Wireless Smartphone Strategies

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

October 30, 2014 10:49 nmawston

Lenovo and Motorola confirmed today, Thursday 30 October 2014, that the US$2.9 billion deal to merge their smartphone divisions has been approved and wrapped up. Two have become one.

According to analysis from our WSS (Smartphones) research service, the "big three" ADVANTAGES of the merger include:

1. Increased scale. Higher volumes can equal lower costs. Lenovo captured 5% marketshare of global smartphone shipments in Q3 2014, while Motorola captured 3% marketshare of global smartphone shipments in Q3 2014. Together, they now hold 8% share of the worldwide smartphone market;

2. Deeper distribution channels. Lenovo and Motorola together can now sell smartphones, tablets and wearables in more countries and in more retail stores, operator stores, online stores, or PC channels;

3. Bigger marketing / R&D budgets. Lenovo and Motorola together can potentially spend or borrow more to fund extra marketing and R&D activities.


The "big three" DISDVANTAGES of the merger include:

1. Lenovo is slowing down. Lenovo's rapid smartphone growth of recent years is now coming to an end, due to fierce competition from Xiaomi and others. Based on our data, Lenovo's global smartphone shpiments annual growth rate has more than halved from +74% YoY in Q3 2013 to +30% YoY in Q3 2014;

2. Motorola is losing money. Motorola continues to make hefty financial losses, due to a relatively large cost-base. Based on Strategy Analytics data, Motorola has NOT made a profit for 4 years;

3. Smartphone mergers usually take several years to integrate. For example, TCL-Alcatel, a Chinese and French merger, took around 5 years to stabilize and sustain growth.


Clearly, Lenovo and Motorola have strong tailwinds -- such as 8% global smartphone marketshare and two well-known brands. But Lenovo and Motorola also face major headwinds. Lenovo's golden era of easy smartphone growth is coming to an end, while Motorola continues to lose money. Merging these two firms next year will NOT be as easy as many expect.


October 20, 2014 15:20 nmawston

According to a new report from our Wireless Smartphone Strategies (WSS) service, Blackberry captured 1% smartphone share worldwide in Q3 2014. The company’s hardware division is finally on the cusp of returning to profits for the first time in three years. Cost cuts (e.g. outsourcing) and improved BB10 designs -- like the Z3 and Passport models -- are driving the vendor’s enhanced performance. Additional analysis can be viewed by clients here.


October 2, 2014 23:21 lsui

According to a new report from our Wireless Smartphone Strategies (WSS) service -- Global Smartphone Sales by 17 Technologies : 2007 -2017 -- HSUPA / HSPA+ will be replaced by LTE as the world's most widely used smartphone air-interface technology in 2015.

We forecast 4G technoligy to account for 38% of total global smartphone sales in 2014, rising to 45% in 2015. Moreover, LTE-Advanced will entend into more markets from 2014 onwards.

China will surpass USA to become the largest LTE smartphone market globally in 2014.

 


September 18, 2014 12:03 nmawston

According to new research from our Country Share Tracker (CST) service, the Xiaomi Redmi was the world's 4th best-selling smartphone by volume in Q2 2014. The impressive performance (re)confirms how big the China market has become, and how powerful the Chinese brands are becoming (e.g. Huawei, Lenovo, TCL-A, ZTE, etc.). More analysis and data, of global smartphone shipments by MODEL for Q2 2014, can be downloaded by clients here.


September 15, 2014 22:47 lsui

Google unveiled three new smartphones based on the previously announced Android One program at an event in New Delhi, India, on September 15th, 2014.

The 3 new models are the Spice One Dream UNO Mi-498, Micromax Canvas A1 and Karbonn Sparkle V. They are all based on the Android One platform (KitKat) and come with the Google Play Store preinstalled.

Our Wireless Smartphone Strategies (WSS) service forecasts Android One to account for 1% of global smartphone sales in 2014. It is a niche-but-growing program for superphone vendors to target the "next billion" users in emerging markets.


