Wireless Smartphone Strategies

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

June 11, 2013 01:34 Neil Shah

The Apple WWDC kicked off today and the opening keynote was as expected slightly underwhelming but still depicted Apple’s broader and deeper ecosystem.

 

With respect to the announcements, following are some of our thoughts:

·    Typography, translucencies & lots of colors adds a fresher look and feel to the aging iOS6 UI but I believe it’s not enough to hold the iPhone users from switching to competing platforms as overall interaction, features remains weak.

·    iTunes Radio, multitasking, browser animations, Airplay and Airdrop are good and required catch-up additions but I believe many users are in many ways increasingly committed to cross-platform apps such as Pandora, Spotify, Dropbox, Gmail, Chrome which gives them a foot outside the door of iOS Ecosystem. While the current iOS users will welcome these additions, these features are not enough for competing platform users to switch to iOS.

·    In terms of maps, Apple is starting to get deeper location/mapping integration across devices and native iOS apps such as calendar, browser, enabling a tighter coupling and syncing across devices leveraging iCloud.

·    Apart from Airdrop, per app VPN, iCloud Keychain in OSX, we didn't seen many features or services announced which would boost the iCloud in enterprise.

·    Updates to OSX and notebooks were good in addition to the sneak peak of Mac Pro was truly impressive and depicts Apple still has enough design arsenal up their sleeves which they are not using it at this moment. Apple continues to bank on its strategy to leverage its strong brand equity, ecosystem advantage to think that these incremental updates will satisfy the current and prospective iOS users without giving away the farm and still will be able to maintain healthy bottom line.

Overall, Apple iOS7 has nothing revolutionary to help it beat Android or regain the "cool quotient".  However, the iOS ecosystem is still very strong and tightly controlled as it now boasts 575 million registered iTunes accounts, 300 million iCloud accounts, 240 million Game Center users, more than 90% of devices on iOS 6 (no fragmentation like Android) and 407 retail stores across 14 countries with approximately 350 million in annual footfall. Huge but still not an Android killer in long term!


June 6, 2013 18:48 Neil Shah

It could sound surprising but the new BlackBerry Q10 is my first physical QWERTY smartphone, coming from four years of full-touch smartphone usage, to type using those soft physical keys on Q10 has been a unique experience. I have been using both the BlackBerry Z10 (last 4 months) and Q10 (last 6 weeks), both almost contrasting in formfactors as well as interaction experience.

 

Software: 

The touch-friendly BB10 User Interface and Interaction is simply fresh and extraordinary but some feature phone upgraders and even traditional BlackBerry users might find it a bit overwhelming at start. The smartphone comes loaded with host of useful and differentiated applications and services such as BlackBerry Hub (Very Useful Notification center), BlackBerry Remember (All Note Taking in one place), BlackBerry Messenger (BBM) Video with Screen Sharing and BlackBerry Balance (Two profiles: work and personal a key solution to attract enterprise users and attack BYOD trend). However, the BlackBerry Balance still requires the user to have BlackBerry Enterprise Server (BES) support to enable “work” profile and won’t work for users with enterprises which have not deployed BES. This is something BlackBerry needs to work on to attract more BYOD users.

Keyboard: 

While the new BlackBerry 10 physical QWERTY keyboard has left out the famous BlackBerry navigation "trackpad" but it is nicely replaced by the number of touchscreen gestures and smart typing features on the device. The universal type-to-search or action (e.g. open app, contact, etc.) using physical keyboard is a unique differentiator for BlackBerry Q10. However, I did miss the intuitive "word prediction & flick typing" feature implemented in Z10 virtual keyboard. Nevertheless, Z10's word prediction engine is still integrated in Q10 as well, very useful and saves tons of keystrokes which makes typing a breeze and simply outstanding.

Hardware: 

Q10 definitely comes in a "cute" form-factor with a high pixel density (330 ppi) but a tiny 3.1 inch 720p touch screen Super AMOLED display coupled with the world's best smartphone physical QWERTY keyboard. From our analysis, QWERTY SKUs have been dropping left and right in BlackBerry competitors’ smartphone portfolio and Q10 should help BlackBerry differentiate with the “best QWERTY smartphone experience” in smartphone space and in a form-factor which is super light, thin and also with a full-snappy touchscreen BB10 experience integrated. The BlackBerry loyalists and keyboard lovers will look forward to this device to provide an unparalleled "touch & type" experience. The device is powered by Qualcomm’s 1.5GHz dual-core Snapdragon S4 Plus processor with 2GB of RAM and Adreno 225 GPU, NFC, 8MP rear and 2MP front cameras, Bluetooth v 4.0, microSD and is 4G LTE ready like Z10.

