 - Handset sales . . . . . . . . .  $  240 B
 - Accessories . . . . . . . . . . . $    65 B
 - Networking equipment . . . . $    45 B
Source: TomiAhonen Almanac 2013
This data may be freely shared


AVERAGE USER

So what do we do with our phones? I did the analysis of that statistic earlier, that we look at our phones 150 times per day. That gives a pretty good idea of where our time goes with the phone - messaging obviously, and voice calls, but also our clock and alarm, the calendar, our camera, the web browser, some games and music, news alerts etc. How do we use our phones? This is how I broke it down:

How Typical User Looks at Mobile 150 Times Per Day Globally
Messaging related 23 times per day
Voice call related 22 times per day
Clock 18 times per day
Music Player 13 times per day
Gaming 12 times per day
Social Media 9 times per day
Alarm 8 times per day
Camera 8 times per day
News and alerts 6 times per day
Calendar 5 times per day
Search 3 times per day
Other random web browsing 3 times per day
Charging phone 3 times per day
Voice mail 1 times per day
Other miscellaneous uses 10 times per day
Total 150 times per day
Source: TomiAhonen Almanac 2013
This data may be freely shared

MOBILE HANDSET FEATURES

Then we of course look at the handset side of mobile in the Almanac. I devote a whole chapter to the handset numbers including the highly popular chart updating the global mobile installed base of the 5.2 Billion handsets in use, by their features. How many have a color screen, or have a camera, or have WiFi, etc. Here are the top-line numbers:

POPULAR MOBILE PHONE FEATURES OF INSTALLED BASE 2012
SMS texting ability . . . . . . . . . . . . . . . . 100%
Any kind of browser (including WAP) . . . . 98%
MMS multimedia messaging capable . . . . 88%
Cameraphone (ie has inbuilt camera) . . . . 83%
Bluetooth  . . . . . . . . . . . . . . . . . . . . . . . 79%
3G capable or faster cellular connectivity . 45% *
WiFi . . . . . . . . . . . . . . . . . . . . . . . . . . . 26%
Smartphone . . . . . . . . . . . . . .. . . . . . . . 22%
 * note, many 3G phones in use are not connected to a 3G network, and even often if they are, are not on 3G dataplan pricing plans, so 3G user numbers are far below this installed base
Source: TomiAhonen Almanac 2013
This data may be freely shared

Much much more in the TomiAhonen Almanac 2013 including the penetration rates of touch screens, of QWERTY keyboards, the camera resolutions of cameraphones, etc etc etc, plus of course also the 'horse race' statistics of who sold the most phones last year by brand.

SMARTPHONE INSTALLED BASED BY PLATFORM

What of the mobile 'ecosystems' out there? You often hear of single quarter sales that may fluctuate a lot. Individual handset makers may shift their allegiances from one smartphone OS platform to another. What is the state of the industry now, by installed base of smartphone platforms. That is the 'bottom line' question, isn't it? I keep reporting the status of the installed base here on this blog as I do my quarterly review of the smartphone races. This is what the world looked like at the end of 2012:

Installed Base of Smartphones by Operating System 2012 (vs 2011)
1 (2) - Google Android . . . . . . . . . . 48% (31%)
2 (3) - Apple iPhone  . . . . . . . . . . . 19% (16%)
3 (1) - Nokia Symbian . . . . . . . . . . 15% (33%)
4 (4) - RIM Blackberry . . . . . . . . . . . 8% (12%)
5 (5) - Samsung bada  . . . . . . . . . .  2% ( 3%)
6 (7) - MS Windows Phone  . . . . . .  2% ( 1%)
7 (6) - MS Windows Mobile . . . . . . . 1% ( 2%)
Others . . . . . . . . . . . . . . . . . . . . . . 1% (3%)
TOTAL SMARTPHONES IN USE . . . 1,320 Million
Source: TomiAhonen Almanac 2013
This data may be freely shared

But there is so much more in the Almanac. I have whole chapters on mobile advertising and marketing, mobile music, mobile social networking, mobile TV and video, mobile gaming, mobile messaging - yes, of course this year's edition includes OTT messaging cannibalization measured - etc, etc, etc. I give you counts of apps and voice calls and enterprise/business accounts and 3G migration rates. The Almanac includes a whole chapter on the Digital Divide, so it shows how the advanced 'West' or Industrialized World mobile numbers differ from the 'Emerging World' where most people live, in Africa, Latin America and the less-developed parts of Asia like India, China, Indonesia, Pakistan etc. I also give more details on the business-side of this newest and fastest-growing Trillion-dollar industry ever, like my exclusive TomiAhonen Consulting index of mobile leadership that many seem to like and use.

WHAT COUNTRIES ARE THE GLOBAL LEADERS IN MOBILE INDUSTRY AND INNOVATION

Here is the newest top 12 ranking of the world's most advanced countries by their mobile industry, handset, consumer and services maturity:

WORLD'S MOST ADVANCED COUNTRIES RANKED BY THE MATURITY OF THEIR MOBILE INDUSTRY
1 (1) - Japan
2 (3) - Singapore
3 (2) - South Korea
4 (5) - Finland
5 (6 tie) - Taiwan
6 (6 tie) - Sweden
7 (4) - Italy
8 (9) - Hong Kong
9 (8) - Austria
10 tie (13 tie) - Denmark
10 tie (12) - UK
12 (10) - Australia
Source: TomiAhonen Almanac 2013
This data may be freely shared

And yes, the USA is gaining on that chart, and has moved up from its rank last year of 17th to its current ranking of tied for 15th with the Netherlands, just ahead of UAE, and just behind Israel and Norway. But when the USA is barely past its 100% per-capita mobiel subscriber count - and Hong Kong for example has passed 200%, or the USA is near 50% smartphone ownership where Singapore is past 80%, and where the USA still sells handsets and subscriptions to second generation 2G network based technology while Japan has shut down the 2G networks and is all 3G or faster, obviously there are other countries that are well ahead of the USA in their mobile industry. Harsh truths, but we deal with the truth on this blog. And yes, for those who do not know my index, I use the four most used and most representative statistics on the maturity of the industry, to generate my index: the mobile phone subscription penetration rate per capita; the migration rate to more advanced networks, the mobile service adoption rate, and the migration of the handsets to more advanced phones (ie currently measuring the migration from dumbphones to smartphones). And most international mobile industry experts will agree that Japan, Singapore and South Korea are world leaders in mobile, and that Finland, Sweden and Italy are the European leaders, where the Industrialized part of Asia and advanced parts of Europe are well ahead of North America, Latin America and Africa in their mobile adoption and yes, Australia is well ahead of North America as well. By the way, the Almanac has much more on the index and the top 30 countries if you need more.

But there are much much more data points in the Almanac, including a stats table section where we have the 60 biggest mobile countries and details on them like their subscriber counts, penetration rates per capita, and exclusively, also their unique mobile owner counts, plus such data as what countries have launched 3G and what have launched MVNO services etc. There are tables of what countries lead by subscriber counts, by penetration rates, by 3G migration rates etc. And there is the list of the biggest mobile operator groups.

WHO ARE THE GIANT COMPANIES OF THIS TRILLION-DOLLAR INDUSTRY?

And as always, the TomiAhonen Almanac includes my exclusive listing of the world's largest companies, when measured only by their mobile revenues. So for example for Apple we remove the Mac, iPad and iPod related incomes, for Vodafone we remove their fixed landline business and for Samsung we remove their plasma TV business and chips business, etc. What are the world's largest companies in 2012 when we only measure their mobile business? This is what the top 10 looks like for 2012:

BIGGEST COMPANIES WHEN ONLY COUNTING THEIR MOBILE BUSINESS
(This chart data is harmonized for the annual release of the Fortune Global 500 issue)
(Data is current as of the second calendar quarter of 2012 ie through about end of June 2012)
1 (1) China Mobile, China, operator . . . . . . . $ 87 B
2 (2) Verizon Wireless, USA, operator  . . . . $ 75 B
3 (9) Apple iPhone, USA, smartphones . . . . $ 74 B
4 (10) Samsung Galaxy, S Korea, handsets . $ 69 B
5 (4) AT&T Wireless, USA, operator . . . . . .  $ 62 B
6 (3) Vodafone Mobile, UK, operator . . . . . .  $ 60 B
7 (5) Telefonica Movil, Spain, operator . . . . . $ 55 B
8 (11) NTT DoCoMo, Japan, operator . . . . . . $ 48 B
9 (6) T-Mobile, Germany, operator . . . . . . . . $ 47 B
10 (7) Orange Mobile, France, operator . . . .  $ 46 B
Note: All except China Mobile in the above chart are 'virtual companies' with imaginary names to reflect their mobile businesses and their mobile branding.
Source: TomiAhonen Almanac 2013
This data may be freely shared

The above data shows how strongly Apple and Samsung have already jumped up the charts powered by their smartphone businesses (and by contrast, the once giant 'Nokia Mobile' has tumbled down to 12th and is falling further). The European operators/carriers saw their industry hit by the new EU regulations that cut their international interconnect revenues, so all Europe-based carriers/operators saw a bad fiscal year and their rankings tumbled for the year. That should stabilize now for the next year. And as to Samsung and Apple, remember, their phenomenal growth is continuing. This data was through only the second calendar quarter of 2012, to harmonize this chart with the annual Fortune Global 500 issue. So the two smartphone maker giants are sure to move up even more for next year.

So there is your summary data for the industry for big industry numbers. This year, two huge milestones coming - the Mobile Moment will hit us this summer, when the count of active mobile subscriptions will match the count of human population alive on the planet, and also probably in the summer, we will reach the point where half of all new phones sold will be smartphones.

As always, you may share and use any data in this blog, create your own diagrams and pictures, use this data in infographics etc. Please refer to this blog if you can, or just list that the source is the TomiAhonen Almanac 2013.

And for those who want to see it, or order it, remember the Almanac only costs 9.99 Euros and you can have all these stats - and literally 91 more charts and tablets not mentioned in this blog (the latest Almanac has 98 tables and charts in total) - on an ebook you can install onto your smartphone, iPad or laptop and carry all the mobile data at your fingertips. For those who already own the 2012 edition, all the data is updated obviously, and new charts in the 2013 version that weren't in the 2012 edition are: 150 Times Per day (in mobile Customers chapter), a chart showing MMS migration rate from SMS and another showing OTT cannibalization are new, while the OTT user count is added to mobile messaging user chart (in Messaging chapter),  the Social Networking chapter adds a table of the biggest social networks when measured by their mobile users. The 2013 edition of the Almanac runs 194 pages. To see more here TomiAhonen Almanac 2013. 

The Nokia Catastrophy in Single Pictures: Today the Ultimate Picture, Number 9: The Misery Graph - here is how Nokia's destiny is seen from the future

Over the past two months or so, I have been chronicling the Nokia disaster of the past two years, in short blogs, of one topic, one picture. Today we do the Misery Graph. But yes, before that, brief summary of this series. So far we've done 8 pictures so far -  the Nokia smartphone sales collapse due to Elop Effect, the competitive picture of Nokia vs Apple and Samsung, Nokia market failure in context of other handset collapses, the failure of the migration from Symbian to Windows Phone, the disasterous Lumia sales pattern with Windows Phone, the Revenue Collapse in Nokia's handset business, the CEO delusions: When was Nokia truly burning, and when was it safe from any platform fire? and the Extent of the Failure in Elop Strategy Promise vs Delivery 

That was the first 8 pictures. Today we do number 9 in the series, and today's is perhaps the single most important picture of them all. This is the ultimate test for Nokia, how Nokia will be remembered decades into history. When people look back at Nokia of this time, this is the one decisive factor, the one picture, the one measure. It is what I call the Misery Graph.

Nokia faces a 'paradigm shift' in the technology space. The total market of what we now call 'dumbphones' or Nokia sells as 'featurephones' will be shifting to something else, called a 'smartphone' Sometimes industries see total such shifts, as we saw for example in televisions from black-and-white TV sets to color TV, and then again, from picture-tube based CRT TVs to flat screen televisions of today. These are total industry shfits, if you do not capture the shift, you die. Like the world's biggest TV makers RCA and Philips back in the days of black-and-white TVs and color TVs, who are gone from making TVs today, replaced by Sony and Samsung. Other technology evolutions, while revolutionary, are not 'paradigm shifts' because they do not shift the whole industry. Diesel engines in cars, jet engines in airplanes, did not end other engine types like gasoline engines in cars, propeller-driven planes, even as their proportion has kept growing. So you can safely survive as a car maker not offering diesel engines, or being an airplane maker without jet engines. Maybe your market is not as big, but that is viable. Trying to sell black-and-white TV sets is not.

