Canalys Q3 2009: iPhone, RIM taking over smartphone market
The latest Q3 2009 smartphone market figures from Canalys show RIM and Apple gobbling up the smartphone market as overall growth in the segment begins to slow.
The global smartphone market grew just 4% over the previous year ago quarter, a major slowdown from last year's 27.9% expansion over Q3 2007.
"While growth has undoubtedly slowed, it is still outperforming the overall mobile phone market by some margin, as well as driving data revenue for operators," Canalys analyst Pete Cunningham said in a statement, which also noted that sales mobile phones as a whole actually shrank by 4 to 6%.
Canalys' press release only cited market share percentages for hardware vendors and software platforms, so AppleInsider did the math to chart the changes in smartphones over the last two years. The results were stunning, and contradict conventional pundit wisdom on where the industry is heading.
A reversal on expectations
Nearly all market forecasters have insisted that integrated hardware and software platforms like RIM's BlackBerry and Apple's iPhone can only possibly be temporary successes that will have to make way for licensed software platforms, where one company or open source group develops software and reference designs that a variety of hardware makers can purchase or use for free.
For example, Gartner recently predicted in a widely publicized report that three years from now it expected to see Symbian slipping only a few percentage points to maintain its lead as the most widely used smartphone operating system. This prediction comes despite the fact that Nokia, by far the largest user of Symbian, has already started seeing its share of smartphones drop rapidly, and that the company is earnestly working to invest in alternatives to Symbian, including its Maemo Linux platform.
On the the other end of the scale, Gartner predicted massive 400% growth for Android and 70-80% market share growth for Windows Mobile, while assuming that the iPhone wouldn't grow its market share at all and that RIM would lose half of its share by 2012.
Most other pundits have predicted a similar shift from integrated platforms (Apple's Mac model) to licensed platforms (the Microsoft Windows model), nearly always citing the shift from the fledgling computer market dominated by Apple and similar integrated companies in the 70s to the DOS and Windows PC monoculture that began to flourish in the 80s and 90s.
What the last three years' smartphone numbers actually show is a shrinking on the top and the bottom of licensed platforms, with growth coming from integrated platforms in the middle.
The Symbian monoculture is rapidly shrinking, shown in the blue segments. Apple and RIM, depicted in yellow and green in the pie charts, are both expanding dramatically. Meanwhile, the "other" manufacturers and licensed platforms outside of the top three are all shrinking away as well.
A short list of winners
This type of consolidation in the smartphone industry is the opposite of what everyone has been predicting, but is inline with the historical timeline of other consumer product categories. Examples include music players (a market first dominated by Sony's Walkman and then by Apple's iPod, where efforts to introduce PlaysForSure as a licensed platform simply failed) and video games (long dominated by Nintendo and usually only one or two other significant rivals at a time.)
Many attempts to introduce a new integrated platform into a mature market have fallen flat, both in PCs outside of the Macintosh (something discovered by Amiga, Atari, NeXT, BeOS, and others) and in MP3 players (like the Zune) and even smartphones (there does not seem to be much global market potential for the Palm Pre).
Similarly, attempts to duplicate the business model of Windows PCs haven't worked out well in many places, even for Microsoft. Symbian, which has long been the "Windows of smartphones" outside of the US simply because there weren't many viable global competitors, is now abdicating the throne. But of all the alternative licensed platforms hoping to take its place, from the commercial Windows Mobile to free options including Google's Android and various other platforms built on top of Linux, none are making much progress. Outside of the top three platforms (Symbian, RIM, Apple), "everything else" has shrunk from 20% of the market a year ago to just 15% now.
Rather than eating into RIM and Apple's integrated platform sales, Android appears largely to have cannibalized the use of other free Linux minority platforms and taken the lunch away from Microsoft's Windows Mobile.
The largest backers of Android are HTC (which actually lost market share as its former sales growth plateaued over the last year) and Motorola, which is in such bad shape that it has fallen from Canalys's top five and joined the "other" pool without so much as even creating a ripple.
Again, from a manufacturer perspective, outside of the top three makers (Nokia, RIM, Apple), "everything else" has fallen from 28% to 21% in just a year. This makes it essential for rival phone makers to distract from the smartphone market and talk about the vast numbers of low margin simple phones being sold. However, as that larger market continues to shrink, this will become increasingly difficult to do.
