According to the latest research from our Handset Country Share Tracker (CST) service, Apple’s iPhone 5 overtook Samsung’s Galaxy S3 to become the world’s best-selling smartphone model for the first time ever in the fourth quarter of 2012. A rich touchscreen, extensive distribution and generous operator subsidies have propelled the iPhone 5 to the top spot.

Apple’s iPhone 5 smartphone model shipped an estimated 27.4 million units worldwide during the fourth quarter of 2012. The iPhone 5 captured an impressive 13 percent share of all smartphones shipped globally and it has become the world’s best-selling smartphone model for the first time ever. A rich touchscreen design, extensive distribution across dozens of countries, and generous operator subsidies have been among the main causes of the iPhone 5’s success. In addition to the iPhone 5, Apple shipped an estimated 17.4 million iPhone 4S units for 8 percent smartphone share globally in Q4 2012. Apple’s iPhone 5 and iPhone 4S are currently the world’s two most popular smartphone models.

Apple’s iPhone 5 and iPhone 4S together accounted for 1 in 5 of all smartphones shipped worldwide in Q4 2012. This was an impressive performance, given the iPhone portfolio’s premium pricing. We estimate Samsung’s Galaxy S3 was the world’s third best-selling smartphone model and it shipped 15.4 million units globally, capturing 7 percent share in the fourth quarter of 2012. Samsung’s Galaxy S3 has long proven wildly popular with consumers and operators across North America, Europe and Asia. However, global demand for the Galaxy S3 appears to have peaked and Samsung will surely be keen to introduce its rumored Galaxy S4 upgrade in the coming weeks to fight back against Apple’s popular iPhone range.

Exhibit 1: Global Smartphone Shipments & Marketshare by Model in Q4 2012 [1]

[1] Numbers are rounded. Updated total. The Samsung Galaxy S3 total does not include the S3 Mini, S2, S or any other related models. The iPhone 5 total does not include the iPhone 4S, iPhone 4 or any other related models. The iPhone 4S total does not include the iPhone 5, iPhone 4 or any other related models.

Global smartphone shipments surged +40% annually in Q3 2012. Smartphones are a high-growth market. Samsung and Apple top the charts with the world's best-selling models, but Sony, Huawei and HTC are quietly gaining traction. This published report, available to clients of our Country Share Tracker (CST) service, tracks the world's top-selling smartphone families and models by shipment volumes from Q1 2011 to Q3 2012. The report is a valuable tool for component makers, car manufacturers, content suppliers, mobile operators, device vendors and other stakeholders who want to identify and measure the world's most-popular smartphones by individual model, such as Apple's iPhone.

According to our Country Share Tracker (CST) service, the UK handset market grew +6% year-on-year in Q3 2012, reversing the previous quarter’s decline, as Samsung’s continued strength combined with the launch of the new Apple iPhone a month earlier than in 2011 to boost Q3 handset shipments. This published report, available to clients, tracks handset vendor shipments and marketshare at the four major UK operators -- O2, Vodafone, Everything Everywhere and Three -- from Q1 2009 to Q3 2012. The report is an important tool for measuring the health of individual handset brands at the operator level.

According to our Country Share Tracker (CST) service, the German handset market grew by +4% year-on-year in Q3 2012, almost the same growth rate as the previous quarter. Economic headwinds continue to affect the German market, but less so than other countries in the EU like Greece. Samsung remained comfortably the leading vendor in Germany, but lost some marketshare, sequentially, to Apple following the launch of the iPhone 5. Meanwhile, Nokia inched up for the first time in nearly two years. This published report, available to clients, tracks quarterly handset vendor market share at the four major German operators -- T-Mobile, Vodafone, O2 and E-Plus -- from Q1 2009 to Q3 2012. The report is an important tool for measuring the health of individual handset brands at the operator level.

According to our Country Share Tracker (CST) service, the French mobile phone market grew a modest +1% year-over-year in Q3 2012. Handset shipment growth has been flat in France for two quarters now, as the country continues to struggle for economic growth. Samsung dominates in France, while Sony and LG are showing tentative signs of improvement. Free, a low-cost operator, continues to shake up the market. This published report, available to clients, tracks handset vendor market share at the four major French operators -- Orange, SFR, Bouygues Telecom and Free Mobile -- from Q1 2009 to Q3 2012. The report is an important tool for measuring the health of individual handset brands at the operator level (e.g. Apple at Free).

According to new research from our Country Share Tracker (CST) service, Samsung’s Galaxy S3 overtook Apple’s iPhone 4S to become the world’s best-selling smartphone model for the first time ever in the third quarter of 2012. A large touchscreen, extensive distribution and generous operator subsidies have propelled the Galaxy S3 to the top spot.

Samsung’s Galaxy S3 smartphone model shipped 18.0 million units worldwide during the third quarter of 2012. The Galaxy S3 captured an impressive 11 percent share of all smartphones shipped globally and it has become the world’s best-selling smartphone model for the first time ever. A large touchscreen design, extensive distribution across dozens of countries, and generous operator subsidies have been among the main causes of the Galaxy S3’s success. Apple shipped an estimated 16.2 million iPhone 4S units worldwide for second place, as consumers temporarily held off purchases in anticipation of a widely expected iPhone 5 upgrade at the end of the quarter.

Samsung’s Galaxy S3 has proven wildly popular with consumers and operators across North America, Europe and Asia. However, the Galaxy S3’s position as the world’s best-selling smartphone model is likely to be short-lived. The Apple iPhone 5 has gotten off to a solid start already with an estimated 6.0 million units shipped globally during Q3 2012. We expect the new iPhone 5 to out-ship Samsung’s Galaxy S3 in the coming fourth quarter of 2012 and Apple should soon reclaim the title of the world’s most popular smartphone model.