The handset industry saw its first paradigm shift already, going from analog to digital phones. Motorola was the giant handset maker in the analog days, Nokia came and grew strong with digital phones, and Motorola fell from the top by not capitalizing fast enough on the new digital phones and their new non-voice capabilities such as SMS text messaging and rudimentary mobile internet services. Motorola withered and died and was bought by Google.

Now the handset industry faces its second such total paradigm shift, from dumbphones to smartphones. Right now, latest data from Q4 of 2012, has the world transition having reached 46%. It will pass the 50% level - meaning half of all new phones sold will be smartphones - soon this year, 2013. Eventually all phones will be what we now call 'smartphones' and the dumbphone market will vanish. So how is Nokia doing in this transition?

Nokia was doing just fine. Nokia in fact invented the smartphone. Nokia was punishing its rivals, the other dumbphone makers like Motorola, LG, SonyEricsson, Siemens, Panasonic, Sharp and Samsung - pushing them into loss-making or quitting the handset business while Nokia made a profit every single quarter of every single year, in its smartphone unit. Nokia invented the smartphone, and Nokia kept safely ahead of the industry migration rate - not too far ahead, but about 4%-5% ahead of the industry migration rate, as Nokia helped its customers transition from using dumbphones to smartphones, while safely holding onto its massive global lead in handset sales.

Nokia was such a master at this transition - that differing from every other rival dumbphone maker attempting this transition - only Nokia was able to GAIN market share while migrating customers from dumbphones to smartphones. Yes. Nokia's massive global market lead in total handsets, fuelled at the time by dumbphone sales, was actually improved when shifting customers to smartphones. And yes - Nokia's smartphone unit was profitable doing this!

By every textbook measure, this was the very definition of success in a technology migration. Nokia not only saw the transition coming, Nokia invented it, and then dominated the whole transition process, where Nokia, the world's largest handset maker, actually had a bigger lead in its smartphone - future handset business - than the massive lead it had in the dumbphone business. This, done profitably, is what success looks like. This is what Nokia will be measured upon, and Nokia was doing it brilliantly. Spanking such global tech giants as Sony, Samsung, Motorola and LG in the process. Wow.

Then came a clueless new CEO who decided to snatch defeat from the jaws of victory. This is what happened.




This slide may be freely shared

Nokia's global sales did not disappear. Nokia customers keep coming back. Its the transition that suddenly failed. What were highly desirable, well-selling, well-designed 'world phones' that Nokia sold, at a wide price range, in vast array of functionality and features, from world's best cameraphones to QWERTY sliders to advanced operating systems like Maemo and MeeGo, Nokia was the ONLY dumbphone maker in 2010, whose loyalty was so high, most who owned a Nokia wanted another. Only Apple and RIM/Blackberry - both pure smartphone makers - had better loyalty at the time. Nokia was winning the transition. 

Then new CEO Stephen Elop decided to badmouth his own smartphones as uncompetitive (the notorious Burning Platforms memo, the costliest management memo of all time) that caused what is called the Ratner Effect. When a CEO says his own products are bad, he is believed, and sales collapse overnight.

And the new CEO Elop also decided to utilize another corporate-suicide trick, the Osborne Effect by madly announcing his new Microsoft partnership in February of 2011, when he had no Windows based smartphones to sell until November. This of course collapsed existing sales, just like with the Osborne computer company and Nokia smartphone sales set a world record in sales crash in one year. These two effects, when combined (they happened within 3 days of each other in early February 2011 is what I coined as the Elop Effect and increasingly that is seen as the dumbest management communication attempt of all time, causing the single worst destruction of any Fortune 500 sized company business, in human economic history. Yes, this is far worse damage to the company, than what Coca Cola did with New Coke or the Ford with the Edsel or the BP Oil Spill or the brakes disaster at Toyota.

So Nokia was strongly leading the transition to smartphones. Now under Elop Nokia is regressing and fast. The industry transition for the year 2012 was 39% to smartphones, Nokia was down to 10%. If you think it was getting better at the end of the year, no it was not. By Q4 the world transition level was at 46% and Nokia's migration rate to smartphones was down to 8%. Nokia is truly going in the suicidal direction of this industry.

How can I put it in clear terms. Imagine if Philips or RCA saw the new color TV's taking off, selling well, and suddenly deciding, no, thats not the future of televisions, we shut down our color TV production and do only black-and-white TVs.

Or more recently, if Samsung or Sony looked at their TV sales shifting from the bulky CRT based TV-tube type of television sets, and saw customers preferring flat screen TVs and then they shut down their flat screen production and pushed bulky picture-tube TV sets instead? How mad would that be?

Or what if Panasonic and Sony and other video cassette recorder makers, had seen the success of DVD players, and then - as DVD sales are exploding, suddenly decide to shut down their existing DVD player production, and shift their business to VCRs intead?

I could go on. Rotary dial phones? Analog cameras? Wrist watches that you wind manually to make them run? Dot matrix printers? 

There are already operators/carriers like Safaricom in Kenya who say they will stop selling featurephones altogether. They will only sell smartphones. Yes, the world will pass this year, 2013, the half-way-point, where half of all new phones sold are smartphones. Nokia was far ahead on this transition. Now they are literally selling or shutting down smartphone factories, and Elop is introducing ultra-low-cost phones that cost 15 Euros/20 dollars to sell the superdupercheap phones. Dumbphones. This will be the classic case study in how to abandon a sure victory, how to snatch defeat from the jaws of victory, how to set up a certain road to the future, and then gift that to competitors and refuse to take that road yourself. This graphm the Misery Graph is not just what Elop will be known for in all eternity as the biggest Business Failure in history, but also how Nokia will be known. How they voluntarily abandoned certain victory.

In the long run for Nokia survival and success, nothing matters more than this one picture. The whole handset business will transition away from dumbphones and 100% to smartphones. This is now no longer under any argument or disagreement. The price points of smartphones are coming down and squeezing the dumbphones out of the market, it is only now a matter of time. Nokia's only measure ten years from now, like we look at Motorola in the digital transition, is will Nokia be able to win in the transition to smartphones - as it was winning - or will the story be, that Samsung came and took Nokia's candy while the CEO madly pursued low-cost featurephones and missed the transition to smartphones. The only thing that matters for Nokia's history is whether this transition was successful or not. It does not matter what awards some Lumia phone won or lost, what carriers it attracted or not, was the Windows ecosystem the third or fifth or whatever, what profits Nokia pretended to earn in a quarter by selling its HQ building or its Salo campus, etc. The only thing Nokia will be remembered for, ten years from now, is did they win or lose the transition to smartphones. In 2010 Nokia was safely a full 5 points of migration rate ahead of the industry, Nokia had migrated 23% of its phones to smartphones, while the industry was only at 18%. Now at Q4, the world has gone to 46% and Nokia is down to 8%. This is how Nokia will be remembered, it lost the transition. The clown in charge was the management fool named Elop, worst CEO of all time. Because Elop lost that race, he has to be fired for that reason alone (not to mention all his other madness)

Why is Elop allowed to remain in control of Nokia? Why is Nokia's Board allowed to remain in control?

And there is still more to this Nokia disaster, more pictures and stories to come.. This is so sad, seeing Europe's biggest tech giant destroyed by a delusional Canadian madman who wants to shift the inventor of the smartphone, Nokia, back to the 1990s. 

LG buys Palm, Firefox spreads, Tizen phones in July, and other observations in Smartphone Bloodbath Year Four, Smartphones Galore

So we have lots of news coming from Barcelona MWC (and to be clear, I am not there in person, I am monitoring via new sources). So its the Smartphone Bloodbath year Four: Smartphones Galore, and perhaps that should be 'Ecosystems Galore' haha.. The space in the OS wars keeps spreading. So lets cover a few big news items. 

LG BUYS PALM FROM HP

So in ecosystem news, this is the biggest today. LG bought the Palm WebOS unit from HP. If you ever wanted to see whats next for Palm, if you thought WebOS didn't deserve to die, now it has a chance to come back. LG is not really big enough to go it alone, they need now partners to provide handsets, but where LG bought its own OS, is a clear sign LG wants to be seen as a top-tier smartphone maker with its own OS, like Samsung, Apple, Blackberry, Google/Motorola (and until recently also Nokia). And thus separate itself from the second tier makers like Huawei, ZTE, Sony and Lenovo (and now also Nokia) who are totally dependent on others for their smarpthone destiny.

Two interesting developments - how long until first LG 'Palm' device is announced & released. They might be able to do it in 15 months, with Korean efficiency and 'balli-balli' philosophy or hurrying-hurrying... So first LG phones with WebOS out perhaps in summer 2014, and the hype to start around end of year 2013. What LG would dearly love, is to find a few hardware manufacturers to commit to WebOS. Remember, this was once rated as good as the then-current iPhone and iOS platform (3 years ago). So LG does gain a potentially competitive platform, but they must find partners to make the ecosystem play work. LG is no Samsung (or what Nokia was) in scale to be able to support an OS just by its own sales - like Sammy did with bada in the past few years.

FIREFOX SPREADS

And Mozilla's Firefox OS is now blasting the industry with an ever more impressive lineup of carriers (they had plenty of those already) and now, many handset manufacturers. At MWC we've already heard that Huawei, ZTE, LG and Alcatel will provide Firefox handsets - this year. Huawei is the world's third largest smarpthone maker, ZTE and LG are Top 10 makers, so Firefox now has a nice portfolio of handset makers in its stable. The little fly in the ointment is that LG just bought Palm, so don't expect LG to fully ever embrace Firefox, but early on, even one LG phone is good enough for Firefox to claim 3 of the 10 largest handset makers supporting their OS.

The main points with Firefox lie in 'how mobile' is the OS. Mozilla is an internet company, we've seen what mistakes for example Microsoft had made, time and again, taking USA West Coast lessons and attempting to force those into its mobile strategy (a strategy Microsoft Chairman Bill Gates has just admitted last week that it has been a mistake). A first-edition OS is rarely solid and complete. Firefox will be compared to Tizen, which builds on the hugely admired and beloved MeeGo OS by Nokia and Intel, the only OS that ever was consistently rated better than the iPhone. If you take that, MeeGo, already better than the iPhone, and now evolve it further, combining Samsung's bada competence and knowhow into the MeeGo project, with Intel's Moblin background, expect Tizen to be the most complete and 'mobile' of any new OS this year - and the one rated by all analysts as 'by far' the best. And Samsung is trying to find the same handset maker ecosystem to Tizen with Huawei there already plus Panasonic and others. So for a Huawei, who already does Android, if the Tizen OS is proven to be far more robust, advanced and complete, than Firefox, we might see Huawei preferring Tizen over Firefox. But we don't know, and the operators/carriers will have a lot to say on which OS and which manufacturers they decide to support... Still, Firefox is moving into a strong challenger position now with the impressive supplier lineup.

TIZEN PHONES OUT IN JULY

Samsung is promising first Tizen phones as early as July or August and saying there will be several this year. Much of what I think was in the above paragraph, Tizen will be a success simply on Samsung's own push alone, and will be bigger than say Windows or Blackberry in two years, simply because Samsung will promote it as one of its OS platforms (and migrating/converging bada into Tizen). What Samsung and Intel need with Tizen is then many handset makers and carriers/operators embracing the OS, which is likely to be easier than Firefox, where carriers/operators like NTT DoCoMo for example are on the Tizen Board, and the legacy of the OS, being an upgrowth of something very well mature, developed, and highly competitive if not supreme to other OS platforms. Expect a lot of the tech buzz this year being between Tizen and Firefox

WINDOWS NO TRACTION

And yes, we heard last week Bill Gates admit that Microsoft had seen the smartphone revolution, was in it early, but the strategy they adopted had prevented Microsoft from gaining scale. Windows Phone has failed and Bill Gates used the words it is a mistake. Now we heard last week (before the Palm purchase) that LG for example said, they will not bother to make more Windows based smartphones until there is some demand by carriers/operators. Obviously the carriers/operators do want a third ecosystem, but after two years of Steve Ballmer and Stephen Elop hard-selling Windows ("with Skype included, of course") at the operator/carrier community, with the biggest marketing budgets ever, the overwhelming response by the carrier community is rejection. Yes, they'll take the money, then not sell the phones. The Windows strategy is dead. But its no surprise to my readers, I told you so. And now, once again, we hear from yet another Windows partner - LG says there is no traction from carriers. 

