IDC projects Windows Phone to surpass Apple's iPhone by 2016 - Page 3

One of the interesting things about this particular analyst, IDC, is that they don't allow the empirical evidence to sway them, which is more the work of a cult than a  team which is supposed to give people advice on investment. 

 

Look at their 2010 report. Absolutely everything is wrong. Their "model" over emphasises, every time, Blackberry, Nokia and Windows phones. And underestimates iOS and Android. With the collapse of Symbian - even the CEO of Nokia didn't believe this report -  they moved on to amalgamating their predictions for Symbian and Windows into one percentage. When their model fails - and I cant think of a bigger failure than that prediction for Symbian in 2014, they never apologise, and use the same model again.

 

A year or two before the 2010 prediction they showed iOS at 5% by now - just about where it was. In all these years Apple has pretty much beaten, or kept up with a rapidly growing market. Even when Android was at full tilt. So Apple clearly grown from 10% of the smart phone market in 2010 to 20% now, and it continuing to outpace the market. IDCs prediction of y-o-y growth for iOS is way off. So whats the story now? In the latest report they see apple growing at 10% y-o-y, while Android falls to 9.5%. While Android is slowing, Apple is about 80% y-o-y as it always has been. Both are way off. The empirical evidence that they were wrong on iOS growth before - and Android too - has no effect on their model. They plug in the same, or higher growth rates, to Blackberry and Windows to get to their previously decided upon figure, which in windows phone's case is always ahead of iOS, and always 4 years down the line.

 

The reports even do this from report to report. Last years report saw windows overtaking iOS in 2015, and saw it having 86% CAGR (yoy) while Apple would drop to 10%. The opposite happened last year, Windows in total has stalled, so they predicted the same again this year. From now Windows will grow at 86%, while Apple drops to 10%. Next year, it will be 2017.

 

Can people sue em?

Trust me, Bing sucks no matter where you are. And I have never heard anyone say something like, "Hey, find out about the new S3. Just Bing it." Google and search have become synonymous. bing is like wp7. Looks and works okay, but 4 years late to a crowded party, and still limited in capabilities.

 

In my opinion it is not justified to consider past growth rates as "empirical evidence". Clearly a rapidly growing Android will have to slow down after having reached over 60% market share, simply because there's no more place to grow, all other factors notwithstanding. OTOH, WP growth could become much faster once a certain critical mass is achieved, which could be IDC's justification for using the same CAGR -- they just seem unable to predict correctly the rate until this critical mass is reached.

 

Anyway, predicting 4 years ahead is clearly unreliable, as evidenced by the historical data posted by others in the thread...

Fair enough, nobody is denying that Android has to slow, the law of large numbers applies there for sure. However, I am talking about their methodology of guessing Apple's growth. Last year they used a model which assume that Apple would grow at about 10 percent y-o-y from then, in general slower than the market. This year, after Apple surpasses that growth spectacularly, they ignore last year's success in their models, and  use last years prediction again. Similarly in the 2010 model Apple falls market share by 4%, growing slower than the market, and again, thats a failed prediction. With BB its the opposite, it is now expected to grow with the market, and maintain its position, pretty much, and that is what they predicted in 2010 for 2014 - from a higher base. The fact that BB went into free fall in market share in the last two years not incorporated in their models. Nokia has warned this year. Not in the models. The lumia has been a disappointment. No effect on the models.

 

This is what I mean by not regenerating their models, as the evidence changes.  Their excuse here is that Apple has saturated it's market. It hasn't. As we have seen in the US, when it moved to more carriers it increased share. Not in their models. t-Mobile is yet to come, not in the models. Apple has yet to produce a cheap phone for the emerging markets - not in the models but they assume that Windows will get this market, but Windows 8 has pretty high requirements as it happens. So they are assuming cheap Windows models, but no attempt to grow market share with cheap phones from Apple. It might not happen, but I can see a cheap iPhone at some stage.  And Apple is not on all carriers yet. Plenty of growth, as Cook himself points out. Besides all that Apple has a higher retention rate than Android, and 38% are new to the platform, this alone would guarantee - if extrapolated - growth in an otherwise saturated market. 

 

But th emost important thing is that they have been spectacularly wrong for years, and I don't think that predicting 4 years out is that hard.. Maybe the iPhone was hard to call in 2007, by 2010 it had achieved a momentum it still continues with - all they had to do was extrapolate that growth, and they would get where Apple is now.

 

Surely these guys are the worst forecasters in any business ever?

If Android has to slow down growth rate-wise, how does that magically make for more room for Win8 phones in the marketplace?  The marketplace size is the marketplace size and growth within that space is necessarily zero sum.   Even making room for marketplace growth, there is no magic means for changing market share trajectories.  Somebody has to produce something substantially differentiated to dramatically change market shares, and just another smartphone is not a dramatic change.   

 

Apple and the Android copyists did that when the iron was hot and have defined what a smartphone is and will be for the short to medium term.  Anyone who thinks Microsoft is capable of radically redefining that marketplace is ignoring how MS does business.  Win8 phones will get some market share, sure.  But flip the entire market upside down in three years just because?  No chance, there is no automatic market share "just because", and even less when part of your justification for it has some sort of artificial size limiter for the existing players already in the market.

Another point of interest:

Windows phone will beat iOS by 0.2% - 19.2% vs 19.0%. Why? How they got this precision?

Never mind, it is good enough to make a headline: Microsoft beats Apple in phone marketshare by 2016.

And that's the whole point right? 