[1] Numbers are rounded. Updated total. The Samsung Galaxy S3 total does not include the S3 Mini, S2, S or any other related models. The iPhone 4S total does not include the iPhone 5, iPhone 4 or any other related models.

Nokia has a healthy working relationship with Microsoft, and the partnership has been growing over the past few years. Recent initiatives include:

• Microsoft Office Mobile Suite for Symbian.

• Microsoft Sliverlight for Symbian.

• The Nokia Booklet, a 3G netbook based on Windows 7.

On the organization front, Stephen Elop, a Microsoft veteran, took over the helms at Nokia earlier this year, bringing both companies closer than ever. While Sliverlight, Microsoft Office, and Windows 7 netbook initiatives are all signs of a healthy partnership, embracing the WP7 platform in its totality takes the relationship to the next level. Shifting the building blocks of your device/software/service ecosystem in favor of third parties is no small decision and will have effect on your intangible sub-brand assets such as Ovi. And that exactly is the rumor from this week, that Nokia will launch WP7 devices in 2011. While we have no official version of the story, it would be interesting to assess the impact of such a partnership in the market. On the positive side, Nokia’s industrial design, distribution and supply chain process are among the best in the industry. WP7 will gain a strong partner in Nokia to bring the best-in-class devices among Windows Phone series. But how much of an impact it will have on Nokia’s platform portfolio, positioning and regional priorities? Where WP7 sits in Nokia’s portfolio?                                        Given the base set of high-end hardware requirements for WP7, the Nokia WP7 device will be positioned in the same premium space occupied by the MeeGo platform. Will Nokia abandon the MeeGo platform in favor of WP7? Or are they going to co-exist, with WP7 focusing on the prosumer and business segments along the same lines of the S60 E-Series? Will there be any major shift in regional platform trends? USA: With an estimated 6% marketshare in 2010 (nearly all basic and featurephones), Nokia has been steadily losing marketshare and carrier shelf space in the US. The partnership is unlikely to change the competitive landscape in the US market, where Apple, HTC, Motorola and Samsung lead the operator shelves. WP7 LTE phones in H2 2011 / H1 2012 might be a potential option for Nokia to make inroads in the US. Western Europe: Microsoft will find more acceptance in carrier channels through Nokia in Western Europe. But beyond the “foot in the  door” strategy, the partnership will have to do little with the success of the platform. In emerging markets, where Nokia has the broadest reach in mid-tier smartphones, the WP7 will be not be the obvious choice for the cost sensitive segments. We believe Nokia will continue to rely on the S60 platform in the mid-tier smartphone segment. Overall, while the idea of a Nokia WP7 device looks like a big win for Microsoft, it’s unlikely to change the prospects of Nokia or WP7 in the smartphone department. Nevertheless, Nokia needs to raise its profile in the US, and this would be a step in the right direction, but it will need step-changes in distribution and subsidies. But for the most part, it’s going to be just another partnership for Microsoft and Nokia – you’re only as strong as your weakest link. - Bonny Joy

Cumulative Shipments, First 8 Quarters

September 23, 2010

While there has understandably been a lot of attention given to consumer apps post iPhone and the plethora of application stores that have emerged, business mobility and enterprise mobility offer huge potential from horizontal to vertical applications and from smartphones to iPads and tablets to superphones.

In both NA and W. Europe, business customers account for under 30% of users but are the dominant streams of both revenue and profits for operators. On the device side, premium priced models from RIM, Nokia, and Microsoft Mobile licensees as well as the iPhone have long been key drivers of profits in a market where low single digit margins are the norm.  The explosion of smartphone choices has led to the battle ground moving beyond the corner office, to other executive and now increasingly the midlevel manager.

With a new range of devices competing for space in the corporate market, the issue of corporate versus individual liable has become an increasing priority for IT decision makers. Add on the complexity of managing an expanding list of OS (Android, iPhone, Windows Mobile, Symbian, Palm, MeeGo, Bada from Samsung) and the growing importance of mobile portable devices with access behind the firewall and one can already feel a corporate migraine forming…. And that’s before we even discuss device management, mobility policy, device retirement etc. etc.

I am looking forward to CTIA Fall (San Francisco October 5-7) and in particular to the Enterprise Mobility Boot Camp moderated by Philippe Winthrop of the Enterprise Mobility Foundation. The boot camp spread over two days will address many of the issue listed above with our own Andy Brown featured in an analyst roundtable on October 6^th.  I look forward to meeting you there. Don’t hesitate to contact Philippe for passes to this the deep dive enterprise mobility event.

David Kerr

David Kerr
Snr. VP - Global Wireless Practice
Tel: +1 617 614 0720
Mob: +1 262 271 8974

• T-Mobile launched the first Android phone in the world in late 2008.
• It took approximately one year for Verizon Wireless and Sprint to bring to market their own models, in time for the 2009 holiday season.
• AT&T began selling its first Android handset quite recently: in March 2010.

• Catering to consumer tastes. Despite what Apple might tell you, not everyone wants an iPhone. Consumers looking for alternative features, such as a bigger screen, memory expansion, a more customizable UI, HDMI, etc., can find them among Android handsets.
• Lower subsidy levels. Now that AT&T has lowered its monthly data plan rates, there is less revenue to offset the subsidy burden. Paying $200-$300 subsidy for an Android handset seems more attractive than Apple’s $400+ subsidy.
• End of iPhone exclusivity? The Internet is always abuzz with rumors, and AT&T shifting its focus to other platforms is yet another sign that a Verizon Wireless iPhone is potentially in the works. The carrier may be strengthening its portfolio to offset potential losses once the exclusivity ends.