NOKIA CLAIMS ITS NOT ME-TOO

Elop continues to play the Bush-Cheney strategy. Look at blatantly obvious facts and steadfastly simply deny deny deny. In January 2011, just before Elop announced his mad Microsoftian strategy, Nokia had the most differentiated smartphone strategy on the planet. It had smartphones with the best camera on the planet (N8) - far better than what Apple offered on the iPhone. It had smartphones with full QWERTY keyboards similar to Blackberries - something Apple refuses to offer. It had touch-screen and QWERTY slider hybrid phones like the highly praised E7, the latest 'communicator' a model of smartphones far more expensive than the iPhone, with astonishing tech that the iPhone didn't match, and yes, a QWERTY slider in addition to the touch screen. Nokia offered the most open ecosystem, something Apple didn't, and had the most connectivity from FM radio broadcasting to NFC to microSD slots to unrestricted Bluetooth - things again that Apple's iPhone didn't offer. In January 2011, Nokia was THE most 'not me-too' smartphone maker on the planet, selling smartphones far more expensive than the iPhone to smartphones far far FAR cheaper than the iPhone. 

Now we have seen 11 smartphones launched in the Lumia series. Not one of them has a camera that even matches the N8, or is anywhere near the best in the world today (Nokia's Symbian-based 808 Pureview, launched last year). Nokia is now in the same 8mp class as.. the iPhone. Nokia abandoned its QWERTY advantage, even as more than 1 in 4 smartphones sold by Nokia (and many more dumbphones) had QWERTY and Nokia would have a huge loyal customer base eager to buy one, yet of the 11 Lumia phones so far, not one has a QWERTY or hybrid with QWERTY slider/folder. Nokia had the most open ecosystem and was far beyond Apple, today it uses Windows, the only ecosystem on smartphones more restrictive than the iOS !! And what of connectivity? Yes, some Lumia series have been adding some connectivity options but many in the series are as unconnectable as the iPhone, and none are as broadly connectable as say the Nokia N9 (running MeeGo) or the Nokia 808 Pureview (running Symbian). So in reality, every Lumia is ever increasingly like an iPhone, often a more cheezy plasticky version, but all are same form-factor, thin slab touch-screen only large screen smartphones - similar to iPhones. Nokia abandoned all its differentiation opportunities and is purely now a 'me-too' provider. If you wanted an iPhone with some more colors, there is Lumia. Or if the iPhone is a bit too expensive, but you'd like a new phone that is very much like an iPhone from two years ago, Lumia has some cheap versions in some cheesy colors to let you have that. i-Phon-a-clones is what I call them. Elop clearly has made Nokia into only a me-too provider, abandoning markets worth millions of sales per quarter, and regions where other form factors are highly praised, in his search to try to make his Lumia company look exactly like Apple iPhone (minus the loyalty, minus the revenues and minus the profits, obviously).

But it should tell you something about how deluded Elop is, that he gives an interview promising Nokia is not a 'me-too' smartphone provider. He is delusional, that means madman. That means, he looks at reality, refuses to see facts, and substitutes his own imaginary world in the place of reality. That is delusion. That is what Nokia CEO proves to us, when he claims Nokia is not a me-too company, when Elop's own actions abolished all major differentiation abilities. Don't expect Nokia to recover from this madman (and why is Elop allowed to continue to ruin this company. The only reason the handset unit 'generated a profit' in Q4 was because Elop sold the HQ building and then attributed all its revenues to the handset unit, rather than accross all Nokia divisions evenly. Now he's sold the Nokia Oulu technology campus in Finland, is that so he can create another fictional profit for his handset unit for Q1?)

By the way, did I tell you its all about the retail distribution/carrier relations? Here is Stephen Elop yesterday in YLE interview (Finland's biggest broadcaster) and its short English version news item - what does Elop complain bitterly about - once again - its the lack of sales support to his beloved and so utterly doomed Lumia phones. The market says loudly 'we do not want it' and refuses to sell it, but Elop keeps spending money to do new 'me-too' variants of Lumia, rather than abandoning Windows like the channel wants, and get sales growing again for Nokia. When Elop took over, Nokia sold 34 million smarpthones per quarter. In its latest results, Nokia sold 6.6 million smartphones in the quarter. That, my dear readers, is market failure. Its not because the phones are miserable with exploding batteries and antennagates and lack of apps, its because the retail channel says - no way. We will not support this platform. Elop heard this in 2011, he admitted it to the Nokia shareholders in May of 2012 and now its February 2013, and Elop cries the same song once again 'my retail sales guys are not selling my phones....' - get over it Elop. Windows Phone is dead. The sooner you quit the dead platform the sooner Nokia can start to recover.

JOLLA COMING

We are expecting news from Jolla and sailfish, it might be the coolest must-have phone of the year when it launches. But so far, nothing yet. Hopefully we'll learn soon

SONY NEEDS MOBILE

Sony CEO Kazuo Hirai said in an interview for the BBC that mobile is 'front and center' for Sony's consumer electronics business. Also that Sony had strong assets it could and would use to be one of the biggest players in mobile. Sony is currently a Top 10 sized smartphone maker and currently offers only Android based smartphones (left the Windows ecosystem after the carrier boycott relating to Skype). Now I would expect the delegations from Tizen, Firefox, LG/Palm, Ubuntu and Sailfish are making regular pilgrimages to Tokyo to try to bring Sony to their camp.

BB10 MIXED NEWS

Blackberry (ie the company previously known as RIM) is receiving mixed news in the first quarter of sales for the BB10. In some news the phone is highly desired and selling very well, in some other news the response has been lackluster. It will be interesting to see what kind of results we get when Blackberry reports this quarter sales in March.

Plenty more to come, as we get in the news from MWC in Barcelona.

For anyone needing more info on the mobile industry, if you are interested in the opinions of the most accurate forecaster of this industry, remember buying the Almanac 2012 will get you the Almanac 2013 also for the same one price, now before the Almanac 2013 is released. And those who need info specifically on the handset industry, my TomiAhonen Phone Book 2012 is your resource with all the facts, stats and numbers.

Early Thoughts on New Operating Systems - Ubuntu, Sailfish (Jolla/MeeGo), Tizen (Samsung's update to MeeGo), Firefox; and some updates to classics BB10, WP8

This year 2013 will see several new smartphone operating systems launched. This blog is my first overview to these new arrivals, and is in response to perhaps the most requested commentary by me, from my Twitter followers in the past few months. What do I think of Ubuntu or Firefox or Sailfish or Tizen.. (or Blackberry 10 or Windows Phone 8)

Some might think this is 'too late' and that the market is 'already settled' into the duopoly that is Google's Android, and Apple's iOS (which according to Strategy Analytics held 92% of the smartphone market in Q4. My calculations have the pair with a little bit less, but still, they are the two giants currently). That may seem reasonable, until you understand the scale of the market and the near future. Smartphones sold a little over 700 million units in 2012, up 45% from just one year before. Smartphones now sell about twice the level that personal computers of all type sell per year (that includes the tablet PCs like the iPad), and almost three times as many as television sets globally. This must be 'too late' for a new operating system to enter and become big, isn't it.

No its not. The total global handset industry sells about 1.8 billion handsets per year (ie most of those were still 'dumbphones' in 2012, and only about 39% of those were smartphones. The handset industry experts have joined me in my originally quite radical view  that all handsets would become 'smartphones' - and my view is that this transition will be completed (in new handset sales, not in installed base) before this decade is done. The annual sales of handsets will likely stabilize near the 2 Billion per year level, so we have something near 1.3 Billion annual sales growth left to do for smartphones - almost two times as much unclaimed, as the total market size in 2012.

This IS the right time to get in, if you ever wanted to be a major player in smartphones, whether on the hardware or the software and operating system size. During 2013 will we be somewhere near 1 Billion smartphone sales and about half the potential is taken. After that, it will become increasingly hard to break into the market, and probably by 2015 it will be too late.

Thats not to say, that Android isn't in the driving seat. Android was powering 70% of all smartphones sold in Q3 of 2012 and Android is used by seven of the ten largest smartphone makers, while the three others in the top 10 use three separate and incompatible systems. Android is the obvious big target and Google has played the smartphone opportunity remarkably well, so far. Apple had a strong growth trajectory in gobbling up huge chunks of market share until that growth bonanza stalled two years ago, and Apple's gains have been anemic, one or two market share points per year since. It is high time for Apple to either launch a lower-cost iPhone (what I call the iPhone Nano) or else abandon any hope of being a major player in the races, and becoming a niche maker similar to what RIM/Blackberry has become. The race for the smartphone market is mostly one of low-cost mass-market mainstream basic smartphones, not the high end of the iPhone 5 and Samsung Galaxy S4.

HOW YOU WIN IN SMARTPHONES

There will be lots of techie 'experts' who bring their 'insights' into explaining why one OS is better than another, why its UI is more appealing or its app selection is the winner, etc. They are clueless. We saw how badly these experts misunderstand the handset market, from all the forecasts made in 2010 about what will happen to Nokia smartphone sales in 2012 as the new Lumia Windows Phone strategy is implemented (experts had errors of the scale of 200% and more, the worst 'expert' organization had a forecasting error of 332% !!!). That is not an isolated example, I will shortly be reporting on how badly the tech pundits and experts misjudged the launch of Windows Phone and the Microsoft market share for 2012 (can you believe, errors up to 400% !!! ???)

Smartphones may look like tiny pocket-sized computers, so many PC industry experts are quick to offer their 'insights'. They do not know, that this industry operates on totally different market rules than the PC market. Handsets are technically approved, and supported by the carriers/operators, who act as gate-keepers to all markets. If you do not have carrier support, you cannot win in a market. Witness Apple's iPhone for example, or Microsoft's Kin (forgot about that one, did you, the phone that died in six weeks from launch, because no carriers would support it). 

In smartphones the best handset or best operating system or best app store does not win. They all are important, yes, but they are not the key to winning. Else in 2010, Apple's iPhone would have crushed Nokia's Symbian, because by every measure, in 2010, the iPhone was the better smartphone than then-current Nokia flagship, the N97; the iOS was far better than Nokia's first iteration of its aging Symbian OS attempting to do touch-screen; and the Apple iPhone App Store had more apps than Nokia's Ovi store. Why then did Nokia outsell Apple by 2 to 1, and more importantly, Apple grew 22.4 million smartphone unit sales from 2009 to 2010, but Nokia grew 35.8 million. How is it possible that a clearly inferior product line, on an inferior OS and UI, and a smaller app environment, can grow more than the better one? Its not about whose phone or OS is better in smartphones. Its about the carrier relationships (and related retail distribution). Nokia had by far the best carrier relations and retail distribution in the mobile handset industry at the time, Apple did not. So Nokia was able to sell an inferior product but get bigger growth - because of carrier relations and distribution.

Again, this is no anomaly. Look at Palm and the WebOS, the best smartphone and OS this side of an iPhone. It died. Being best does not give you the world. Or Samsung's bada - my apologies to all my Samsung friends, but bada was hardly the most exciting most advanced most capable OS. Yet it sold 20 million units in 2012. Why? Because Samsung currently has the best carrier relationships and widest distribution channel reach of any handset maker in the world.

Please do not misunderstand me. I am not saying the handset design doesn't matter, that the user interface doesn't matter or the app store doesn't matter etc. I AM saying, that they will not decide your success. The decisive factor is carrier support, the second most important factor is resale distribution deals. Of course a good OS is better than having a bad one, that the iOS is so user-friendly that a 3 year old understands how to use an iPhone, and so does a 93 year old, without reading any user manuals - that is why Apple's iPhone has such fiercely loyal customer retention rates. But that is mostly loyalty and retention (Nokia used to have that too, with its messaging, its cameras, its QWERTY keyboards, its FM radios etc..). The key to gaining market share - especially for a new brand - is carrier support and retail distribution. Carrier backlash is one of the biggest reasons that has caused Blackberry to decline sales in past two years. Carrier support is why Huawei has been so successful in gaining big chunks of market share globally (partly helped by the fact that Huawei can bundle handsets in a network equipment deal, like Nokia and Ericsson often did in the 1990s).