The global smartphone market grew just 4% over the previous year ago quarter, a major slowdown from last year's 27.9% expansion over Q3 2007.
"While growth has undoubtedly slowed, it is still outperforming the overall mobile phone market by some margin, as well as driving data revenue for operators," Canalys analyst Pete Cunningham said in a statement, which also noted that sales mobile phones as a whole actually shrank by 4 to 6%.
Canalys' press release only cited market share percentages for hardware vendors and software platforms, so AppleInsider did the math to chart the changes in smartphones over the last two years. The results were stunning, and contradict conventional pundit wisdom on where the industry is heading.
A reversal on expectations
Nearly all market forecasters have insisted that integrated hardware and software platforms like RIM's BlackBerry and Apple's iPhone can only possibly be temporary successes that will have to make way for licensed software platforms, where one company or open source group develops software and reference designs that a variety of hardware makers can purchase or use for free.
For example, Gartner recently predicted in a widely publicized report that three years from now it expected to see Symbian slipping only a few percentage points to maintain its lead as the most widely used smartphone operating system. This prediction comes despite the fact that Nokia, by far the largest user of Symbian, has already started seeing its share of smartphones drop rapidly, and that the company is earnestly working to invest in alternatives to Symbian, including its Maemo Linux platform.
On the the other end of the scale, Gartner predicted massive 400% growth for Android and 70-80% market share growth for Windows Mobile, while assuming that the iPhone wouldn't grow its market share at all and that RIM would lose half of its share by 2012.
Most other pundits have predicted a similar shift from integrated platforms (Apple's Mac model) to licensed platforms (the Microsoft Windows model), nearly always citing the shift from the fledgling computer market dominated by Apple and similar integrated companies in the 70s to the DOS and Windows PC monoculture that began to flourish in the 80s and 90s.
What the last three years' smartphone numbers actually show is a shrinking on the top and the bottom of licensed platforms, with growth coming from integrated platforms in the middle.
The Symbian monoculture is rapidly shrinking, shown in the blue segments. Apple and RIM, depicted in yellow and green in the pie charts, are both expanding dramatically. Meanwhile, the "other" manufacturers and licensed platforms outside of the top three are all shrinking away as well.
A short list of winners
This type of consolidation in the smartphone industry is the opposite of what everyone has been predicting, but is inline with the historical timeline of other consumer product categories. Examples include music players (a market first dominated by Sony's Walkman and then by Apple's iPod, where efforts to introduce PlaysForSure as a licensed platform simply failed) and video games (long dominated by Nintendo and usually only one or two other significant rivals at a time.)
Many attempts to introduce a new integrated platform into a mature market have fallen flat, both in PCs outside of the Macintosh (something discovered by Amiga, Atari, NeXT, BeOS, and others) and in MP3 players (like the Zune) and even smartphones (there does not seem to be much global market potential for the Palm Pre).
Similarly, attempts to duplicate the business model of Windows PCs haven't worked out well in many places, even for Microsoft. Symbian, which has long been the "Windows of smartphones" outside of the US simply because there weren't many viable global competitors, is now abdicating the throne. But of all the alternative licensed platforms hoping to take its place, from the commercial Windows Mobile to free options including Google's Android and various other platforms built on top of Linux, none are making much progress. Outside of the top three platforms (Symbian, RIM, Apple), "everything else" has shrunk from 20% of the market a year ago to just 15% now.
Rather than eating into RIM and Apple's integrated platform sales, Android appears largely to have cannibalized the use of other free Linux minority platforms and taken the lunch away from Microsoft's Windows Mobile.
The largest backers of Android are HTC (which actually lost market share as its former sales growth plateaued over the last year) and Motorola, which is in such bad shape that it has fallen from Canalys's top five and joined the "other" pool without so much as even creating a ripple.
Again, from a manufacturer perspective, outside of the top three makers (Nokia, RIM, Apple), "everything else" has fallen from 28% to 21% in just a year. This makes it essential for rival phone makers to distract from the smartphone market and talk about the vast numbers of low margin simple phones being sold. However, as that larger market continues to shrink, this will become increasingly difficult to do.
Comments
In 2007, the year Apple entered the market, MS had 3 times the market share of Apple in Q3. By 2008 it had fallen behind and now has less than half of the market share of Apple.