Multiple Form-factors introduces App Store Fragmentation in BB10 Platform:

The Q10 QWERTY form-factor helps Blackberry differentiate and maintain the QWERTY keyboard leadership but at the same time introduces fragmentation in BlackBerry 10 platform in terms of applications development and availability of apps across different form-factors. For example, developers have to specially tweak the BB10 apps designed for Z10 to fit the 720x720 3.1 inch formfactor of Q10. A simple app store search revealed the gap in terms of apps which are available for Z10 but not yet for Q10. Also, Skype app was first announced for Q10 and then for Z10 separately which is not encouraging signs for the BlackBerry developers. BlackBerry will have to find ways to resolve this issue and make sure that the development process is painless, uniform and QWERTY BB10 devices are not deprived of apps which are available on full-touchscreen BB10 devices or vice-versa.

 

App Fragmentation Example: Q10 vs. Z10

Pricing: Very Expensive

 Secondly, on the pricing side the unlocked retail price (~US$600+) is on the higher side than expected and BlackBerry needs to launch multiple sub US$300 retail price-point models to target the emerging markets and younger segments and lock them in BB10 experience in coming quarters. This will drive broader adoption of BB10 this year as developed market consumers are still higher on the scale to choose iOS and Android platforms ahead of other platforms in near- to mid-term.

Conclusion

To summarize, Q10 is a solid differentiated “touch & type” offering by BlackBerry which will help BlackBerry maintain it legacy, style and attract millions of BlackBerry purists and loyalists as well as consumers with iOS or Android fatigue which in past have been BlackBerry users. However, the different form-factor also brings in an unwarranted app store fragmentation and the very higher retail pricing (unsubsidized and subsidized) will certainly raise some eyebrows and barriers to achieve tens of millions in volumes per quarter run-rate as Q10 is essentially competing in a very premium-tier against the behemoths such as Samsung Galaxy S4 or Apple iPhone 5 the world’s best-selling smartphone models.

 


May 3, 2013 18:56 Neil Shah

Our Wireless Smartphone Strategies (WSS) service today published our latest report: North America Smartphone Vendor & OS Market Share by Country: Q1 2013. There has been shakeup in the US markets as it is slowly being dominated by Korean and Chinese vendors growing faster than market and earlier strong players such as BlackBerry, Motorola and HTC. Following is the summary of top five US smartphone vendors and their annual growth performance in terms of smartphone shipments. ZTE for the first time has surpassed Motorola to become the number 4 smartphone OEM in USA while Apple's growth has slowed significantly coming from a holiday season quarter.

USA Smartphone Vendor Shipments (Annual Growth %)

2013Q1

Apple

26.2%

Samsung

34.1%

LG

61.1%

ZTE

85.7%

Motorola

-40.6%

Others

-0.6%

Total

21.5%

The heat is on as the US mobile industry enters a very important quarter. Important product launches in Q2 2013 from Samsung Galaxy S4, HTC One, BlackBerry Q10 and Z10, LG Optimus G Pro to low-cost Nokia Lumia 521. On carriers' front, T-Mobile merging with MetroPCS plus giving up subsidies looking to shake up the industry in addition to Sprint contemplating over Softbank vs.Dish deals, intersting quarter indeed.

 

- Neil Shah

 


April 26, 2013 02:38 Neil Shah

According to the latest research from our Wireless Smartphone Strategies, global smartphone shipments grew 36 percent annually to reach 210 million units in the first quarter of 2013. Samsung captured one-third of all smartphone volumes worldwide, while LG became the world’s third largest smartphone vendor for the first time ever.

Global smartphone shipments grew 36 percent annually from 153.8 million units in Q1 2012 to 209.5 million in Q1 2013. Growth was driven by surging demand for 4G LTE models in developed regions like North America and 3G models in emerging markets such as China

Samsung grew 56 percent annually and shipped a record 69.4 million smartphones worldwide, capturing an all-time-high 33 percent marketshare in Q1 2013. Samsung shipped almost two times more smartphones and grew nine times faster than Apple during the quarter. With the flagship Galaxy S4 model likely to be in high demand, provided there are no major component shortages, Samsung should continue to deliver strong smartphone volumes worldwide in the second quarter of the year. Apple shipped a lackluster 37.4 million iPhones worldwide in Q1 2013, up from 35.1 million a year earlier. Apple grew just 7 percent annually during Q1 2013, which was the iPhone’s lowest growth rate ever in its history. Apple’s premium-only strategy for the iPhone is approaching a natural ceiling and it will need to expand deeper into large markets like China or launch a lower-priced iPhone model for mass-market users.