UBUNTU NOT CONTENDING

So first up, Ubuntu. The Linux based open source OS with strong African roots is celebrated by many tech fans and PC experts as an obvious choice for smartphone makers, especially those sick and tired of the Microsoft Windows dominance on the PC side, and suggesting that PC makers should feel a natural affinity to the OS. Yeah, well, you don't win by having an OS that is popular on the far smaller desktop world, else Windows would have 90% of the smartphones market. Rather, after literally a decade of trying, Microsoft's smartphone platform has managed a peak of 12% global market share and today lingers at .. 2% in annual sales. There is no 'synergy' between the desktop and the pocket. HP was the latest victim to discover this when it tried to create some synergy for Palm that it bought, using WebOS, and the world's bestselling PC brand, HP. Lenovo learned this lesson, it released its smartphones using Android instead, and in one year climbed into the Top 10 biggest smartphone makers, and now, in Q4 is ranked either 5th or 6th (racing with Sony, we have not seen Sony's numbers yet).

Ubuntu will need two big hurdles. First, it needs support by major handset makers, it should attract at least one of the Top 10 manufacturers, preferrably more than one, to have any chance. They, the handset makers, have to commit to a couple of handsets that run Ubuntu OS, and then - the most difficult hurdle, Ubuntu needs to secure carrier support where several significant carriers agree to support the new handsets using Ubuntu. This is not an impossible task but it is a huge task. The schedule for Ubuntu calls for first phones to be available about a year from now. So far, we have not seen the news that needs to happen. This is why I am not currently taking Ubuntu smartphone aspirations very seriously (yet). They have to get these deals into place, to even be 'entered into the race'. They are like someone in the Olympics, who is not even allowed to line up to the starting gate yet. Ubuntu has not qualified for this contest. They might do it, they have to hurry, but so far, they haven't.

FIREFOX VERY DARK HORSE

Then we have Firefox. The web browser company Mozilla has been working on its smartphone OS, as an open source HTML based platform, and has been making the early needed steps. ZTE, a Top 10 sized smartphone maker has announced it will introduce a Firefox based smartphone now in February at the Mobile World Congress in Barcelona. There is a tiny start-up smartphone maker Geeksphone of Spain who has announced two Firefox based smartphones. So there is a little bit of handset manufacturer support but the handset offering is still slim. Meanwhile, bigger hurdle, the carrier support? Thats not yet there. There is some gossip that 'a European carrier' might be interested and KDDI of Japan has said it is looking into possibly doing some Firefox in its smartphone offering, but no carrier deals yet. But Firefox has achieved 'support' by a good list of carriers such as Telefonica, TIM, T-Mobile, Sprint, Etisalat, Smart and Telenor. That is not the same as a carrier actually launching the phone and is a far cry from selling it in its stores or offering any handset subsidies to the smartphones. But Firefox does have handsets coming now, and many carriers are in discussions. Firefox could be a dark horse to have a tiny slice of this pie going into 2014. What is very much needed now, is more than one handset model by one Top 10 manufacturer.

SAILFISH (ie MeeGo 2.0 version A) PRETENDER

Jolla the Finnish start-up made of ex-Nokia staff from the killed MeeGo/Maemo project, is in a similar stage as Firefox, but on a very different trajectory. Jolla is stepping into the shoes vacated by Nokia in abandoning the hugely admired N9 and N950 smartphones running MeeGo. The N9 is the most heralded Nokia smartphone of all time and the only one that regularly beat the iPhone in side-by-side tests by major handset magazines and comparison websites. The N9 was headed to huge global success, until bizarrely the Nokia CEO decided it will not be sold in any major markets and will not be allowed to compete against the iPhone for example not being sold in the USA, UK, Germany etc. The N9 running MeeGo won the world's most prestigious technology design awards the D&AD Award in 2012, beating Apple's brand new iPad 2 among its rivals for the award. The German weekly newsmagazine Der Stern loved the N9 so much, it encouraged its readers to fly to other countries like Switzerland and Austria to buy an N9, it was that good in the magazine's opinion (yet Nokia refused to sell it in Germany??). And as Nokia refused to sell the sister phone, the N950 anywhere, only producing a very tiny run of the device, its second hand resale prices are above a thousand Euros. Nokia had a huge flagship hit product on its hands, when it had the N9 and N950 running MeeGo, yet Nokia abandoned this massive tech lead.

So enter Jolla. Jolla was formed with the help of Nokia's employee departure program and some seed funding, and took the insights and design ideas that the MeeGo/Maemo team had with the N9, N950 and other MeeGo devices, and builds upon that. Their new Sailfish OS is an evolution past MeeGo, still as an open source Linux based OS, and one could think of Sailfish as a kind of MeeGo 2.0 (version A). Sailfish is compatible with the (formerly Nokia owned) Qt application development tools and some gossip suggests the similarity between Sailfish and Android is so close, many Android apps can run natively on Sailfish. If so, Sailfish would almost overnight jump over that hurdle of 'how many apps do you have' and inherit a part in the biggest app environment that Android is now becoming, passing the iPhone App Store.

The point with Jolla is, that it is not attempting (at least initially) to be a mass market brand and platform, but rather a premium OS at the high end of the market, competing with the iPhone and Samsung Galaxy, perhaps even aiming into the price stratosphere where Vertu exists. Considering how strong the passions were for the N9 and N950, and as the N9 was the only smartphone by ANY BRAND that regularly beat the iPhone in side-by-side tests, this is not a hopeless fantasy. The Jolla staff of about a 100 employees are essentially the same as the heart of Nokia's MeeGo team. So what we will later this year see from Jolla's first smartphone(s) are what probably could have been the 'follow-up' to the N9. The first Jolla phone may well be the ultimate superphone of year 2013 and get massive attention because of that.

Then, its their business model. To price the Jolla high enough to be able to skim those profits and slice a piece of the high-end that Apple's iPhone and Samsung's Galaxy own. Jolla doesn't need to sell 10 million in the first year to be successful and become viable in the mid term. And if the Sailfish OS starts to win all sorts of comparisons vs the iPhone, soon there may be more makers joining the Sailfish family. So for Jolla, the definition of success is quite different from most others on this list. They are not even attempting a mass market play, they know from the start, they hold a premium platform and they intend to fight for the top end of the market, not the bottom end.

Which brings me to the handset partners. We just heard that Chinese smartphone maker Zopo has decided to launch smartphones on Sailfish to sell in India. Are there carriers? The first one is signed up, Finland's DNA is committed to launching Jolla's first smartphone(s) in Finland. Yes, Finland only has 5.3 million people and DNA is the smallest of the three carriers in Finland but still, this is a real live carrier deal already signed up. And you can bet your bottom dollar that fiercely patriotic Finns will flock to Jolla to buy their first-ever smartphone, if it is anywhere near as good a follow-up to the N9 as we might expect. Meanwhile about the distribution deals? China's D.Phone, the largest handset store/distributor has signed up a deal to sell Jolla's smartphones in China. As China Mobile was a partner with MeeGo, there must be at least implied support from the world's largest mobile operator/carrier who counts one out of every 8 existing mobile phone users as its customer in the world - the carrier which alone is bigger than Sprint, plus AT&T, plus Verizon, plus T-Mobile USA, combined - and doubled.

Jolla's road is not secure, Sailfish has a big task ahead of itself, but for its early steps, it has already one handset partner, it has already signed its first carrier deal and has its first independent distribution deal. The Sailfish OS is already set to launch in China and India, the two largest mobile handset markets in the world. Jolla doesn't need to achieve huge success on this path, to make a splash globally and get the attention they want, to survive into 2014 and beyond. Will Sailfish reach 1% this year or even next, probably not, but they don't need to. They know they are a niche player at the luxury end. If they can do a million per quarter, thats enough for now, then grow from there. And then, if we find someone at the bottom end of the Top 10, wanting to differentiate from Android, with a high quality OS, we could suddenly find that someone like ZTE or Lenovo or LG suddenly announce their premium line will be powered by Sailfish.. But that would look more into 2014 than 2013..

TIZEN (ie MeeGo 2.0 Version B) THE CONTENDER

There are no sure things in mobile. But Tizen is the nearest thing to a sure thing, in smartphones. Why? First, because this is the big scale relaunch of MeeGo. MeeGo was a joint project by Nokia and Nokia's past Maemo project, merged with Intel's Moblin, both Linux based open source smarpthone OS projects. So when Nokia's CEO Stephen Elop suddenly announced on 11 February that Nokia was quitting the MeeGo path to its future and selecting Windows instead (Intel's CEO was apparently informed literally on the night before the announcement! Talk about arrogance), Intel rushed to rescue the project and find a new handset partner. And if you lose the world's largest handset maker, who would you prefer to have to replace it? The second largest handset maker of course. Intel found its new partner in Samsung. The project was renamed Tizen, it now includes both Linux and HTML in its code and is still an open source OS project, of course and merges also Samsung's own in-house bada project efforts.

Samsung's bada has been a stealth success story. Many in the West are quick to dismiss it, because they haven't seen any bada smartphones in the USA or the UK.. They think it has failed. Meanwhile bada has been a considerable 'third ecosystem' success from Russia to France to India to Brazil. bada has achieved nearly 30 million cumulative sales in its first 2 years. That is more than the iPhone did in its first two years! Yes, bada is the most successful new smartphone OS launch in history! But because most of the sales were in Emerging World countries - at low price points where bada was targeted - most Western analysts have ignored bada, and often do not even mention it as a major OS rival. But let me repeat, in the first two years, bada has sold more smartphones than Apple was able to sell iPhones in its first two years. Why is this? Partly its price, but mostly its - Samsung. Samsung has the world's best carrier relationships and retail distribution now that Nokia has shot itself in the foot and Samsung has easily stepped in, smoothly taking over whatever Nokia has abandoned. Samsung has literally today the best carrier relationships and the widest distribution reach in handsets. And obviously Samsung has become the world's biggest handset maker and biggest smarpthone maker.

For Tizen, consider bada as the 'practise run'. Samsung has previously used operating systems made by others - Nokia's Symbian, Microsoft's Windows, Google's Android etc. bada was their first attempt to launch a low-end, low cost OS. bada was intended to be Samsung's own OS and they didn't try very hard to win handset manufacturer partners to join in the 'ecosystem'. This is all different with Intel now and Tizen. Intel back from the days of Moblin, and with Nokia and MeeGo, had already secured handset maker partners and Tizen's Board includes Fujitsu, NEC, Panasonic and Huawei in addition to Intel and Samsung among handset manufacturers. More critically, what of carrier support? The Tizen Board includes NTT DoCoMo, Orange, Sprint, Vodafone, Korea Telecom and SK Telecom.

These are not 'supporters' of an OS who like it and will test it or consider it. These are Board Members on the OS, who are committed to developing Tizen. The handset manufacturers cover 40% of all smartphones sold in the world (mostly currently on Android). The carriers that are represented on Tizen's Board cover 11% of the total mobile subscriber base on the planet.

If you take the technical excellence that Nokia and Intel managed to produce with the first release of MeeGo and the first two handsets, N9 and N950 (while the new Nokia CEO was torpedoing every step of the launch) - and we add two years of further development, by Intel and Samsung - Tizen is likely to be a true generational leap beyond 'the operating system considered better than iOS'. When Samsung is winning all sorts of awards with the Galaxy series, and now gets to launch its flagship OS, Tizen, you can expect the first Tizen based Samsung smartphones to be glorious. When we see that in its 'practise run' of bada, Samsung was able to sell more bada smartphones in the first two years, than Apple in its high-profile media extravaganza that was the iPhone from 2007, and now Samsung gets to take all that and do better with Tizen, expect some fireworks. And that is, before we add in Huawei, the world's third-largest smartphone maker. And we add Fujitsu and Panasonic, both past Top 10 smartphone makers from Japan who are eager to return to the world stage and make similar profits with smartphones as tech giants rivals like Samsung, LG, Apple, Lenovo etc have done recently. Samsung and Huawei have promised first Tizen phones out this year. Samsung specifically has promised multiple Tizen phones and there is a tech spec of a Galaxy version running Tizen.

The operators/carriers have frequently been saying they would welcome a third ecosystem alongside Android and the iPhone. Windows Phone cannot become that because carriers hate and fear Skype (don't argue this point, Nokia's CEO Stephen Elop himself said so to Nokia's shareholder meeting, that carriers don't like Microsoft because of Skype, adding 'of course'). Carriers also don't like Blackberry for the cannibalization of messaging by the BBM system and how RIM/Blackberry has been 'too secure' and bypassing carrier systems. Samsung and Intel understand carrier concerns - why else have six carriers joining six equipment makers on the Tizen Board? Of any new OS, Tizen is BY FAR the most carrier-friendly, and least threatening OS. Expect the carriers to warmly embrace Tizen this year and for Samsung to offer a lot of choice in its smartphones, many 'sister' devices, where they run Android or Tizen, and often carriers starting to push the Tizen variants. Again, Samsung knows now how to play this game, just this past week we heard of the Telegraph survey of UK retail, finding that when their undercover shoppers visited UK handset retailers, the most offered phones were Samsung Galaxies, even ahead of iPhones.