It had an opportunity to get back in the market with Zune HD, if it had made it's platform easy to port to mobile devices and included an App Store.
It will be interesting to see how Android gets on.
Phil
It will be interesting to see how Android gets on.
Phil
Well it should do well considering the amount of hardware support it will receive. The Symbian figures should be proof of that.
The latest:
http://www.macdailynews.com/index.ph...rldwide_smart/
Symbian's huge loss of share points between 2007 and 2008 would make any company stand up and take notice. I also expect this is why Nokia is going after Apple in court right now. But there's no excuse for the shape that Windows Mobile is in. Microsoft literally sat on their butts and paid no attention to getting any modern technology out the door to remain competitive. Even worse, Apple gave them a six month head start when the iPhone was announced in Jan. 2007 and here it is, the end of 2009 and their iPhone killer OS still hasn't seen the light of day. Of all of the vendors who had the resources (people, deep pockets, technology) to put out an iPhone killer, it's Microsoft. No wonder their vendor partners (Moto, HTC, Palm) are moving on to Android and WebOS. Completely inexcusable.
Of all of the vendors who had the resources (people, deep pockets, technology) to put out an iPhone killer, it's Microsoft.
You forgot to mention...developers...developers...developers!!
Well it should do well considering the amount of hardware support it will receive. The Symbian figures should be proof of that.
Symbian has historically been Nokia, with some Sony Ericsson phones, NTT DoCoMo in Japan and a lot of tiny vendors. So no, it really doesn't portend vast potential for Android, unless Nokia itself picked up Android, which it has zero interest in doing, as this would simply give Google all of Nokia's potential business and control over user market data.
And since Android currently offers nothing but pundit buzz (no software base, no great technical sophistication, no user demand), Nokia could build its own future platform from Maemo or Symbian^2 and keep all that. Which is why that's exactly what the company is doing.
"There's no chance that the iPhone is going to get any significant market share. No chance." Microsoft CEO Steve Ballmer, April 30, 2007
The latest:
http://www.macdailynews.com/index.ph...rldwide_smart/
From: http://www.themistermen.co.uk/mr_men....html?wrong/mr
Mr Wrong hasn't got a clue what he is doing ever, and he never gets anything right. Everything turns out WRONG! Everything about his life is a shambles until one day Mr Wrong meets Mr Right, someone who looks exactly like Mr Wrong, but is exactly his opposite.
I loved those books as a kid.
So no, it really doesn't portend vast potential for Android.
I'm not predicting anything momentous but merely stating it should do well. We'll leave Ballmer to make predictions but Apple had 3% + market share when it set out in 2007 which is where Android is starting at now. Google also have Chrome OS and i'd put my money on that over Nokia's Maemo any day of the week.
Still we'll see in the fullness of time.
There is something to be said about a well executed platform with multiple vendors. There is clearly a market for it. But again, it has to be well executed. Motorola badly needs Android to succeed. The bloodletting in the once premier cell phone maker is so apparent by these numbers. My first cell phone was a Moto but it's going to take a tsunami now to pry me away from my iPhone.
I could only take 1 year of horrible AT&T service with the iPhone and recently switched to an HTC Hero through Sprint. Honestly, the Hero is a decent device but not in the same class as the iPhone. It's not any one thing, but the overall feel of the Android OS isn't as clean or polished as the iPhone. Of course this will improve over time, but so will Apple.
If the iPhone was available on Sprint or Verizon I'd be buying a new iPhone immediately and saying goodbye to Android.
"Most expensive phone" - SB is really thinking, wow, if only MS could sell premium products in high volume
"I like our strategy, I like it alot" - SB is really thinking, oh dear, I'm on borrowed time. Once the shareholders see a falling market share, they'll demand I leave my post.
"Doesn't appeal to business,because it doesn't have a keyboard which doesn't make it an email machine" - SB really thinking, oh, the on screen touch keyboard is easier to use that cramped buttons. This machine is going to be really easy to use for emails. Wonder if I get one, will I be able to hide it well.
"we are selling millions and millions and millions of phones per year, Apple are selling zero phones per year". SB really thinking, oh dear by 2011 we'll be dead in the water with Apple selling millions of phones and MS selling zero".
