Wireless Smartphone Strategies

The industry’s most comprehensive set of critical market statistics and qualitative analysis, tracking and reporting on smartphones.

January 3, 2014 19:28 nmawston

According to our Wireless Smartphone Strategies (WSS) service, Xiaomi's worldwide smartphone shipments grew a huge +271% YoY in Q3 2013, pushing into the top-10 smartphone-ranking list for the first time ever. It took 2% global smartphone volume share this quarter. Xiaomi's online business model has proven to be successful in China, and its overseas strategy is firming up with developed Asian markets as the most likely next step. Could the United States follow soon after? This published report, available to download by clients, examines that question and more.


January 10, 2012 15:07 Alex Spektor

Yesterday’s Nokia announcement at CES of an AT&T-bound Lumia 900 Windows Phone with LTE represents a significant win for the device vendor, whose marketshare in the smartphone-hungry North American market, as illustrated here, has been on a steady decline for at least the past 4 years.

Together with the earlier-announced T-Mobile version of the Lumia 710, Nokia will now have at least two smartphones selling in the US that are not based on Symbian, a platform that had only niche appeal to US consumers and operators.

According to the Strategy Analytics Handset Country Share Tracker (HCST) service, T-Mobile was Nokia’s most important operator client for smartphones in the US in 2011, as the vendor’s business-centric Eseries devices are long gone from AT&T’s portfolio. So what is likely to happen with the arrival of the two new Lumia models?

At AT&T:

  • Time-to-market will be a critical factor for the Lumia 900. Rival HTC has also just announced its first LTE Windows Phone, the Titan II, which could steal some of Nokia’s thunder with an early arrival. Highlighting unique-to-Nokia capabilities like Drive navigation will be critical in attracting Windows Phone buyers.
  • The Lumia 900 alone will not instantly catapult Nokia into first, second, or even third place at the operator, and the vendor will be faced from heavy competition from Samsung and HTC, both of whom will be fighting for the #2 spot behind Apple.
  • RIM, with its below-average superphone portfolio, could be hurt the most here. If, indeed, there is only room for 3 competing platforms, then AT&T’s OS-diverse portfolio could squeeze the BlackBerry maker’s volumes in 2012.

At T-Mobile:

  • Following the recent arrival of the Sprint iPhone, T-Mobile has become the only major US operator without a strong third platform.
  • The low-priced (US$50 with contract) Lumia 710 will have a lot of appeal to cost-sensitive feature phone upgraders.
  • Nokia will not compete with pricy HSPA+ 4G superphones, but rather will take volume from more low-end devices from Samsung and LG, as well as T-Mobile’s own myTouch brand, as consumers look for a simpler alternative to Android.

Ultimately, the success of these two handsets depends largely on the level of promotional support given to them by the operators, especially in retail stores where a lot consumers make their decisions based on sales rep recommendations. Nokia has been working closely with both carriers on this dimension, winning critical drive slots and retail display real estate.

Finally, it is worth to note the significance of both the AT&T and the T-Mobile phone carrying the Lumia sub-brand, rather than their own re-branding. Globally recognizable, memorable sub-brands have been key parts of the strategy for the world’s leading smartphone vendors (e.g., Apple’s iPhone and Samsung’s Galaxy). In the operator-dominated US market shared brands are still a rarity, and we see this as a positive sign for Nokia’s long-term recovery.

Alex Spektor
Wireless Smartphone Strategies


January 5, 2012 10:58 sbicheno

This year’s Consumer Electronics Show (CES) takes place in Las Vegas, USA, from Tuesday 10th to Friday 13th January, 2012. There will be dozens of major and minor announcements vying for your attention, but here are three trends we recommend to look out for at the show:

 

1. Windows Phone LTE handsets

While the main mobile event of the year -- MWC -- occurs a mere six weeks afterwards, CES tends to feature a number of major handset launches of its own -- especially those with a strong focus on the valuable US market. This year, the Windows Phone ecosystem plans to revitalize its assault on the US market with a raft of LTE handsets to counter Android 4.0, Apple iOS 5 and BB10.

A hotly tipped 4G model is the successor to the Nokia Lumia 800, Nokia’s first flagship Windows phone, which was not launched in the US. Instead, Americans could get the opportunity to see what may be Nokia’s first ever superphone, perhaps an enhanced Lumia 800 with a larger screen and LTE, which could be called the Lumia 900 or simply the Nokia Ace. It is important that Nokia gets its sub-branding right for the American market, so we will be watching this one closely.

Elsewhere, HTC should be ready to launch its own LTE Windows Phone devices, while rumors indicate Samsung’s contribution to that market may also be imminent. Sony Ericsson, despite being a launch partner for Windows Phone 7, has been conspicuous by its absence so far. That might be about to change, however, if the ‘tile’ theme for its official pre-show teaser (below) is anything to go by.