Like I said, there are no guarantees. If the first Tizen phones are dogs, or have severe bugs, or Samsung has some PR fiasco with carriers etc, the picture might change fast. But by current view, Tizen is set to exceed the performance of bada, and very importantly, differing from bada, Tizen to launch in all markets including the two most advanced smartphone markets, Japan and South Korea with major carrier support in both.

Tizen could hit 2% market share per quarter by the end of this year and easily rise to something like 5% market share by end of 2014. If so, Tizen would rather easily become the Third Ecosystem and then gradually grow to something near 10% in the next few years. Note, that most of Tizen's gains would come directly from Android. Still, if you remove 10% from Android's 70% now, it still leaves Google as the Gorilla of mobile, with 60% and at least 3 times bigger than number 2 (iPhone) and 6 times bigger than number 3 (Tizen). Hardly a 'threat' to Google and Android dominance.. But Tizen is likely to put an end to any hopes Blackberry or Windows have of ever becoming the third ecosystem haha..

BLACKBERRY 10 RELEGATED

BB10 is obviously not a new platform as such, its a new release of the oldest surviving platform play in smartphones. The first Blackberry smartphone came out in 2001 and all its contemporaries have died or been killed like Palm and Symbian. Windows didn't enter the smartphone wars until later in the decade. So now we've just seen BB10. The phones look new and modern, the OS looks good. But there is nothing radical, no great leap ahead. Blackberry has played catch-up and only become yet another 'me too' i-Phon-a-clone. This new fresh OS was desperately needed to stem the decline. But it, and the first 2 phones shown, is not enough to vault Blackberry back into contention for major position in smartphones. Just four years ago Blackberries had over 20% market share globally. Now the Beebee lingers at 3%. In fact, Blackberry's collapse ranks as the 7th fastest handset collapse in history. This new BB10 is no silver bullet to restore Blackberry to 20% market share or even half that. Blackberry's decline hopefully has ended. If they have good headwinds in Waterloo this year, BB might end the year near 5% market share, more likely they will be near the 3% they are today. Blackberry had its chance, it blew it by taking the eyes off the ball, and focusing its limited marketing efforts to launch the ill-fated tablet.. That chance is forever gone and Blackberry is now relegated to forever being a niche player, serving the enterprise segment of smartphones. A profitable business, no doubt, but one that is not growing as fast as the overall smartphone business.

WINDOWS PHONE 8

And what of our 'darling', WP8, which was promised by so many 'experts' to now hold something like 20% market share and was supposed to be the 'third ecosystem' and to challenge or by some 'experts' even pass the iPhone in sales, especially after Nokia joined in the 'partnership'. Yeah. That all went tits up. Windows had 12% market share in smartphones in 2007. It was down to 5% in 2010. Windows market share was down to 2% in 2011 and now that Nokia has launched 9 Lumia smartphones, supported by the world's largest smartphone launch marketing budget, joined by massive marketing suppport by Microsoft, and added to by the biggest handset launch budgets ever by some of the carriers like AT&T in the USA - what is Windows market share in smartphones now? In 2012 it was.. 2%. Windows Phone is failing comprehensively.

Nokia's CEO took Nokia's 35% market share with Symbian in 2010, and forcibly migrated it to Windows Phone. How many took this gambit? 2%. 1% is still left on Symbian as of Q4 of 2012, so 32% of Nokia's loyal customers have rather run away, taking an Android based smartphone like Samsung's Galaxy, or Apple's iPhone instead of taking the Lumia. And what of those who actually took the Lumia? The independent Yankee Group survey of customer satisfaction of USA based Lumia owners found that 4 out of 10 hated the phone so much, they rated it worst phone they've ever seen. And the brand new Bernstein loyalty survey of smartphone owners in USA and UK, found that the Windows Phone loyalty is so bad, two out of three will never buy another Windows Phone based smartphone again. The Windows Phone experiment has failed and is a dead man walking, only surviving as long as Nokia exists as a smartphone maker with Elop as its CEO (we have an Elop Firing Watch on this blog, counting down to when he is fired or Nokia itself is sold).

Almost all past Windows partners have already given up on Windows including Sony, Motorola, LG, Dell, Palm, etc - and of the last who remain, they cut their Windows offering like HTC and Samsung or postpone their first launches and cut their intended WP8 product lines like Huawei and ZTE. Most of the remaining Windows Phone 'partners' have other preferred new OS projects they now prioritize, from Tizen to Firefox. And if Nokia's CEO Elop is fired, his successor will no doubt almost instantly announce the end of Windows Phone and a shift to Android.

There are those who say 'but synergy' with Windows 8 on the desktop. Yeah. Where have we heard that before? Like with Windows Mobile. Like with Windows Phone 6. Like with Windows Phone 7. Like with Symbian - Stephen Elop when he was still at Microsoft, negotiated that 'partnership' where all Microsoft Office suite apps were made compatible with Symbian and Nokia E-Series. What good did that 'synergy' get the two tech giants? None whatsover. There probably IS some synergy from the desktop to the laptop to netbooks to tablet PCs. Yes, maybe Microsoft's Surface tablet can benefit from Windows 8 'synergy' but on smartphones we have one decade of evidence that it doesn't matter one iota. Windows has been the slowly dying operating system of smartphones, only kept alive by continued cash injections by Microsoft. All Microsoft partners who ever focused on Windows Phone have become unprofitable doing so, and only recovered to profits by abandoning the Windows path, from Sendo (bankrupted) to Motorola (bankrupted) to LG (recovered) to HTC (recovered). Windows 'life span' in smartphones continues only as long as Nokia CEO continues on his borrowed time. And as to Microsoft building its own smartphones - yeah, they tried that once before, remember Kin the world-record in market failure of a new handset launch, died in six weeks? What killed Kin was utter lack of carrier support. The carriers hate Microsoft, they fear Microsoft, they hate Skype, they don't trust Ballmer, they'd be idiots to go to bed with the company that always drives its 'partners' to bankruptcy, just like its now doing to Nokia.

So thats my view today of the upcoming newcomers to the smartphone OS races. My best wishes to all, we welcome competition and variety. But in the long run, the industry cannot sustain dozens of platforms, some will naturally disappear, like we've seen in the past with Palm, Symbian, LiMo, MeeGo etc. If I had to pick the strongest horse from this stable, I definitely have to pick Tizen. And as a Finn and ex Nokian, I do hope sincerely that Jolla and Sailfish do make a nice success out of their venture. 

PS - for those who need to have more data about the global handset industry including market shares, regional markets, average prices, installed bases, handset features etc, see my TomiAhonen Phone Book 2012

Nokia Disaster Told One Picture at a Time: Today Picture 7: When is a Platform "Burning": The Test Of CEO Sanity (alternately titled:) Is Elop Really This Delusional?

So we continue the Nokia management disaster, studied through a single issue, and single picture per blog. Today we examine management judgement by CEO Stephen Elop. So before I continue, this is a series of blog articles to study the Nokia mess.

So far we've done: the Nokia smartphone unit sales collapse due to the Elop Effect, the competitive picture of Nokia vs Apple and Samsung, Nokia market failure in context of other historical handset industry collapses, the failure of the promised migration from Symbian to Windows Phone, the disasterous Lumia sales pattern using the Windows Phone system and the Revenue Collapse in Nokia's handset business. For those who may wonder am I nit-picking some extreme data points on a personal vendetta or agenda, this is Nokia's official filing to the USA SEC and NY Stock Exchange of the full set of risks to the new strategy as announced by Elop in February 2011. I have not invented these problems, they were clearly stated by Nokia two YEARS ago as so dangerous, they may jeopardize Nokia's profitable handset business. Please read the official Nokia corporation filing to the US Securities and Exchange Commission in their long and explicit risk assessment in their Form 20-F two years ago.

Now lets examine whats going on inside the head of the CEO who wants to be called 'The General' and who pretends to be a strategic thinker. Elop's name will always be tied to the most damaging management memo of all time, the so-called 'Burning Platforms' memo. A memo which cost Nokia 13 Billion dollars of revenues wiped out, and 4 Billion dollars of profits destroyed. A memo that Elop himself has since admitted, caused damage to Nokia smartphone sales. The costliest memo of all time. How can a CEO be allowed to destroy 13 Billion dollars of revenues - and wipe out 4 Billion dollars of profits - and allowed to remain in charge? Why is Elop still running Nokia. I have started an 'Elop Firing Watch' via Twitter, where my followers picked dates of when they think Elop will be fired.

WHEN IS A PLATFORM ON FIRE

So we come to today's picture. This is a picture about the mental ability of CEO Stephen 'Call Me The General' Elop. Is he really a sharp, strategic thinker. Or is he a delusional psychopath. Lets remember, delusion is a severe insanity of the kind, where a madman looks at facts, refuses to accept them, and substitues his/her own alternate imagined fantasy instead of reality.

This is Nokia's situation as of February 2011 and as of February 2012. So the data is according to the just-ended fiscal years (2010 and 2011), after Nokia has just reported its final annual results at the end of January. This is what Nokia looked like, and what Elop, the Chief Executive Officer said about his company and its smartphone business at the time:




This picture may be freely shared

On February 9, 2011, looking at the just-ended, just-reported Nokia fiscal year 2010, Nokia's new CEO sees Nokia is more than twice as big as its nearest rivals including Apple's iPhone - and Nokia grew more in 2010 than Apple so the gap between Nokia's smartphone and Apple was increasing - Apple was not catching up, Nokia was pulling away from Apple. Nokia set a world record in growth in smartphones in 2010. Nokia did this profitably - how profitably? Nokia set a Nokia-record in growth in revenues and a Nokia record in profits in its smarpthone unit - and the Nokia profitability in the smartphone unit grew towards the end of the year, setting also a Nokia quarterly growth record. Nokia's smartphone revenues were second largest in the industry behind only Apple's, and Nokia's profits were also second largest in the industry, behind only Apple's.

You are the biggest, you grow the fastest, you set a world record in growth. You do this with increasing revenues and increasing profits, both of those company-wide records. This, is what the CEO calls a strategy that is failing, and failing so badly, Nokia apparently needs desperately a new strategy, and Nokia is on a 'burning platform'. Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

Then lets fast-forward 12 months. Nokia has announced the new strategy by Elop. The Nokia record-setting growth in smarpthone unit sales, turns into a world-record collapse in smartphone unit sales. Nokia proceeds to set a world record fall in smartphone revenues in that year. And Nokia produces its first-ever loss in the smartphone unit - thus a Nokia record failure in the unit that is supposed to deliver the future to Nokia.

You set an industry record crash in unit sales, an industry record collapse of revenues, and the unit that invented the smartphone and the only legacy handset maker to do profits with smartphone sales in every single quarter of smartphone existence, suddenly produces a loss. This, the CEO now says that Nokia is "no longer on a burning platform", and that "Nokia's future is secure", and Nokia is in "an era of growth". Delusion is the type insanity where you are able to look at facts, refuse to accept them, and tosubstitute an imagined fantasy insteady of the reality.

I am not making this up. Elop looked at Nokia's record-setting industry-crushing dominating year 2010 in smartphone growth, highly profitably, and sees 'distress' and 'disater' and 'failure' and panics, and abandons Nokia's winning ways, and issues his Burning Platforms memo (totally full of delusional lies by the way). Elop says that Nokia has "fallen behind" the competition and if continues on the same path (that had just grown faster than the competition) Nokia would "get further and further behind, while our competitors advance". That was February 9, 2011, two years ago.

Then yes, Nokia went to set a world record failure in handsets, Nokia fell in the next year, 2011, worse than Motorola or Palm or Siemens or RIM. Nokia literally set a world record collapse in handsets. The unit sales set a record in collapse, Nokia smartphone revenue fall is a world record, and the perennially secure profit-machine was turned upside-down to produce its first-ever loss. This, the CEO says on February 13, 2013 in an interview to Business Day that "Nokia is no longer on the edge of a burning platform" and "Nokia's future is secure" and Nokia is "facing a new era of growth."

