Handset Country Share Tracker

A vital tracking tool for helping companies measure the success of competitors and partners in their local markets.

May 20, 2010 21:05 David Kerr

sa photo dk

 

May you live in interesting times as the old Chinese proverb goes. Well in the information, communication and entertainment industry we certainly do. Some very interesting questions face our industry whether we look at:

  • the outcome of much delayed Indian 3G auction or
  • the battlegrounds around HSPA+ and LTE or
  • the surging Android ecosystem vs. weakening Symbian or
  • the upside potential for WebOS under it new owners
  • the potential disruption caused by mobile cloud phones and device

Every major technology advancement has lead to a massive disruption in the handset and infrastructure vendor community.

  • In 3G, Motorola’s slim myopia led to its near ruin and has provided huge growth for Samsung and a foothold in international markets for LG and SEMC.
  • On the infrastructure side 3G was expertly grasped by Huawei and ZTE leading to a new wave of M & A and a new world order which counts Nortel as a victim and seriously challenges ALU.

So how will the migration to 4G change the playing field?

  • Who will benefit most on the operator/service provider side?
  • Will Cloud Phones be disruptive in LTE?
  • Will operators find a path to realign the traffic/revenue mix with mobile broadband devices?

I would welcome your thoughts on these key questions. Also don’t forget to join our client webinar on Thursday May 27.

 

David


May 12, 2010 15:05 Alex Spektor
From a total handset volume perspective, not much has happened in a year in North America. Indeed, our findings show that the region’s growth during the first quarter of 2010 has been flat on a year-over-year basis. But, if we look closer, we can actually observe a lot of movement within, as smartphone specialists face off with traditional vendors. South Korean vendors Samsung and LG have carved out a nice spot at the top of the market, controlling nearly 50% of volumes last quarter. But, while Samsung continues chugging forward—the vendor surpassed 30% market share for the first time ever—LG should be concerned. After many quarters of strong growth, the vendor is now more than 4 percentage points below its peak market share. Without doubt, its essentially nonexistent smartphone portfolio is to blame here. image Astonishingly, Motorola has remained in the top four despite 12 consecutive quarters of annual declines. However, this time around, Motorola finally yielded the #3 spot to North American neighbor Research In Motion. Of course, Motorola’s Android portfolio is ramping up quickly, with all-time-high smartphone volumes. But, as the vendor continues to shed featurephones from its portfolio, we expect further reduction of volumes. Despite moving up in ranks, RIM has not been seeing stellar domestic performance either. In fact, while everyone around them has been moving up or down, RIM has been standing still. The vendor’s North American market share has been essentially flat for six consecutive quarters. RIM has been (quite successfully) focusing on expanding internationally, but that has come at the cost of stagnation at home. A significant portfolio refresh (more touch?) will be necessary to shake things up. Nokia once again traded places with Apple, losing the #5 spot in our rankings. But, actually, for Q2, my money is on Nokia retaking fifth place. Partly it’s because Apple’s shipments will see a lull in anticipation of the next-generation iPhone. But I also see a lot of potential for the Nokia’s Nuron phone on T-Mobile USA, which offers innovative (read: affordable) smartphone data pricing. In the long run, however, Apple is much better positioned for growth in America, having essentially defined the smartphone experience for the market. Q1 2010 North America Vendor Share -Alex Spektor

May 7, 2010 17:05 nmawston

The big two Chinese vendors, Huawei and ZTE, have initially focused their handset activities on emerging markets, such as ChIndia, Africa and Latin America. Enabled by MediaTek, Qualcomm and Via chipsets, the two handset brands have achieved solid shipment growth in GSM and CDMA since 2007. Both vendors will ship tens of millions of units in emerging markets this year, mostly for low-end prepaid users, giving them a base for scale and buying power. This is phase 1.

Phase 2 of their growth targets mature regions, such as Western Europe and the US. ZTE and Huawei are using their success in emerging markets as a springboard to attack developed markets. The Chinese rightly believe carriers are king in developed countries, and they are quietly partnering with a growing number of the biggest players to deliver carrier-branded hardware. Vodafone recently unveiled 8 new Vodafone-branded models across low-, mid- and high-tiers for its European markets, 6 of which are manufactured by ZTE and Huawei. For example, the Vodafone 845 3G touch-smartphone with Android 2.1 is built by Huawei. The Vodafone 547 EDGE touchphone is made by ZTE. In the US, Huawei made the popular mid-tier Tap touchphone for T Mobile. Carriers like the cost-competitiveness and flexible customization offered by the Chinese brands, and they are useful alternatives to the European, American and Asian vendors such as HTC.

Phase 3 will eventually require a more-complex five-pronged strategy to defend against existing or potential new competitors in the operator-branded handset industry such as Sagem or  Foxconn. Huawei and ZTE will need to upgrade their companies’ competences in:

1. branding;

2. industrial design;

3. portfolio management for build-to-plan products;

4. software usability;

5. content and services.

For now, both Chinese vendors are happy to provide 3G handsets mostly as a delivery tool for operator services. For example, the Vodafone 845 from Huawei is optimized for Vodafone 360 services. But ZTE and Huawei will arguably struggle to sustainably differentiate their own brands on pricing and hardware alone. Developing a software and services (S&S) strategy beyond hardware will therefore become an important value-add for Chinese vendors to attract and retain affluent users in mature regions. An S&S strategy will subsequently open up opportunities for Chinese services brands to partner with ZTE and Huawei to showcase their products in new markets abroad. We have a Google phone and a Microsoft phone; how about a Baidu phone?