September 3, 2014 01:33 lsui

According to a new report from our Wireless Smartphone Strategies (WSS) service -- Value Share : Global Smartphone Revenue and ASP by Vendor by Price-Tier : Q2 2014 -- Lenovo became the world's largest smartphone vendor by volume in the entry-tier category in the second quarter of 2014. This is a first for the company.

However, we note the vast majority of Lenovo's smartphone shipments are generated in its home market of China. Outside China, Lenovo remains a tiny second-tier smartphone brand at the moment.

More analysis of Lenovo and smartphone shipments by price-tier can be viewed by clients here.


July 30, 2014 23:55 nmawston

According to the latest research from our WSS (Smarpthones) service, global smartphone shipments reached 295 million units in the second quarter of 2014. The Android operating system captured a new record of 85 percent global marketshare, mainly at the expense of BlackBerry, Apple iOS and Microsoft Windows Phone.

Global smartphone shipments grew 27 percent annually from 233.0 million units in Q2 2013 to 295.2 million in Q2 2014. We estimate worldwide smartphone growth has halved during the past year, from 49 percent a year ago to 27 percent today. Global smartphone growth in the current quarter is at its lowest level for five years, and there are wide variations by region. For example, Africa and Asia are booming, while North America and Europe are maturing.

Android’s domination of global smartphone shipments reached a new peak in Q2 2014, with an impressive 85 percent of all smartphones now running Google’s OS. Android’s gain came at the expense of every major rival platform. BlackBerry saw its global smartphone share tumble from 2 percent to 1 percent in the past year due to a weak line-up of BB10 devices. Apple iOS lost one point of share to Android because of its limited presence at the lower end of the smartphone market. Microsoft Windows Phone continued to struggle in the United States and China, and its global smartphone marketshare fell from 4 percent in Q2 2013 to just 3 percent during Q2 2014.

Like the PC market, Android is on the verge of turning smartphone platforms into a one-horse race. Its low-cost services and user-friendly software remain wildly attractive to hardware makers, operators and consumers worldwide. Rival OS vendors are going to have to do something revolutionary to overturn Android’s huge lead in smartphone shipments. Apple’s push into the big-screen phablet market and Firefox’s expansion into the ultra-low-cost smartphone market later this year are the only major threats to Android’s continued growth at this stage.

Exhibit 1: Global Smartphone OS Shipments and Market Share in Q2 2014 [1]

Global Smartphone OS Shipments (Millions of Units) Q2 '13 Q2 '14
Android 186.8 249.6
Apple iOS 31.2 35.2
Microsoft 8.9 8.0
Blackberry 5.7 1.9
Others 0.5 0.5
Total 233.0 295.2
     
Global Smartphone OS Marketshare  % Q2 '13 Q2 '14
Android 80.2% 84.6%
Apple iOS 13.4% 11.9%
Microsoft 3.8% 2.7%
Blackberry 2.4% 0.6%
Others 0.2% 0.2%
Total 100.0% 100.0%
     
Total Growth Year-over-Year % 48.9% 26.7%
     
Source: Strategy Analytics    


[1] Numbers are rounded.


July 17, 2014 18:25 nmawston

According to our WSS (Smartphones) research service, BlackBerry smartphone shipments fell sharply worldwide during Q2 2014. The Canadian vendor continued to struggle in all regions worldwide. However, cost-cutting and inventory destocking helped BlackBerry to trim its financial losses to the lowest level for over a year. A partnership with Amazon Appstore also improved its services portfolio and there are tentative signs that BlackBerry may finally stabilize in the second half of this year.


June 10, 2014 15:50 lsui

At the breakout session today -- in ZTE's annual analyst event in China -- the keywords are online channel and voice interaction.

