Wireless Device Strategies

First to market each quarter with the most accurate and detailed data on handset strategies. The industry’s most timely, consistent and accurate tracking of device vendor KPI metrics, as well as handset market sales and shipment forecasts.

January 21, 2011 19:15 lsui

During the Q4 2010 conference call, Apple highlighted the impressive performance in Greater China (including mainland, Hong Kong and Taiwan) over the past quarter, with the sales of US$2.6 billion, up 400% YoY, contributing to nearly 10% value share. The 4 Apple Stores located in mainland China ranked at the top in terms of traffic and revenue among all 323 stores worldwide, according to the company. Apparently Apple is bearing fruit from the most populated market in the world. According to our Handset Country Share Tracker (HCST) service, China represents over 20% of total legitimate iPhone sales in APAC in 2010. Further considering the strong sales of shuihuo iPhone in China (which refer to smuggled iPhones, usually through Hong Kong) total iPhone sales in China would hit a sizeable share.

As a fashion icon to attract high-end users, iPhone has become the new battlefield for China's operators:

-As it happens elsewhere in the world, China Unicom heavily subsidizes the iPhone.  However, this also puts a financial burden on the operator, as indicated by the increasing 3G capex.

-China Mobile has been taking aggressive actions to attract iPhone users by providing a SIM card cutting service, by which China Mobile can cut regular SIM card to match the micro SIM card that is used for iPhone, making iPhone users be able to keep the same phone number. Moreover, it has announced plans to accelerate its TD-LTE roll out. Bypassing TD-SCDMA, China Mobile will have an LTE network ready before rivals to open the door for future LTE iPhone.

-The availability of the new CDMA iPhone adds fuel on this battle. We expect it to become available with China Telecom mid this year.

In addition to the operator channel, the vendor also plans to open more Apple Stores in China, bringing the total number to over 20 by this year. Moreover, iPhone is also available in selected open channel partners, such as Suning, one of the top electronic chain stores in China.

Improved channel reach, migration towards iPhone 4 and subsidized price all contribute to the record sales of iPhone in China over the past quarter. The possible CDMA iPhone with China Telecom would fuel further strong growth room for the coming year. Although counterfeit "iPhones" that have mushroomed in the grey market will continue to negatively impact sales, legitimate growth should be able to offset the loss to grey market, so we will not be surprised to see another Apple sales record in China in 2011.

- Linda Sui

Global Smartphone Forecast by Region

Vendor Market Share by Country: Q3 2010

January 12, 2011 21:17 Alex Spektor

After years of public speculation, AT&T has finally lost its US exclusive on Apple’s megastar smartphone. As consumers prepare for the arrival of the Verizon Wireless (VZW) iPhone, we address some questions about the impact of this development.

Just how many iPhones will they sell?clip_image002

AT&T customers bought an average of around 4 million iPhones per quarter in 2010. Even if VZW achieves a conservative half of that run rate, it could mean 8 million CDMA iPhones shipped domestically in the first year. In addition to newcomers from other carriers, buyers will include existing subscribers, whose contracts will steadily come up for renewal over the next two years.

Of course, no longer the only option for iOS enthusiasts, AT&T volumes of the iPhone are likely to suffer this year. We can reference the end of iPhone exclusivity in Western Europe for an example of what may happen. As our Handset Country Share Tracker service shows, Apple’s peak share at exclusive carrier O2 UK was 10%. By the time the phone was also introduced at Vodafone and Orange, Apple’s share was roughly just 5-6% with each carrier.

Thus, while Apple’s total volumes are going to benefit as a result of this week’s announcement, neither carrier should expect to see the iPhone account for anywhere near the huge 70% of smartphone volumes that AT&T recorded in Q3 2010.

What impact will the network have?

Aside from a revised radio section and some cosmetic tweaks, the availability of a Wi-Fi hotspot feature is the only official new feature of the VZW iPhone. But AT&T defectors may find one other difference – the inability to simultaneously use voice and data on a CDMA network. As Droid users know, Wi-Fi data access can be used as a limited substitute, but expect outcries of a “lesser” experience from some frustrated buyers. Of course, the inevitable LTE iPhone (in 2012, perhaps?) will eventually equalize this matter.

Unlike AT&T, VZW does not have a bandwidth cap on its US$30/month plan. AT&T’s US$25/month plan provides just 2GB, which protects the carrier’s pipes from overloading, but prevents carefree use of compelling, but bandwidth-hogging apps like NetFlix. Coupled with broad perception that VZW is more reliable, it could mean an upside for the phone’s new carrier. However, we can expect AT&T to send a heavy message about its HSPA network being faster than its competitor’s EV-DO Rev. A.

How will this impact the competition?

AT&T has been preparing for the loss of exclusivity since at least early last year, adding a broad range of Android (and later Windows Phone 7) models. Expect an onslaught of high-end Android handsets (such as the Motorola Atrix 4G) to quickly replace lost iPhone volumes at AT&T, benefitting the likes of Samsung and HTC.

Meanwhile, VZW’s strong Droid brand of Google-phones is likely to take a hit. VZW subscribers looking for a less complex experience than Android’s will find the iPhone to be a gem, cannibalizing the carrier’s own volumes. The real impact, however, will be felt by RIM. The BlackBerry portfolio still lacks a solid full-screen touchphone, and unless the Canadian vendor comes up with one soon, it stands to lose further share with VZW.

-Alex Spektor

USA Smartphone OS Marketshare by Operator: Q3 2010

Global Smartphone Sales Forecast by Operating System: 2002 to 2015