LG was a star performer as its global shipments doubled year-over-year to 10.3 million units and it became the world’s third largest smartphone vendor for the first time ever in Q1 2013. An improved Optimus portfolio and expanded distribution have been the main causes of LG’s success. However, LG is still facing strong headwinds in the huge US and China markets and these remain key challenges for the Korean vendor this year.

Other findings from the research include:

Huawei delivered 5 percent share of the global smartphone market in Q1 2013, up from 3 percent a year earlier. Most of Huawei’s smartphone volumes are currently centered around China and Huawei will need to expand internationally if it wants to become an established global player in the future;
 

ZTE captured a record 4 percent share of the global smartphone market in Q1 2013. Like Huawei, ZTE’s growth has been coming largely from the China market and ZTE has a relatively modest presence abroad.

 

 

Exhibit 1: Global Smartphone Vendor Shipments and Market Share in Q1 2013  [1]



 

Global Smartphone Vendor Shipments (Millions of Units)

Q1 '12

Q1 '13

Samsung

44.4

69.4

Apple

35.1

37.4

LG

4.9

10.3

Huawei

5.1

10.0

ZTE

4.6

9.1

Others

59.7

73.3

Total

153.8

209.5

 

 

 

Global Smartphone Vendor Marketshare  %

Q1 '12

Q1 '13

Samsung

28.9%

33.1%

Apple

22.8%

17.9%

LG

3.2%

4.9%

Huawei

3.3%

4.8%

ZTE

3.0%

4.3%

Others

38.8%

35.0%

Total

100.0%

100.0%

 

 

 

Total Growth Year-over-Year %

49.3%

36.2%

 

 

 


[1]  Numbers are rounded.

 

The full report, Global Smartphone Shipments Reach 210 Million Units in Q1 2013, is published by the Strategy Analytics Wireless Smartphone Strategies (WSS) service, details of which can be found here: http://tinyurl.com/bps9qhr.

 

 

 


February 24, 2013 17:43 Neil Shah

 

It’s unofficially the first day on Mobile World Congress 2013 and already mobile ecosystem players such as Mozilla have jumped in to announce their offerings. My colleagues are on the ground covering the event and we are proud to be the official GSMA research partner for MWC 2013.

Mozilla and its partners debuted their first commercial build of eagerly awaited initiative of Open Web Devices based on HTML5 based Firefox OS. The first wave of commercial Firefox OS devices will be launched in Brazil, Colombia, Hungary, Mexico, Montenegro, Poland, Serbia, Spain and Venezuela starting summer of 2013 targeting sub-US$150 retail price points leveraging HTML5 capabilities on a low cost hardware. In contrast, developed markets such as USA, UK will be getting Firefox OS phones next year in 2014. Mozilla has roped in more than 17 operators (e.g. Telefonica, Deutsche Telekom), four device OEMs (e.g. LG, Alcatel One Touch, ZTE and Huawei) and one chipset supplier (e.g.Qualcomm) as partners to build and launch Firefox OS phones on almost every continent on the planet.

Our Wireless Smartphone Strategies (WSS) service forecasts Firefox OS will capture 1 percent (1%) share of global smartphone shipments in 2013. To expand beyond this niche status, Firefox OS will need to address at least three main challenges; they are modest brand awareness as an independent platform among smartphone consumers worldwide compared to likes of Google and Nokia, a limited initial retail presence in the influential developed markets such as United States market, and a relatively unproven ecosystem experience of supporting apps and services. However, Mozilla will still look to leverage to cross-promote these devices to its almost half a billion Firefox user base and popularity in key countries such as Poland, Brazil, Colombia and Serbia which will see initial wave of Firefox OS phones.

It's going to be an interesting 2013 with long tail of mobile OS platforms such as Firefox, Tizen, Sailfish, Ubuntu will challenge the strong walled garden platforms chipping away share leveraging key operator and device OEM partnerships.