 

The market as a whole is growing, so if Android grows at a slower rate it will lose market share. I also don't think dramatic changes in smartphones are necessary to effect change, there seems to be a fairly large irrational element of fashion in this industry...

 

Besides, going from roughly 5% to 20% in 4 years isn't turning the market upside down as you describe it. It doesn't seem that big of a deal at all -- Android went from 0 to 60% in the same amount of time, with iOS, Symbian and BB already on the market.

 

iPads and other iOS devices are making inroads in enterprise, too. IBM consultants may be able to push them back with corporate fatwas, though.

 

I use Bing almost exclusively.  I have set it as the default in Safari, Firefox, Chrome (hah!), and mobile Safari on most of my computers and mobile devices.  For most of what I use a search engine for, it works fine.  Occasionally for really obscure things or technical things, where I don't get satisfaction from Bing, I will manually go to Google and try that.  In those outlier cases Google usually, but not always, does better.  For me it is mostly an "ideological" position.  Google is the new MS.  I don't have any desire to help Google make any more $$$.

 

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What has the law of large numbers got to do with this?

 

I whole heartedly agree with your first point. Whilst smartphones have been around since since the begining of the centuary the market is still in its infancy. As an infant market the press have a far greater influence over customers than one would expect in a mature market.

 

If you ask the average punter why they purchased their given OS they will often with reply with a marketing mantra. I often hear iPhone owners say "Because it just works" or Andriod owners "Becasue I can do whatever I want on it". The irony being that most of them went straight to their new phone from a feature phone and have little or no practical experience of any other smart phone.

 

I have now idea if the IDC's predictions will prove true or false but it does seem likely that the abnormal (iPhone) profits currently enjoyed by Apple will erode in time. Most phone owners purchase subsidised handsets. At the moment carriers are still happy to allow all of their customers to subsidise the iPhone as they try to convince customers to migrate away from feature phones. As the market reaches saturation the carriers will start to reduce the subsididies on the iphone and thus sales will drop off. If Apples' goal is market share they will need to drop the wholesale price of the iphone or produce a range of phones, in particular budget versions. If their primary goal is profit then they will carry on as they are and not care a jot about market share. That latter however is muddied by the App ecosystem which needs market share to be profitable. Here apple have an advantage, they can sell apps via mp3 players, phones and tablets but this position can be eroded by the convergence of all 3 devices. Perhaps this is the longer term goal of microsoft with Windows 8, lock people into the market place ecosystem and they will migrate to WP8 rather than try to push WP7. In the short term it seems to be back firing though as customers are concerned that their WP7 will become obsolete once WP8 rolls out.

 

It goes without saying that all of the above could become moot if the carriers decide that they aren't making enough from data contacts and decide to hike up prices. Features such as siri and googlemaps will become prohibitively expensive and we will have smart phone owners using their phones as feature phones...

The subsidies issue is a non-issue, iPhone users pay for more expensive plans and use more data earning close to $2000 per iPhone customer. In the long term iphone prices will be reduced on average, all that needs is cheaper models, but this will effect margins not revenue. Big deal.

As much as a love windows phone, I can't see this happening. Unless they can get passed the issue that carriers want to sell android over windows there never going to get the sales. Most phone shops only have 1 or 2 windows phones compared to 20 to 30 android, so it's no surprise there not selling as well. That and the face the marketing campaigns are awful.

It depends on who you listen to. Apple claim it is not an issue but most other observervers claim that it is.

 

$2000 per customer is meaningless if, as a carrier, you can't make any profit and are forced to increase costs elsewhere.

IDC not only projects Android as the mobile OS leader they predict Android to be the overall number one OS in the world by 2016, surpassing Microsoft Windows PC numbers. Gosh...

 

"In terms of platforms, IDC expects a relatively dramatic shift between 2011 and 2016, with the once-dominant Windows on x86 platform, consisting of PCs running the Windows operating system on any x86-compatible CPU, slipping from a leading 35.9% share in 2011 down to 25.1% in 2016. The number of Android-based devices running on ARM CPUs, on the other hand, will grow modestly from 29.4% share in 2011 to a market-leading 31.1% share in 2016. Meanwhile, iOS-based devices will grow from 14.6% share in 2011 to 17.3% in 2016."

The mathematics are simple. There is fud by people with an anti-Apple agenda, and the actual stats. Apple users use more data and pay more. Data is not cheap, if the carriers can't make a profit then there is no market, in fact they do - about 40%, and there is a market.

I  have no idea how much is indeed fud but do you have any evidence to substantiate your claim that they make 40% profit, can you even explain what they are making 40% profit on?

 

The impression that i get from elsewhere is that the carriers are currently (still) willing to pay substantially more for the handsets because they see it as the easiest way to coerce owners to data tariffs from feature phones.

 

As you point out, iPhone owners consume more data than android owners. In a market where more carriers are offering "all you can eat" data tariffs I would have assumed that any new customer on an android is more attractive. Lower subsidies and lower running costs...

I would have assumed that there were already more symbians than windows PCs, or even household appliances, eg dvd players etc, than Windows.

 

Those kind of comparisons are rather silly. Calling a tablet a PC is one thing but calling an android a PC is stretching things a tad too far.

Also related, Android activations now averaging 900K per day, up 50K/day since February.

Yes related, but not that relevant.   A huge number of those activations are third world low end phones (like you can get for free with the 600mhz processors) that are replacing feature phones.   The number of apps being bought per phone on Android is way low compared to iOS.  That shows that most of these phones are really feature phone replacements and not being used as real smart phones.

 

Look at the total of the high end Samsung and Moto and HTC phones to see what the relevant Android activations are.