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

ELOP WAS THE ARSONIST

The Nokia smartphone platform was not on fire in 2010. Nokia was more than twice as big as its nearest rivals - this is such enormous dominance of an industry, that Toyota has never enjoyed such a massive overpowering lead in cars. Neither has GM or Renault or Volkswagen or Fiat - ever. That dominance is so huge, Hewlett-Packard has never had the pleasure of being twice as big as its nearest PC maker rival. Nor has Dell, nor has Lenovo or IBM or Apple or Compaq or Toshiba or Acer or Asus or Fujitsu etc. But not just was Nokia twice as big as its nearest rivals - Apple's iPhone and RIM's Blackberry in smartphones, Nokia was growing more in 2010 than its nearest rivals - the gap was increasing. Nokia did this with highly profitable business, with increasing revenues and increasing profits. Towards the end of the year, when Elop took over, Nokia's smarpthone unit average sales prices jumped up at a Nokia-record, the revenues for the first time grew bigger than the traditional 'featurephones' ie 'dumbphone' unit - and the jump in Nokia's profitability set a Nokia-record. Nokia's loyalty was so strong, in an independent UK survey by Right Mobile Phone Nokia's customer base had the highest retention rate of any handset brand.

Nokia's Symbian was the bestselling smartphone OS, and it was the biggest OS by installed base, and it was the bestselling smartphone OS in China, the world's largest individual country market for smartphones, and Symbian was the bestselling smarpthone OS on the continent that sold most smartphnoes, Europe. Symbian was the bestselling smartphone in the country with the biggest growth of mobile in 2010, India, as well as the bestselling smartphone in the continent with the biggest growth of mobile, Africa. Nokia's Ovi was the second bestselling app store behind only Apple's iPhone App Store, except that Ovi was available with over 100 carriers supporting it, with apps in over 60 languages, growing far faster than Apple's iPhone App Store. Nokia's Qt was being introduced as the app developer tool to provide apps across multiple smartphone platforms including Symbian, Maemo, MeeGo Moblin, initially, and soon also Blackberry, Android as well as the featurephones running Nokia S40. Qt would shortly reach twice as many devices as the installed base of Windows on PCs, tablets, and smartphones.

This is what the CEO calls a 'burning platform' and forces Nokia to quit the winning - not winning, utterly DOMINATING strategy, and instead to select the weakest, tiniest, unproven, unloved platform by the company known for plunging its 'partners' to loss-making and bankruptcy, Microsoft. When you take a winning strategy and turn it into world-record collapse - you have set your platform on fire. You, CEO Stephen 'Call Me The General' Elop are an arsonist. There was no fire on Nokia's platform, Stephen 'Call Me the General' Elop. No. There was no fire. The platform was not burning. You set it on fire, Mr Pretend-Patton. You, and only you. Nokia's smartphone platform was the strongest in the industry in 2010, by far the most overpowering, winning, dominating strategy. 77% market share in the world's biggest smarpthone market, China! The strongest loyalty in the UK. The second-biggest app store in the world, closing in on number 1, Apple. Nokia record profits, Nokia record revenues and the world's biggest smartphone unit sale growth. There was no fire on that platform at Nokia. You took it, and set it on fire. You are a menace. You are a psycopath!

NOW WHAT OF YEAR 2012

Lets fast-forward to today. Now we have seen a second year in the Elop new strategy era. This is what the picture looks like now. Nokia has broken its own record in failure, yes, setting a new world record collapse in smarpthone unit sales, to catastrophic levels in 2012, and also set a new world record in smartphone revenue crash, and now Nokia also sets a world record loss in smartphone sales. What does the CEO think of this performance?




This picture may be freely shared

Now just over a week ago, Elop told us that he is "very encouraged" that Nokia's "execution against our business strategy" has "started to translate into financial results". Financial 'results' yes, if by results you mean not just Nokia-record losses, but handset industry record level losses. That is a 'financial result' yes, but not one that any CEO would be 'very encouraged' by, unless it is your intention to destroy Nokia?

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

In 2012, Nokia took its own world record collapse in smartphone unit failure, and managed to do even worse, setting a new world record in failure. Nokia took its record-setting revenue collapse in smartphone sales, while the global smartphone industry exploded growing over 40% in units and over 30% in revenues, and Elop managed to wipe out 55% of Nokia smartphone unit sales and 50% of Nokia smartphone revenues - from year 2011 that was already a world record setting failure year for Nokia and Elop's new strategy. The defintion of insanity is to do the same thing and to expect a different result. In 2012, Nokia took its company-record loss in the smartphone unit, and made it far worse, producing a world record loss by any smarpthone maker, in 2012.

Nokia's new Lumia smartphones running the Windows Phone by Microsoft, are the worst smartphones Nokia has ever launched. With the last edition of Symbian, a new launch of a new version of Symbian did 5 million units in one quarter in Q4 of 2010. Now with these new Lumia smarpthones, after 5 quarters, Nokia has yet to even match that in any quarter, the very best that Lumia has managed is a paltry 4.4 million units - five quarters after launch - while the smartphone market has more than doubled in size in the mean time. The Lumia series is plagued with failures and problems and bugs. The Lumia buyers hate the devices so much, in an independent survey of Lumia buyers by Yankee Group in 2012, four out of ten Lumia buyers rated it the worst phone they had ever seen. The loyalty of the Windows Phone series is so bad, the Bernstein survey of smartphone brand loyalty found that two out of three who were hoodwinked into buying a Lumia, hate it so much, they will definitely never buy another Windows Phone smarpthone again! 

The Lumia series has the hightest return rates of any phone made by Nokia ever (customer returning phones after purchase). The Lumia series has the lowest resale value of any Nokia phone ever released, in many markets the resale value is already zero. It may amuse American readers but yes, in Africa, India, Indonesia, Brazil, China, much of the rest of the world, handsets are sold second-hand, like cars. Your resale value is a significant factor in how much you are willing to pay for your new phone, especially as most people live in countries where phones are not subsidised by the carriers and sold on 2 year contracts. Consumers pay full retail prices for their handsets, ie the real price of an iPhone is 640 dollars, not the 179 dollars that AT&T advertises on a 2 year contract. Back to Lumia, the European carriers for example said, that the Lumia series is not suitable for European consumers, and the carriers have effectively boycotted Lumia sales from the start. The very latest survey by the Telegraph in the UK this past week found that in-store sales staff won't offer Lumias to customers asking for smartphones, they offer Samsung Galaxies instead.

The Windows ecosystem is dead, it is the sixth of six, literally the smallest in existence. It has not been growing, it has been shrinking. The Windows ecosystem has a modest catalog of apps primarily because Nokia was paying app developers to build Windows versions of their apps (and so did Microsoft too, offer payments when developers simply refused to bother to develop apps to the tiny ecosystem). The traffic generated by Windows Phone apps is so miniscule it doesn't register on most measurements, while ironically, Symbian still runs biggest or second biggest app environment on the three most populous of the six inhabited continents.

Elop looks at record failing Nokia smartphone unit sales, record collapsing Nokia smartphone revenues, and hideously huge losses - for the full year the Nokia smarpthone unit generated a 2 Billion dollar loss, at one point in Q3 when pushing the Lumia series very hard, Nokia was making a 49% loss per smartphone sold! This compares to a 2 Billion dollar profit Nokia made just before this mad Microsoftian misadventure that Elop calls a new strategy. Elop sees collapsing sales, record-setting revenue crash and massively growing 2 billion dollar loss - and he says he is "very encouraged" that his strategy is now succeeding? That his strategy has "started to translate into financial results" Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

WHAT DOES DELUSIONAL CEO DO?

Can a CEO be this mad? How can Nokia's Board accept the management of a madman? Why is Nokia led by the leadership of a lunatic? This is what happens if a delusional psycopath is in charge:

Nokia invented the smartphone and the first Nokia smartphone had a full QWERTY keyboard. Nokia's business-oriented E-Series on Symbian was renown for its wide range of QWERTY keyboards and the heavily texting-addicted youth were often selecting Nokia QWERTY based smartphones. About one in three Nokia smartphones sold globally have had QWERTY keyboards historically. Elop admits to having had 'internal debates' about QWERTY. The Lumia series has introduced 9 devices so far, not one of them has a physical QWERTY keyboard in any form factor. Elop has voluntarily abandoned one third of Nokia's loyal custoemr base with this one moronic move. Only a delusional psycopath looks at facts, is able to actively ignore the truth, and subtitute his own hallucination in the place of reality.

Nokia announces the new superphone the N9 with MeeGo. The press love the phone. After Nokia's share price has been in free-fall for five months, suddenly on the N9 news, Nokia's share price jumps 5%. Any sane CEO would celebrate and be seen everywhere with the new superphone. Elop announces to Finnish newspaper Helsingin Sanomat, that no matter how well the N9 will sell, Nokia will not release more phones to run on MeeGo. WTF ? Can you see Steve Jobs ever saying something that moronic? Can you see Steve Ballmer - hardly a rocket scientist among CEOs, himself listed as one of the worst CEOs in the world - but would Ballmer say, that if the next Xbox is a success, he won't do more of them? What CEO takes a highly praised product, and kills its future? Only a delusional CEO can do that.

Nokia's traditional stregth is the camera. Nokia's own internal surveys reveal, year after year, that the camera is the number 1 reason what Nokia smartphone buyers want when buying a Nokia branded smartphone. Nokia has had a 12 megapixel flagship smarpthone since 2010 and on Symbian, introduces the industry-shattering 808 Pureview with its 41 megapixel monster-sensor in 2012. And once again, Nokia itself says in 2012, that yes, Nokia customers number 1 request is the camera. Nokia wins best cameraphone year after year after year in survey after survey, from the N93 to the N95 to the N9 to the 808 Pureview. Yet the delusional CEO looks at the facts, and decides he has a better imaginary reality inside his head, and he regresses, releasing puny 8 megapixel cameras on THREE SUCCESSIVE flagships on the Lumia series. So bad, that even in 2012, the old 2010 Symbian based flagship N8 wins in side-by-side camera tests (and the N8 still registers in December 2012, among the top 5 bestselling Nokia smartphones sold in China for example when the phone is literally more than 2 years old and 9 newer Lumia phones have been released)

Nokia's biggest rival is Samsung. Samsung competes against top end smartphones, in mid-priced featurephones and in low-cost dumbphones. Samsung is the only rival to match up to Nokia in every country and in most markets Samsung and Nokia were numbers 1 and 2 back in 2010. When Elop wrote his Burning Platforms memo, Nokia was 50% bigger than Samsung in dumbphones and 4x bigger in smartphones. Elop in his memo lists many competitors - including Google who is perhaps Microsoft's rival, but as Google didn't make handsets, smartphones nor networking equipment, Google was not in any way Nokia's significant rival in 2010. But Elop ignored Samsung? Then in February 2011, when Elop was asked about Samsung, he said, he does not lose any sleep over Samsung !!! At that very moment, Samsung passed Nokia as the world's biggest handset maker. It had already passed Nokia as the world's biggest smartphone maker. Today Samsung is 6 times bigger than Nokia in smartphones and produces the second largest profits in handsets, behind only Apple. Elop said he didn't lose any sleep over Samsung. Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

Nokia's MeeGo based 'Searay' handset is selected by Verizon as their Nokia return handset. Verizon love MeeGo and the Searay. Nokia has for years hoped to return to the US market. Any sane CEO would tell Verizon, you will get it. But Elop? He refuses to let Verizon get the Searay, and rather bastadizes the Searay, forces it to use Windows Phone - and when Verizon see the Lumia 800, they say no way. Nokia lose a year of Verizon sales. Only a delusional CEO can behave like this.

Nokia's N9 is released in September 2011 and immediately achieves in side-by-side tests, the astonishing rating by practically all tech tests, that it is better than the iPhone !!! There has never been a Nokia smarpthone that regularly beats the iPhone (the E90 Communicator was the last Nokia smartphone to manage it but only occasionally, not consistently). This is not just the only Nokia smartphone consistently ranked better than the iPhone, it is the ONLY smartphone by ANY BRAND to do that consistently. Also the MeeGo OS is rated superior to the iPhone iOS - something Windows, Blackberry, Android, Symbian etc have never achieved. So any reasonable CEO of course would rush to launch the N9 to every strong iPhone market like the USA, France, UK, etc. What does Elop do? He forbids the release of the N9 to any strong iPhone markets? Remember, this is at the time when Nokia is setting global records for smarpthone sales collapse and producing massive losses, with its factories idling. The N9 is a highly profitable smarpthone commanding premium prices. What idiot CEO refuses to let the N9 be sold? Only a delusional psycopath can look at the facts - that the new Nokia N9 is better than the iPhone - and then explicitly forbid its sale in any market where the iPhone is strong. What is wrong with Elop? 