February 7, 2013 14:31 Neil Shah

According to our Wireless Smartphone Strategies (WSS) service, smartphone shipments grew +25% annually in North America during the fourth quarter of 2012, the region's strongest growth rate for a year with both USA and Canada registering record high smartphone demand. Three out of Four mobile phones sold in North America now are smartphones.

However, Android lost eleven points of sequential share to Apple as it is approached a peak in the US market. Meanwhile, Microsoft overtook BlackBerry OS to become America's third largest platform for the first time since 2006. This report contains quarterly smartphone vendor and OS shipments and marketshare for the top 9 vendors and top 5 platforms in the United States and Canada for Q4 2012. The report also contains historical data for North America from 2007 to 2012, as well as a pivot table for data control and a deeper dive for an OEM-by-platform view in these countries

 

North America Smartphone Vendor & OS Market Share by Country: Q4 2012

 


November 6, 2012 17:45 Neil Shah

AT&T announced launch availability and pricing of their latest offering Lumia 920 & Lumia 820 with revamped Windows Phone 8 platform enabling cutting edge specs. The smartphone market in the important North America market has so far been a two-horse race and things might change moving forward.

Our Wireless Smartphone strategies (WSS) service believes at $99 price point, Lumia 920 which with its cutting-edge hardware and software capabilities could be easily priced at $200+ subsidized retail. However, now it will hit a very sweet spot in terms of price for the consumers, a superb “value for money” any smartphone can offer this holiday season. Similarly, Lumia 820 is also a solid mid—range offering at $49 price-point.  To put into context, AT&T still has more than 35% of subscribers on feature phones as well as millions of existing potential smartphone owners which may be intending to switch or upgrade to fresher advanced smartphones such as Lumia 920 and $99 & $49 are great first time deals to target those subscribers over next 3-4 months. But this also means that with this pricing Nokia has lowered their pricing barrier for flagship devices, so next iteration should have something more cutting edge so Nokia can price it at levels where Nokia can make more profits and also roll-out a multi-carrier launch such as Galaxy SIII.

Additionally, with aggressive collaborative marketing and promotion from Nokia, AT&T as well as from Microsoft on Windows Phone 8 should help cement Nokia’s position in US and get Nokia phones in as many hands as possible. Furthermore, we believe the flagship exclusive is a brilliant move from Nokia in terms of long-term benefits with focused marketing, aggressive pricing and Lumia brand creation in USA. It might though hurt Nokia’s TAM in important US market for short term but gaining presence at three out of top four tier-1 carriers with Lumia devices is commendable and should pacify investors.

Though on a related note, AT&T also announced HTC 8X Windows Phone 8 pricing which is not as aggressively priced as Lumia 920, as HTC lost the AT&T exclusivity spot to Nokia's flagship and instead went for a multi-carrier launch and might hirt vendor's mindshare.


July 27, 2012 03:30 Neil Shah

 

According to a new, published report from our Wireless Smartphone Strategies (WSS) service, global smartphone shipments grew 32 percent annually to reach 146 million units in the second quarter of 2012. This was the smartphone industry’s slowest growth rate for almost three years. Samsung and Apple together captured over half the global market.


Global smartphone shipments grew 32 percent annually to reach 146.1 million units in Q2 2012. This was the smartphone industry’s slowest growth rate since the third quarter of 2009. A volatile global economy, maturing penetration of smartphones among contract mobile subscribers, and some Apple fans holding off purchases in anticipation of a new iPhone 5 model later this year were among the main causes of the slowdown.

Samsung shipped 50.5 million smartphones worldwide and captured a record 35 percent marketshare in the second quarter of 2012. This was the largest number of units ever shipped by a smartphone vendor in a single quarter. Samsung has been able to deliver hit models in most major price segments, from the high-end Galaxy Note phablet to the mass-market Galaxy Y. Apple grew a modest 28 percent annually and shipped 26.0 million smartphones worldwide for 18 percent marketshare, broadly flat compared with 18 percent recorded a year earlier. We believe Apple’s lackluster performance was driven by some Apple fans and operators holding off iPhone purchases in anticipation of a rumored new iPhone 5 model around September or October this year.

Samsung and Apple combined now account for over half of all smartphones shipped worldwide, up from around one-third a year ago. Volumes have polarized around those two brands. The growth of Samsung and Apple has come partly at the expense of Nokia, whose global smartphone marketshare has halved from 15 percent to 7 percent over the past year. This is Nokia’s lowest marketshare level in the smartphone category for a decade. Nokia is seeing reasonable growth in its new Microsoft Lumia portfolio, but it is not yet offsetting the sharp decline in its aging Symbian platform.