 
 Source: Sony Ericsson



2. Intel Medfield devices

Despite initial hype, we’ve seen few LG Windows Phone launches in recent quarters. Two years ago LG was a lead OEM partner for Intel’s Moorestown mobile chip. Unperturbed by the absence of that chip in the broader marketplace, rumor has it that the successor to Moorestown -- the 32nm Medfield chip -- could soon make its public debut inside an LG handset.

After keeping a low mobile profile in 2011 (excluding the Infineon purchase), we expect Intel to make a bigger noise about Medfield at CES this year. While it remains to be seen whether the chip giant has managed to crack the handset market, we would be surprised if Intel didn’t significantly raise its profile in tablets, with the anticipated launch later this year of Microsoft’s Windows Phone 8 and Windows 8 possibly its best opportunity yet.

But the loudest Intel-related noise may well come from ultrabooks -- the ‘thin, light and fast bootup’ notebook platform designed to serve the market demand suggested by the popularity of the Apple MacBook Air and iPad. While not all of the ultrabooks will feature 3G chipsets, they are being positioned as ‘ultra-mobile’ devices, so that would eventually seem a natural feature for many to have.

 

3. More smartphone-to-smart-TV convergence?

2012 is the year that many major players will have a fresh crack at smart TVs. Google’s first effort last year ran out of steam pretty quickly, while Apple is publicly treating TV as nothing more than a hobby. However, we expect both companies to renew their focus on the living room in 2012, and where better to make a statement of intent than CES?

Given the expected overlap with their mobile platforms -- Android and iOS -- it stands to reason that Google and Apple will look for ways to more closely integrate your mobile device with your TV. Not only does this increase the functionality for end-users -- for example, by using the device as a remote control for media streaming -- but potentially leverages the existing commercial relationship into new product areas. Apple will not be formally present at CES, of course, but Android hardware partners we recommend investigating at the show include Samsung, LG, Sony and even Vizio.



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


December 22, 2010 16:12 bjoy
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

December 8, 2010 13:12 Alex Spektor
In recent years, the titans of the handset industry have been surprised by the success of newcomers. First, Apple – a computer vendor – shook up the smartphone market by storm, taking Nokia’s profit crown in the process. Then, Google – an advertising/search firm – brought to market a new mobile operating system, quickly overshadowing historic leaders RIM and Microsoft. Now, Google’s Android has also become the fastest-growing major smartphone platform, having shipped more than twice as many handsets in the first eight quarters.

Cumulative Shipments, First 8 Quarters

clip_image002

Google’s successful growth has been enabled by strong support from its many partner vendors. As the first Android handset maker, HTC long enjoyed top market share, steadily broadening its portfolio across protocols (including hot “4G” technologies like HSPA+ and WiMAX), global carriers, and retail price points, staying ahead of Android competitors Motorola and Samsung. Historically, Samsung’s smartphone share had been disproportionate to its successful position in the overall market, and we had long commented on the matter. However, starting in Q3 2010, Samsung became the world’s largest Android vendor. Samsung accomplished this by launching an all-out assault across the globe with its Galaxy S family of handsets. For example, in the fickle US market, where each carrier has demanding compliance and customization requirements, Samsung launched a Galaxy S phone with each major carrier. Samsung’s share of the global handset market has tripled since 2001, when it was already a third-ranked player. Given that historic show of determination, the vendor’s leap to first place in Android smartphones should not at all be surprising. Expect Samsung to expand this leadership position in 2011 and beyond, riding Android’s coattails to huge smartphone volumes. -Alex Spektor Samsung Overtakes HTC to Become World's Largest Android Vendor in Q3 2010 Global Smartphone OS Market Share by Region: Q3 2010

October 12, 2010 04:10 David Kerr

sa photo dk

At CTIA in San Francisco last week, away from the fanfare around LTE rollouts and the next dozen tablet devices (ok, I exaggerate a little), Sprint had an announcement which will have significantly higher impact on mobile broadband adoption and revenues: Sprint ID. 

Sprint ID promises to up the ante on personalization and ease current feature phone users into the smart phone ranks.

Sprint ID offers instant personalization along key themes/packs where the operator has done the heavy lifting of identifying and group related applications of interest to different persona from wallpaper to ringtones to apps. While the one click marketing line is not quite matched by reality given pesky little things like accepting terms and conditions etc, Sprint ID is a significant breakthrough in my opinion as:

  • it broadens the market appeal of Smart phones to current feature phones users with a simple to understand offer in a range of device price points including the critical $49 and $99 levels.
  • it tackles one of the biggest weakness of all app stores: discoverability of content and simple personalization.

Three handsets were featured at launch of Sprint ID: Sanyo Zio™, Samsung Transform™, LG Optimus S™. These three devices cover key price points in the Sprint portfolio and provide customers with a range of form factors, industrial design and brand to meet their tastes. Interesting to note that both LG and Sanyo retain the right to put their own packs on their handsets as well. This is a big win for LG as its Optimus S™ will be available for under $50 with contract giving the vendor a much needed boost in the smartphone space. Samsung meanwhile continues to shine at Sprint occupying the lucrative $149 spot with its Transform™. All three devices of course require a Sprint Everything Data plan.