THe 808 Pureview is released in February 2012 and its demand highly exceeds Nokia production. The 808 Pureview instantly is heralded as the best cameraphone of all time. The 808 Pureview runs on Symbian using traditional Nokia strengths, and has lots of abilities and features that Windows Phone cannot support. The smart CEO would take the high popularity and visibility of the 808 Pureview, and rush to release a series of Pureview smarpthones, the 818 Pureview with QWERTY slider. the 707 Pureview with a slightly smaller sensor like 22 megapixels, but stll far bigger than any current rivals. And for Christmas 2012, produce the uberphone, the 909 Pureview with a 50 megapixel sensor, and optical zoom. Right? Nokia itself admits, the demand for the Pureview was far higher than Nokia anticipated. This is a hit phone! It won all awards in 2012 for best cameraphone. And most Nokia customers came in asking for a good camera. Any smart CEO would have produced a family of Pureview with Symbian, especially as Nokia factories are idling and Elop himself promised 150 million more Symbian while he has only delivered 74 million so far. And with no royalties paid to anyone, Nokia can do Symbian far cheaper than for example Lumia where Nokia has to pay a royalty to Microsoft. If the 808 Pureview was a failure, it makes sense to end it. If the Pureview is in such high demand Nokia can't keep up, any sane CEO would rush a series of sister products. But not Elop. Nokia now announced there will be no more Symbian based smarpthones, even as Windows Phone cannot support nearly all the features that make the 808 Pureview the best cameraphone on the planet.

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

I could go on and on and on and on. Nokia's CEO is delusional. He looks at Nokia performance and cannot relate to it. He does not see success as success, he seems to want to destroy any success he finds. Elop is to success what water is to fire. Elop found the strongest smartphone global juggernaut, and set it on fire like an arsonist. He then looks at the disasterous failure and calls it a success. Elop is dangerous as a CEO, not dangerous to his rivals, dangerous to his own employees, to his own Board, to his own shareholders and investors. Why is a delusional psycopath allowed to remain in control of Nokia?

For those who didn't like my little clown-faces, I have created a cleaner version of the picture. If you want to write about this story and use my pictures, you may prefer this one, haha. Feel free.




This picture may be freely shared

This was part 7 in the Nokia disaster. Elop has presided over the world-record collapse of a dominating juggernaut. Elop is literally the worst CEO of all time. Unfortunately this series is nowhere nearly done, I will return with more articles in the series, always one picture and one angle to the mess that did not exist before Elop, but what was caused by Elop.

(I need to point out, Nokia was in trouble before Elop, yes, Nokia corporation, not Nokia smarpthones. Nokia had trouble with 'execution' not its smartphones strategy. Nokia needed help in execution, delivering new phones on time and without bugs. Elop did not address those - his new Lumia phones have been plagued with more errors and bugs than any Nokia phones ever before, including the notorious N97. What Elop did, was to see that there was a problem, ignored it, and created a new problem. Its like a doctor, who arrives at an accident scene, sees that a patient has lost a leg and the leg needs to be cleaned and properly amputated. Then the doctor rather than attending the leg, decides to cut off an arm from the patient.. Elop has found problems at Nokia, ignored those, but created new problems of his own - wait, this is EXACTLY like Elop, the Delusional Psycopath)

Stay tuned, more troubles coming from the Nokia saga told one picture at a time. And for those who missed it, we have an 'Elop Firing Watch' on the blog, a contest to guess what date is Elop fired from Nokia. (that date cannot come too soon, and will probably be named a national holiday in Finland, haha) The contest has over 100 entries..

Continuing Nokia Disaster in Just One Picture, today Picture 6: Revenues. What CEO is Allowed to Voluntarily Wipe Out Half of Total Revenues? Elop Thats Who

So we continue in the series exploring the biggest management failure of all time. Yes, that is Nokia under Stephen Elop's tenure as CEO. As Elop has made so many massive mistakes, I have cut his failures into short blogs that deal always with only one topic, and illustrate it with only one diagram. We've already done Nokia smartphone unit sales collapse due to the Elop Effect, the competitive picture of Nokia vs Apple and Samsung, Nokia market failure in context of other historical handset industry collapses, the failure of the promised migration from Symbian to Windows Phone and the disasterous Lumia sales pattern using the Windows Phone system. Today we add picture 6: The Revenue collapse in Nokia's main business, the handsets & smartphones unit, which accounted for more than two thirds of Nokia total revenues and all profits when Elop took over. 

The picture today is simple. Revenues. The blue part is smartphones, the green part is dumbphones.




This picture may be freely shared

So yes, Elop inherited a handset-manufacturing giant, which in dumbphones was 50% bigger than its nearest rival and in smarpthones more than TWICE as big as its nearest rival. The revenues in the handset unit were growing very strongly (as the period from 2009 to 2010 was still the tail-end of the worst economic recession in our lifetimes). Nokia's handset unit saw 5% total revenue growth, powered by the smartphone unit which saw 17% revenue growth but tempered by the decline of revenues in the dumbphone unit of 5%. Every industry analyst in 2010 was already of the consensus view that smartphones were the future of the industry and the dumbphones business was living on borrowed time, to be replaced eventually 100% by smartphones.

Then Stephen Elop had his moment of Microsoftian madness, and issued his silly memo and caused the Elop Effect, the costliest management mistake of all time. Since then, he compounded his strategic fiasco with further silliness such as refusing to sell his popular MeeGo based smartphones in Nokia's major markets that were desperately begging for them, and further by launching a still-born bug-ridden Lumia series on a highly undesirable and incomplete Windows Phone operating system - to Nokia record return rates and by latest measurements 2012, loyalty so lousy six out of ten Lumia owners want to buy any other smartphone than another Windows based smartphone. What has been the result? Nokia revenues fell 49% in the next two years - this, while the global industry for handsets doubled in revenues. In a period of hypergrowth, Nokia managed to wipe out half of its business. No wonder Nokia has been firing tens of thousands of employees and selling factories etc.

And lets be clear about 'core business'. When Elop took over as CEO, he was tasked by the Nokia Board to sell the NSN business unit, the NokiaSiemens Networking unit of telecoms infrastructure (a unit that was perennially delivering losses or very slim profits in a good quarter). Elop proceeded to try to sell the NSN unit, but couldn't find a suitable bidder and then ended the task of trying to sell the NSN unit as a whole. Since then he's been selling it piece-meal, part by part. So while yes, the NSN unit delivered 'surprising' profits recently, this is not a core part of Nokia's business, and Nokia is clearly continuing on its quest to get rid of all parts of NSN by selling them off. And the mapping unit, Navteq, is trivial in size compared to the core business, the handset unit.

Mind you, there is no business failure of legitimate Fortune 500 size company business (by legitimate, I am excluding the actual crimes where management issued fraudulent statements and went to prison for the fraud and crimes, like Enron and Worldcom). So think of the biggest most famous corporate disasters in recent memory. The Exxon Valdez oil tanker disaster, the Toyota Brakes recalls, the New Coke launch, the Mercedes A-Series, the BP Oil Spill. No market leader has wiped out 49% of its core business revenues in a two-year period. CEOs are fired for far less than this. (Why is Elop allowed to remain in control of Nokia? Why is the Nokia Board asleep at the wheel. When will Nokia owners - shareholders - take the Board to task and fire the Board as well? This IS a World Record in management failure.)

Oh, while its not the topic of today's picture, let me just mention - Nokia's handset unit was very healthy and delivering high profits and profitability when Elop took over - in fact, the first full quarter Elop was in charge at the end of 2010, Nokia set a record for profits in the handset unit and its smartphones. So the company was very healthy and - improving from that - when Elop destroyed it all.

Immediately after the Elop Effect, the Nokia smartphone unit became unprofitable. It has been unprofitable since. The last Quarter for which we have the data today (thats still Q3 of 2012, as we await the Q4 results) Nokia's smartphones were so hideously undesirable, they were being sold making a 49% loss per smartphone sold !!! 49% loss per phone sold !!!

The dumbphone unit hasn't fared as poorly. It did plunge into losses but less than those at the smartphone unit, and then recovered back to profitability. However the self-induced damage at the smartphone unit and the utterly unsellable Windows Phone based Lumia series (with massive price dumping too) were producing so giant losses, that the total handset unit has been making losses up to now. For Q4 Nokia said they might break even. So no, there is no silver lining to this. The downsizing was not done for some noble profit motive for example, on the contrary. The situation is - if possible - even worse than the picture here. But even, just looking at revenue collapse, this is a world record in destruction of a company's core business in only 22 months.

And yes, more pictures coming in the sad Nokia saga. If Elop had only made one mistake, I wouldn't need to do this so often, but Elop has precided over a cavalcade of catastrophies as CEO. So we have to examine them in detail. This cannot be a sign of anything other that total management incompetence - no wonder for example MSNBC listed Elop among its 5 finalists for worst CEO of the year.

An Attempt to Validate the 150x Per Day Number Based On 'Typical User'

I've been working on that 150 times per day number. You may have heard it, Nokia was first to publish the number in 2010, saying that on average a mobile phone (not smartphone, any mobile phone) user will look at the phone 150 times per day. This not only in wild and woolly Finland, but across the planet. We had seen big numbers before, but they were all under 100 times per day and Nokia's bombshell 150 number was widely reported. And then, last year, T-Mobile USA verified the number for the US market as well - a market that severely lags the Industrialized World average in most things mobile - lagging often even many advanced Emerging World countries...  So when the USA cellphone users (not smartphone, any cellphone) are looking at their phones 150x per day, thats getting pretty serious.


UPDATE OCTOBER 8, 2014 - Now there is finally a consumer survey published with a published number. A UK survey of only smartphone users (not dumbphones included) found as one might expect, an even larger number. The survey of 2,000 British smartphone owners found they look at their phones 214 times per day. Read more here.



And last year we heard that in the UK, the average smartphone user looks at the phone 200x per day. But lets not worry now about Angry Birds addiction. Lets remain with the basic phone - four out of every five mobile phones in use on the planet still today is a 'dumbphone' ie not a smartphone. I have been trying to validate the 150x number and I've gotten pretty close. So this is my 'argument' in support of 150 times per day. WHAT would a 'typical user' do with the non-smartphone today, that results in looking at the phone once every 7 minutes of every waking hour of every single day? I'll paint a scenario, using for the best part, consumer statistics on behavior on phones, or replacement behavior, plus some observations and personal experiences and chats with some fellow experts.

MESSAGING 23 TIMES

So lets start with the feature used by more than any other as a percent of all mobile phone owners. No, its not voice calls anymore, more people have abandoned voice call use, than don't use SMS text messaging. The primary use of a mobile phone (including smartphones by the way) is mobile messaging. So, what kind of behavior do I see that gets us 23 looks at the phone as a messaging tool. The average person does not send 23 messages per day..

Among active users of SMS, the number is 6 SMS text messages sent per day. If you send 6 messages, you average also receiving 6 messages from your friends. Thats 12 times right there. But what's the rest?

Once per day we draft a message we don't send, or draft a message and save the draft, to edit and send ti later (remember, these are pretty addicted users, who send and receive 6 messages daily). Then we re-read messages (yes! We all do!). So the saved message that we love or hate or didn't understand. I'd say on average 2 times per day we re-read a message we read before. Plus we'd receive perhaps 1 unsolicited message, an ad or alert or reminder etc. And then we anticipate! We check in case there has been a message that had arrived, maybe we are awaiting a reply, maybe we hope for a contact, etc. I say we look for a message that isn't there typically more often, than messages actually arrive - so that would be 7 times we seeked a message that hadn't arrived (yet). That gives us 23 times looking at a phone relating to messaging. (and please don't write about OTT services like iMessage, Whatsapp, BBM or Skype - these are all used by a tiny tiny sliver of the total worldwide population, only Skype reaches 1 Billion users, vs over 5 Billion active SMS users. We are not talking of heavy messaging fanatics on smartphones on WiFi or all-you-can-eat data plans, we are talking typical users worldwide. That means SMS, not OTT)

VOICE CALLS 22 TIMES

Then the voice calls. The average phone user places 3 calls per day and also receives 3 calls. Where are the other 16 times? Interruptions! We have a dropped call (1x per day) or we make a call attempt that won't go through (1x per day). We miss a call that was coming, too slow to pull the phone out, or forgot we had changed our ringing tone (yes, we all have done that too). I say 1x per day we miss a call. Avoid a call? Yes that we also do, we see whose calling, and decide not to talk, send the bastard to voicemail jail. Thats 1x per day. But you know what. We look at the phone we we start the call - we ALSO have to look at the phone to end the call. So out of the 7 actual phone calls, we have to end 7 calls, that gives us 7 more times to look at the phone. Now I'm at 17 times per day. Where are the last 5? Anticipation again. We look at the phone awaiting or anticipating a call or call-back. I'd say 5 times per day. That gives a total of 22 times we look at our phone relating to voice calls, per day.