 

Exhibit 1: Global Smartphone Vendor Shipments and Market Share in Q2 2012  [1]

 

Global Smartphone Vendor Shipments (Millions of Units) 

Q2 '11 

Q2 '12 

Samsung 

20.2

50.5

Apple

20.3

26.0

Nokia

16.7

10.2

Others

53.3

59.4

Total

110.5

146.1

 

 

 

Global Smartphone Vendor Marketshare  %

Q2 '11

Q2 '12

Samsung

18.3%

34.6%

Apple

18.4%

17.8%

Nokia

15.1%

7.0%

Others

48.2%

40.7%

Total

100.0%

100.0%

 

 

 

Total Growth Year-over-Year %

77.1%

32.2%

 

1 Numbers are rounded.


Contact Information:

The author of this report and analysis, Neil Mawston, can be reached at NMawston@strategyanalytics.com / +44 1908 423 628.



[1]  Numbers are rounded.


June 4, 2010 19:06 Neil Shah
The global handset industry continues to grow and fragment. Due to platform facilitators like MediaTek, manufacturing a 2G cellphone is easier than ever. These trends have led to the emergence of a long tail of dozens of microvendors, mostly from China and India. Numerous microvendors have benefitted from the surging demand for low-cost 2G phones in rural and suburban markets. According to our Handset Country Share Tracker (HCST) report for Asia, leading microvendors Micromax and Tianyu are ranked among the top 6 brands in their domestic markets of India and China. What have been the main reasons for the microvendors' growth? • OEM-partnered low-cost handset solutions; • Strong ultra-low- and entry-level portfolios at very competitive price-points; • Innovative features for local needs and tastes, such as 30-day standby battery (important feature for regular electricity deprived rural markets), torch-light, theft tracker, multimedia player, video call, AM/FM Radio and dual-SIM; • Extensive retail distribution footprints; • Aggressive advertising and brand promotions; The microvendors have gone after first-time and second-time buyers and emerged with some success. However, key questions that arise are -- how many microvendors are successfully selling and how have they originated? Is there any major differentiation between their offerings? How are the microvendors positioning their brands? What are the microvendors doing in order to compete at the next level, such as 3G smartphones? Thus, starting in Q1 2010, we are now actively tracking an additional 25 emerging microvendors every quarter. These top 25 microvendors have captured a combined 4% global marketshare. Micromax and Spice top our rankings, which include other vendors from diverse industries such as consumer electronics and personal computing. We expect the long tail of Asian vendors will remain active for the foreseeable future, as they focus their efforts on a next wave of emerging 3G handset growth in 2011. Our published Microvendors report for Q1 2010 is available to download for clients here.

April 12, 2010 15:04 Neil Shah
Verizon Wireless in the US is pressing hard to get its hands on the Apple iPhone. Its CEO, Ivan Seidenberg, has reportedly told Apple that it wants to stock the iPhone sooner rather than later. Why would Verizon Wireless want the iPhone? Well, it would surely love to break AT&T’s exclusive for the iconic device. Verizon would be keen to solidify its data ARPU and improve the company’s churn outlook by stocking the popular iPhone. And with next-gen models like the HTC EVO 4G WiMAX starting to appear at Sprint, Verizon needs to remain at the cutting-edge of data-centric handsets and services. If (if) Verizon Wireless were to stock the iPhone in 2010 to 2012, should it be optimized for CDMA or LTE connectivity? Of course, timing is king. Should a Verizon iPhone be launched in the second half of 2010, then it would definitely be a CDMA-only version, because Verizon’s LTE network will not be fully commercialized. How about an LTE version in mid-2011? Well, our Wireless Device Strategies (WDS) service forecasts LTE handsets will make up just 1% of total shipments in the United States next year. Launching an LTE iPhone in 2011 would be a huge marketing coup for Verizon, but it would be entering a niche immature market, so we think this approach is too high a risk for Apple -- as a historical benchmark, Apple’s first WCDMA iPhone in 2008 did not launch until WCDMA volumes were approaching some 10% of the nationwide total. Therefore, we believe a launch-date of 2012 or even 2013, when LTE will be more established, is a more realistic option for a Verizon Apple LTE iPhone. If an iPhone arrives at Verizon before those dates, then it will almost certainly be a CDMA-only version. - Neil Shah