However, for me the more significant impact is that operators and oems are finally realizing that customers don’t buy phones or services or apps… what they really want are positive experiences

… be that socially connected, sports, education, health and fitness, fashion etc. This is something that our User Experience team has been evangelizing for the last 7+ years. Whether its 80k apps on Android or 250k on Apple store or 10K on RIM, one common experience has been exasperation at the huge waste of time, energy and emotions in finding ANYTHING!!! Which happens first, eyes glazing over or fingers cramping with so much scrolling? Either way the net result is often a disappointing experience which the early smart phone coolaid drinkers have learned to live with.

Newbies to the smart phone arena, will certainly have less tolerance and spend less time to personalize their device and enable applications. Sprint ID is well tailored to the next wave who are taking tentative steps into the smart phone space

 

David Kerr

dkerr@strategyanalytics.com


September 23, 2010 22:09 David Kerr

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 6th.  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


September 10, 2010 20:09 bjoy
Android sales have already surpassed the iPhone and with each passing day, its building further momentum with new announcements and launches. The launch of the Huawei Ideos, a mid-tier (<200 USD) device with Android 2.2 is yet another milestone in the Android evolution as the platform now extends its reach to new segments traditionally occupied by the feature phones. Most, if not all, major operators have at least one Android model in the portfolio. The platform also has broad support from the vendor community, with major names under its banner. One question at the top of OEM and Operators is how my Android is different from your Android. Look at the Android portfolio in the US market. Aside from the glossy hardware specs and discounting the differences between the base version releases - Android 1.X/2.X – it’s hard to spot any differences beneath the skin. OEMs ability to differentiate is largely limited to the user interface layers. The HTC Sense UI, Samsung TouchWiz and Sony Ericsson Timescape are some of the leading Android skins available in the market. Under the hood, they all share the common goal of servicing the Google’s apps and service portfolio – Search,GMail, Maps and  Gtalk to name a few.   “True” Internet? An opportunity for differentiation here is to bring the “true” internet experience to consumers by seamlessly integrating services and features beyond Google products. This is a tall task for most OEMs as it’s not always easy to develop exclusive partnerships in the content or service space – and some of the most popular non-Google services like Facebook are already integrated to the core Android base anyways. But for operators, the stage is slightly different. Check out some of the most recent announcements from Verizon Wireless: •    The Verizon Samsung Fascinate, part of Samsung’s premium Galaxy S portfolio, uses Microsoft  Bing as the standard option for Maps. •    Bing will also serve as the default search engine for the device. The Galaxy S series is available under all major US operators, but except for the Verizon version, all bear the same look and feel. I’m not going to the merits of which search or maps service yield the best results, but the fact that operators are looking beyond Google’s umbrella services will provide more choice for the consumers – however small that segment be. Skype integration is another differentiator for Verizon Android devices.  Although the Android core base doesn’t have a Google branded VoIP service yet, sooner or later the Google branded VoIP service will be part of the core Android base – especially given the recent launch of integrated VoIP service with Gmail. Replacing core Google services with alternative services will not prove to be a winning formula in all instances, but it could bring the mobile Internet experience beyond Google’s umbrella brands and provide enough service attributes to differentiate from the Google’s core base. The service element is a critical element in the product planning process and product planners should pay keen attention before deciding what should or shouldn’t be replaced from the core platform.  At Strategy Analytics, we’ve tools to support our clients in positioning products with the right combination of hardware/platform/service elements. Drop us a note if you would like to know more on how we can assist your planning teams. - Bonny Joy

August 11, 2010 14:08 Alex Spektor
It may be the exclusive iPhone carrier in the US, but AT&T is also becoming an attractive option for consumers looking to buy an Android handset. Though things weren’t always as they are today. If T-Mobile was the clear early leader in Android adoption among tier-one US carriers, then AT&T was the clear laggard. Let us quickly recap highlights from the US Android timeline:
  • 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.
Less than six months later, AT&T will have as many as five Android phones in its portfolio. This won’t be quite as many as Verizon Wireless and T-Mobile, but it will put AT&T roughly on par with Sprint. AT&T will also be a leader from a variety standpoint, offering smartphones from vendors Motorola, HTC, Samsung, Sony Ericsson, and Dell.

clip_image002

So, what are the key drivers for the ramp-up?
  • 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.
Regardless of AT&T’s underlying reasons, broadening the options available to consumers is a good thing for many of the involved parties. For example, shoppers get a wider selection of handsets and emerging vendors like Dell get exposure to a growing market. However, AT&T will need to be careful in managing the persistent issue of fragmentation. While developers and content providers will be happy to have a larger Android installed base for which to create applications and services, they will also be faced with the cost of addressing multiple models/processors/resolutions/etc. -Alex Spektor