CLOCK 18 times per day

If the average person sleeps 8 hours per night, that gives us 16 hours awake. I say we play with the alarm going to sleep and waking up, so out of the 16 hours, there are only 14 hours when we are reasonably awake and care about what time it is, when we don't fiddle with the alarm or snooze. And of that, we then have some moments on a typical day, that we are anxious about time - in the morning, going to work or school, worrying about being on time - and I'd say we look at the clock two times at that occasion, rather than once per hour. Same around lunch-time at work/school, when is this interminable meeting going to end, isn't it lunch-time already? And again, at the end of the work/school day - when we anticipate getting away from work/school. So on those occasions, I'd say conservatively that we look at the clock twice per hour, and on other times, we are curious about what time it is, roughly once per hour - often very habitually, and even subconsciously - so you know the story, the wife sees the husband just glanced at the watch, and asks him, what time is it, and he can't tell you, even though he just looked at his watch a moment ago... Anyway, I get 18 total times we look at the clock on the phone, not counting setting or resetting or shutting the alarm.

ALARM 8 TIMES

Which brings us to the alarm. I've been saying for years that the mobile is the last thing we see before we fall asleep and the first thing we see when we wake up. Its nice to see that was also verified by the Time global mobile survey finally in 2012. But yes, what of the alarm? To set it, I'd say the average person does that once, and then once before falling asleep, or waking up at night, or a little before the wake-up, looks at the alarm setting, just in case. Thats 2 times total. Then the wake-up alarm, 1x more. And then snoozing. I'd say average person snoozes three times? That gives us 6 uses of the alarm as a wake-up. But its not the only use of the alarm. We also use it as a convenience reminder during the day. I'd add 2 more uses of the alarm daily, once to set, once to turn off the ringing. That gives us 8 times we look at the alarm feature on the phone.

CAMERA 8 TIMES

Then the camera. Most of us are not shutterbugs who take dozens of pictures every day, but the consumer surveys suggest the average cameraphone owner takes about 1 picture per day. How do I get 8 times to look at the phone? First we have to launch the camera app. Then we have to aim the camera at our object. Then we take a picture. And we have to check if the picture turned out good. And likely it wasn't good enough. We take a second picture. And look at that picture, decide its a keeper. Then we delete the first pic. And finally, we randomly look or show a picture during the day. That gives me 8 uses of camera.

MUSIC PLAYER 13 TIMES

Not everybody uses music on the phone but nearly half of mobile phone owners do consume some kind of music from music streaming services to using the phone as an MP3 player to ringing tones. Lets take the music player option - nowadays a staple with very modest priced dumbphones already. And I think a typical user would find 4 times per day to listen to music. When listening, sometimes we hit a song we don't like or don't feel like listening to (or finishing) so we skip. I'd say we skip 3 times per day. Like a voice call, we have to turn off the music player when we're done, thats another 4 times we look at the phone. And I'd say on average we get interrupted once per day to pause the song that is playing - such as for an incoming call or message - and then resume the music. That gives me 13 times looking at the phone for music consumption.

GAMING 12 TIMES

For gaming, I'm now thinking basic time-killer games like Snake or Tetris, not Angry Birds. Launch the game 3 times, end the game 3 times. Interrupted twice, resumed twice, and looking at scores or settings 2 times per day. 12 times of use of the phone for gaming purposes.

CALENDAR 5 TIMES

I think a calendar might be used 5 times per day, once to make a new entry per day, 3 times to see whats up next, and once to edit or delete an entry.

SOCIAL MEDIA 9 TIMES

Accessing Facebook, Twitter of the like perhaps 5 times per day. As the usage tends to be longer, there is plenty of opportunities to be interrupted, so I'd say 2 interruptions and resumptions per day. Remember, we are talking of typical users, not heavily addicted youth, so the usage is not intense, also these users are not on 'all you can eat data plans' so their social media surfing is somewhat limited by the costs involved.

NEWS 6 TIMES

Nearly half of all mobile phone owners already consume news on their phones. It would mostly be on two primary types, the type where you go find the news ie access your fave news site(s) like the BBC or CNN or for pop music celebrity news, MTV etc.. And then there are the alerts you may subscribe to. I'd say 4 news alerts arrive per day and we actively go to news sites twice per day, for a typical user.

SEARCH 3 TIMES

And yes, increasingly we use search on our phones. But the search behavior is markedly different from PC based online access to Google and our other search engines. Mobile search is often urgent and very specific. But it often becomes the most valued app and service on the phone. A third of people in New Zealand have for example used mobile search to settle a bet or argument. Like I say, the mobile has become the Magical Truth Machine in our pocket. But lets say the typical user only searches 3 times per day on the mobile (remember, several hundred million internet users on mobile don't even own or have access to any PC based internet device, their dumbphone and its web browser and clumsy keyboard interface is the only internet they have access to - and at per-use data charging too!)

WEB 3 TIMES

And random internet services. Going to the website of the bank, or the travel agent, or the ecommerce site, or whatever. Again, I'd think this number is easily much bigger, but lets keep it at 3. Remember, these are NOT touch screen iPhon-a-clones, these are rudimentary basic phones, featurephones at best.

VIDEO 6 TIMES

Mobile videos are easily addictive and many carriers offer special video tariffs on their 3G data plans etc. We often receive links to videos, and videos can be sent and received via MMS. I'd say we watch 4 video clips per day, interrupted once, and resumed once. That gives us 6 uses relating to video. This also includes saved videos on our phones, something we shot on our own cameras, something that was forwarded to us, or perhaps moved via a microSD card or Bluetooth. And isn't it funny, we will look at that tired short video clip many many times when we have nothing else to do...

CHARGING PHONE 3 TIMES

And then the charging of the phone. We connect the phone, we come to see if its charged yet (not yet) and we remove the charger when the battery is full or we can't afford to wait longer. Three times we looked at the phone relating to its recharging, on a typical day.

VOICE MAIL 1 TIME

And we access our voice mails perhaps once per day. Remember, when one of our calls is redirected to voice mail, we are indeed using someone else's voicemail but it doesn't require us to do anything at our end, its just that the voice call was kind of hijacked by the voicemail system. But when we have to go listen to our voicemails, then yes, we have to make the extra effort. 

If my math is correct, we are at 140 times per day. Then lets toss in random other uses about 10 times per day, including maps, downloading apps, voting for TV shows, using the torch/light feature (or turning the screen on in the dark for same effect), showing the phone such as placing it on a table, doing the SIM-card-switch, sending or receiving Bluetooth files, installing or removing microSD cards, replacing the battery, receving a mobile ad, making a m-payment like parking, bus ticket, lottery, or looking for a WiFi connection, double-checking battery status, etc etc etc etc etc.

That gives a totally plausible 150 times per day for a non-smartphone user who is not a massively over-addicted youth user either.

So what do you think? Did I miss obvious areas that have large usage globally across all ages and demographics - remember, we cannot focus on smartphones, only one in five mobile handsets in use today is a smartphone (but are now selling more than half of new handset sales in many countries, so this will change rapidly).

All analysis here not explicitly identified by source is source: TomiAhonen Consulting January 2013. The data and examples and calculations in this blog may be freely shared and also may be freely turned into any graphics. 

And for those who need to understand the mobile market more deeply, check out the TomiAhonen Almanac 2012 - buy it now, get the 2013 edition when it is released in a few weeks, for no extra charge!

Countdown to Mobile Moment - When Will Mobile Phone Accounts Outnumber Humans? I say July 2013 (we are at 6.7B already)

So its that monster year not just in mobile and tech, but in human history. We will experience the Mobile Moment this year, 2013. The moment in time when human evolution reaches the point, where a single consumer gadget exceeds the total human population by users. So we are now counting down to yes, the moment when mobile phone accounts, or 'subscriptions' or some may say 'users' or 'mobile phones' will exceed the total human population alive. Not measured in household penetration rates, nor of adults, but measured in total humans alive.

Never in human history has any gadget or technology achieved 100% penetration levels. Not cars, not motorbikes and mopeds, not even bicycles. Not the Walkman, not the CD player, not the television, Playstation, VCR, DVD player nor even radio. Not the PC, not the internet. Not even such basic necessities we all expect, like running water or electricity. The wristwatch may have seemed ubiquitous, but it wan't. It never reached every wrist. The pen and paper technology, basic pencils, do not reach the total human population because still 800 million adults on the planet are illiterate and have no use for such a technology. But even illiterate humans, beyond the reach of electricity are using mobile phones today. (yes in many parts of Africa and Asia and Latin America, schools provide free recharging service for mobile phones, as an incentive to have the parents send the kids to schoo. and get their phones recharged, for those living in villages and farms that don't have electricity)

But mobile. Mobile reached 6.7 Billion active accounts/subscriptions last year by December 2012, and grew from a little over 6 Billion, adding over 650 million new accounts ie grew new paying users by 11% in just one year. (Isn't this an awesome industry, the fastest-growing Trillion-dollar industry in human history, and the epicenter of all digital convergence). And how, this year, we will definitely add at least another 600 million, probably even more than that. So this is the historic year, when we will have the 'Mobile Moment'. A gadget or technology will grow to become bigger than total human population. Mobile accounts already are bigger than the populations of Europe, Oceania, Latin America, the Middle East and even North America. Asia is almost at 100% and Africa will reach 100% penetration rate level well before this decade is done (they are already past 70% penetration rate). Leading countries are past 200% like the UAE and Hong Kong.

So now we are on the countdown to the Mobile Moment. When will it happen? My current projections say it will happen in July of 2013. The planet is at 7.07 Billion humans and we are at 6.71 Billion mobile subscriptions now in January 2013. We are growing new mobile accounts at a rate of about 54 million per month.

Now, remember, the total mobile subscription count is not the same as actual mobile phones in use (that is less, as some will have multiple accounts but use one phone, and do the SIM-card-switch between different carriers/operators to save in costs or optimize in telecoms traffic behavior). Also remember, because some of us have two phones, and others who have one phone have more than one account, and as some of the mobile accounts are actually machine-accounts (electric meters, watering irrigation systems, healthcare warning systems etc) the actual number of 'unique users' as human beings is well below that magical number. But these are the numbers at the end of 2012:

MOBILE SUBCRIBERS, PHONES, AND USERS AT END OF 2012
Planet . . . . . . . . . . 7.1 Billion humans
Mobile accounts . . . 6.7 Billion total active subscriptions (94% of all humans)
Phones in use . . . .  5.2 Billion including those with 2 phones (73% of all humans)
Unique users . . . . . 4.3 Billion humans who have at least one phone and account (60% of all humans)
Source: TomiAhonen Almanac 2013
This data may be freely shared

Lets see as the numbers start to come in. I expect some analysts to jump on the mobile moment number earlier, and also, that as we'll hit the 7.0 Billion active accounts number before technically passing human population count at almost 7.1 Billion, we may see the seven billion number celebrated around May or June.

But yes, this is the monster number coming this year. It will be widely reported and a lot of pundits will give their commentary on fhis pervasive technology. So a few quick thoughts - most of those phones in use are not smartphones (only 1.1 Billion were at the end of last year). The number 1 used service on those mobile devices is no longer voice calls, it is SMS text messaging. More than two out of three phones in use is a cameraphone so for most humans on the planet, the only camera they have ever used, was on a phone, not a stand-alone Canon or Nikon or Olympus haha..

As to services, more than a third of these mobile phone users access the internet on their phones at least part of the time and nearly a third access news on their phones. 60% of mobile phone owners have received advertising on their phones already so mobile is becoming the biggest advertising platform by reach, totally dwarfing television, print and the PC based legacy internet, and rivalled only by radio anymore. And yes, obviously, all data in this blog may be freely shared and re-used and translated and turned into infographics etc.. Please provide links back here if you do and also tell me via Twitter - I am @tomiahonen of course - and I'll tweet links to your articles that talk about these numbers.

I'll be giving you a lot more data on the mobile industry as we near the publication date for the brand new TomiAhonen Almanac 2013 edition, but if you wanted all the mobile data in an ebook/mbook that you can save on your tablet, laptop or smartphone - now's the time to order the TomiAhonen Almanac 2012. Anyone who buys the old edition now, gets the new edition also, for the same low price of ony 9.99 Euros. A great value on the 180 page statistical compendium of all major mobile industry stats. So check out the TomiAhonen Almanac 2012.