"we took 25% of the high end of the [MP3] market": really!?!
Message to MS shareholders: Time is ticking, you need to decide whether this guy is a time bomb waiting to explode your investment. Maybe time to look for a new leader!
http://www.youtube.com/watch?v=C5oGaZIKYvo
"Most expensive phone" - SB is really thinking, wow, if only MS could sell premium products in high volume
"I like our strategy, I like it alot" - SB is really thinking, oh dear, I'm on borrowed time. Once the shareholders see a falling market share, they'll demand I leave my post.
"Doesn't appeal to business,because it doesn't have a keyboard which doesn't make it an email machine" - SB really thinking, oh, the on screen touch keyboard is easier to use that cramped buttons. This machine is going to be really easy to use for emails. Wonder if I get one, will I be able to hide it well.
"we are selling millions and millions and millions of phones per year, Apple are selling zero phones per year". SB really thinking, oh dear by 2011 we'll be dead in the water with Apple selling millions of phones and MS selling zero".
"we took 25% of the high end of the [MP3] market": really!?!
Message to MS shareholders: Time is ticking, you need to decide whether this guy is a time bomb waiting to explode your investment. Maybe time to look for a new leader!
SB needs to go. Enough of this clown.
SB needs to go. Enough of this clown.
No he needs to stay. He's doing a far better job of dismantling MS than any Mac community could ever do. You never know he could be an Apple insider?
No he needs to stay. He's doing a far better job of dismantling MS than any Mac community could ever do. You never know he could be an Apple insider?
Some competitor MUST be paying him to do and say all that.
"There's no chance that the iPhone is going to get any significant market share. No chance." Microsoft CEO Steve Ballmer, April 30, 2007
So what --- he was talking about $600 iphone with a 2 year contract that is simlocked with revenue sharing.
Circumstances change.
Apple bulls like Munster saying 45 million iphones in 2009 --- he is a genius. Apple bears saying 25 million in 2009 --- apple fanbois with pitchforks chanting death threats. You know what? Munster lowered his estimates back down to 25 million iphones a few months ago.
I rather prefer these people be realistic.
And since Android currently offers nothing but pundit buzz (no software base, no great technical sophistication, no user demand), Nokia could build its own future platform from Maemo or Symbian^2 and keep all that. Which is why that's exactly what the company is doing.
Android has over 10k apps, a maturing SDK, OS and user-base. It?s also free, mostly open and modern. The Ovi store looks like a failure and Symbian is too legacy to compete well with the higher-end smartphones.
I think Android-based devices will gain in popularity with v2.0 as it picks up the lower-end and mid-range of that market for all vendors and higher-end for non-AT&T customers in the US, while Apple cleans up the upper end of the consumer devices.
I wonder if Nokia?s best chance to save itself from falling marketshare and, more importantly, profit is to buy Palm or license WebOS. It?s a solid OS with room to grow, but Palm is fraking it up in many way. One is their very poor idea of an SDK.
RiM will still dominate as they have a very solid product, but they keep going cheaper and cheaper with the handsets while the need for BES and services, which is the bulk of their revenue, keeps falling with so many mobile OSes licensing ActiveSync. They need a new plan if they want to maintain their corporate dominance in the foreseeable. If the iPhone and Android fix some glaring corporate-related usage problems it?ll be a fast fall for BBs.
I could only take 1 year of horrible AT&T service with the iPhone and recently switched to an HTC Hero through Sprint. Honestly, the Hero is a decent device but not in the same class as the iPhone. It's not any one thing, but the overall feel of the Android OS isn't as clean or polished as the iPhone. Of course this will improve over time, but so will Apple.
If the iPhone was available on Sprint or Verizon I'd be buying a new iPhone immediately and saying goodbye to Android.
If you are THAT pissed over the AT&T service why not Jailbreak your phone and stick it on any carrier you damn well want?
Why is it that all you ever hear about it how bad AT&T are but never "...and since i jail broke my phone and switched to Verizon i've realised that i was nothing more than an AT&T hating sheep and ALL cell companies will have issues, Just there are more people on AT&T and Apple web forums that like to bitch about it".
Seriously if you "loved" your iphone so much to trade it in for a Hero why wouldn't you have looked at the alternatives first. Or was it easier to jump ship first and then bitch about it later?