Like many other Chinese vendors, ZTE has emphasized the critical role that online distribution channels play in branding equity enhancement. For instance, all of its three 4G models recently launched focus on online channels by working with big Chinese e-tailers, such as JD and T-Mall. ZTE targets that 20% of total smartphone sales this year will go via the online channel. Interestingly, offline and online is not completely exclusive. In contrast, as we have seen from Xiaomi, ZTE also tries to leverage online resources to do branding, and blur the boundary between the two to bring more online models to offline channels to generate volumes. For example, it plans to open up over hundreds of Nubia physical stores this year to enhance the penetration into offline channels.

ZTE showcased more voice-recognition usages today, such as voice-print unlocking, voice navigation, etc. ZTE claims the voice-recognition rate has improved to over 90% with its own technology by working with Nuance and other technical partners. Moreover, it will adopt more voice-interaction functions by integrating it with ZTE's own UI-MiFavor 3.0 later this year.  We like the idea very much, but it remains to be seen how users / consumers will embrace it or not -- the industry might need a more influential American player, such as Apple, to make voice-recognition adoption more widely available.

Something missing today from the session was the topic of LTE-Advanced -- it was not really covered. It is also surprising that ZTE confirmed they will adopt their own chipset mainly in modem products -- rather than their own smartphones -- in the short term, making us suspect it might still need time to improve and optimize the chipset products for cellphones.


April 29, 2014 02:50 woh

According to the latest research from our Wireless Smartphone Strategies (WSS) research service, global smartphone shipments grew +33% annually to reach 285 million units in the first quarter of 2014. Leaders Samsung and Apple lost slight traction in the quarter, while Huawei and Lenovo each held five percent marketshare worldwide.

Global smartphone shipments grew 33 percent annually from 213.9 million units in Q1 2013 to 285.0 million in Q1 2014.Smartphone growth was mixed on a regional basis during the quarter, with healthy demand in Asia counterbalanced by sluggish volumes across North America due to changes in the operator subsidy mix.

SAMSUNG shipped 89.0 million smartphones worldwide and captured 31 percent marketshare in Q1 2014, dipping slightly from 32 percent a year earlier. This was Samsung’s first annual marketshare loss in the smartphone category since Q4 2009. Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands like Huawei at the lower-end.

APPLE grew a below-average 17 percent annually and shipped 43.7 million iPhones worldwide for 15 percent marketshare in Q1 2014, falling from the 17 percent level recorded during Q1 2013. Apple remains strong in the premium smartphone segment, but a lack of presence in the entry-level category continues to cost it lost volumes in fast-growing emerging markets such as Latin America.

The combined global smartphone marketshare of SAMSUNG and APPLE has slipped from 50 percent in Q1 2013 to 47 percent in Q1 2014. There is more competition than ever coming from the second-tier smartphone brands. HUAWEI remained steady with 5 percent global smartphone marketshare in Q1 2014, while LENOVO has increased its global presence from 4 percent to 5 percent share during the past year. Huawei is expanding swiftly in Europe, while Lenovo continues to grow aggressively outside China into new regions such as Russia. If the recent Lenovo takeover of MOTOROLA gets approved by various governments in the coming months, this will eventually create an even larger competitive force that Samsung and Apple must contend with in the second half of this year.

 

Exhibit 1: Global Smartphone Vendor Shipments and Market Share in Q1 2014  [1]

Global Smartphone Vendor Shipments (Millions of Units)

Q1 '13

Q1 '14

Samsung

69.4

89.0

Apple

37.4

43.7

Huawei

10.0

13.4

Lenovo

8.4

13.3

Others

88.7

125.6

Total

213.9

285.0

 

 

 

Global Smartphone Vendor Marketshare  %

Q1 '13

Q1 '14

Samsung

32.4%

31.2%

Apple

17.5%

15.3%

Huawei

4.7%

4.7%

Lenovo

3.9%

4.7%

Others

41.5%

44.1%

Total

100.0%

100.0%

 

 

 

Total Growth Year-over-Year %

39.1%

33.2%

 

 

 

Source: Strategy Analytics

 

 

 

[1] Numbers are rounded.