Wireless Smartphone Strategies

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

April 2, 2014 10:25 sbicheno

Canadian smartphone specialist BlackBerry announced another major year-on-year fall in global units shipments recently, which marks the 11th quarter in a row it has seen an annual decline.

Our Wireless Smartphone Strategies (WSS) service notes that it also reported a significantly larger figure for sales through to the end-user, with the difference accounted for by inventory recognized in previous quarters, and the majority of which were running the older BlackBerry 7 OS, which was replaced as the main BlackBerry platform by BB10 a year ago.

While BlackBerry’s shipment decline began in 2011, it seemed to have stabilised in the latter half of 2012. In the light of the continued clearing of BB7 inventory it now appears that the Q3 and Q4 2012 BlackBerry shipments numbers were inflated by a rush to pump BB7 units into the channel - presumably at a discount - in order to clear the decks for the big BB10 launch. One possible negative side-effect of this may have been to offer a cheap, familiar alternative to consumers who might otherwise have given the new BB10 smartphones a try.

On that note, BlackBerry seems to also be streamlining the channel itself, with the recent announcement that it will not renew the licence for T-Mobile US to sell BlackBerry devices after it expires towards the end of April. This decision seems to have been influenced by a February T-Mobile email marketing campaign, encouraging its customers to switch from BlackBerry smartphones to iPhones. BlackBerry CEO John Chen made his displeasure known at the time through a blog, and the damage done appears to have been permanent.


March 26, 2014 18:36 sbicheno

There are currently unconfirmed reports online that pre-orders of the Android-based Nokia X smartphone are selling-out rapidly and speculation that this may amount to many millions of units. While Strategy Analytics WSS service cannot either confirm or refute these rumours, they do raise an interesting question: will Microsoft continue to support the Nokia X family once the acquisition is complete?

The easiest assumption to make is that Microsoft, which let’s not forget competes directly with Android via Windows Phone, will pull the plug on the Nokia X range as soon as it can. But with a new CEO Microsoft is currently undergoing a major strategic re-think, and may come to the conclusion that it is unlikely to ever replicate its PC software licensing business in mobile.

If that’s the case, and the Nokia X phones perform well in the market, Microsoft may conclude that they’re worth sticking with, if only in the name of increasing its market share as a vertical mobile phone player. Microsoft may conclude that its biggest need is a commercial relationship with as large a mobile installed base as possible, and how it acquires that is of secondary importance.

We shouldn’t have to wait too long to find out either way. 


March 26, 2014 16:43 sbicheno

Taiwanese smartphone specialist HTC has recently updated its flagship handset: the HTC One (M8). According to WSS service it appears to have once more produced one of the more attractive, well-engineered and feature-rich smartphones available but, as HTC’s performance over the last few years indicates, that alone doesn’t necessarily ensure strong sales.

The current clear leaders among smartphone vendors are also the two companies that spend the most, not just on R&D, but marketing and channel development. HTC has a good brand, but making that brand stand out from the crown requires extensive and clever marketing. Furthermore, global volume requires extensive global distribution, and HTC needs increase its coverage in as many markets as possible if it wants to reclaim some of its lost market share.


March 19, 2014 17:26 sbicheno

According to our Wireless Smartphone Strategies (WSS) service, Chinese vendor Oppo is choosing to address the Android smartphone differentiation challenge by attempting to beat its competitors to the most cutting-edge specs. The Find 7, launched today, claims the ability to take 50MP images as its signature USP. The device itself has a 13MP sensor for its main camera, but takes a burst of images and uses software to combine them into a 50MP shot. The ultimate function of such a feature is similar to the post-processing capability enabled by the 41MP sensor in the Nokia Lumia 1020.

Other notable high-end specs in the Find 7 include one of the first QHD (2560 x 1440 pixels) screens in this 5.5-inch phablet and 4K video recording at 30fps. All this is supported by a Qualcomm Snapdragon 801 SoC and quick-charging technology. Oppo has so far offered little further information bar the marketing video below, but our WSS service thinks it’s significant that the latest company to attempt to raise the smartphone spec bar services primarily the Chinese market.


<iframe width="640" height="360" src="//www.youtube.com/embed/iZIJlWGHU40?feature=player_embedded" frameborder="0" allowfullscreen></iframe>

 

 


March 19, 2014 16:59 sbicheno

As covered on our Wearable Device Ecosystems blog, Google formally unveiled Android Wear, which extends Android to wearable devices such as smartwatches. While proprietary platforms already exists that boast a degree of Android compatibility - such as those for the Sony Smartwatch and the Samsung Galaxy Gear - the arrival of full android for wearables should open up the market dramatically.

This is potentially good news for Android vendors, who have been struggling to differentiate their similar-looking rectangular touchscreen devices for some time. For the mid-term wearables look set to mainly by dumb accessories, rather than independently smart devices, and as such are likely to be sold bundled with smartphones. This means they are essentially a new feature of the smartphone and thus a new point of differentiation.


March 18, 2014 17:11 sbicheno

Our WDS (Devices) research service noticed recently that, on its UK web-store, Apple has introduced an 8GB version of its iPhone 5c, which is selling for £40 less than the 16GB version - a discount of 8.5%.

This move may indicate that Apple is dissatisfied with sales of the 5c and is looking to stimulate the market with a further price reduction. However, since the 16GB 5c is currently 14.5% cheaper than the 16GB 5s in the UK (£469 and £549, respectively) it’s possible that this further reduction will provide insufficient extra incentive to buy.

When Apple launched the iPhone 5c we observed that it had opted to preserve margin rather than chase volume. That remains a valid strategy, but it does make it more difficult to subsequently chase volume without the move being interpreted as a strategic rethink.

 


November 12, 2013 17:50 sbicheno

Global smartphone shipments grew by almost 50% annually in Q3 2013, with continued strong demand in many developing markets such as India. TCL-Alcatel, Xiaomi, Lenovo and Huawei of China were the global star performers in the quarter, outstripping many rivals like HTC and Fujitsu as the smartphone balance of power, outside of the big 2, continues to shift in favour of Chinese vendors. Subscribers to Strategy Analytics’ Wireless Smartphone Strategies service can access the full breakdown of global smartphone shipments , split by vendor, region and OS, here.


November 1, 2013 14:00 sbicheno

With an 81% Android global market share of smartphone shipments in Q3 2013, it could easily be argued that any change in Android development strategy must be defensive as there’s so much to defend. So the question is: what threats might Google have identified that compelled it to focus on “the next billion users”?

Strategy Analytics’ data shows the Asia Pacific region now consistently accounts for the majority of global smartphone unit shipments. Furthermore, year-on-year smartphone shipment growth in Asia Pacific has consistently been ahead of the global average and Android’s share of Asia Pacific smartphone shipments has steadily grown, so it’s fair to say that Asia Pacific Android shipments are currently the major global smartphone growth driver. In fact, the proportion of global smartphone shipments that are accounted for by Android in the Asia Pacific region (and at a relatively low average selling price) has doubled in the past two years.

For these reasons alone it is entirely reasonable for Google to focus on this key segment, where the immediate threat may well be fragmentation of Android itself at the lower-end, with older versions and piecemeal UI tweaks leading to a compromised user experience. By making it easier for lower-price-tier smartphones to be launched with the latest version of Android, Google will be hoping to reduce this fragmentation, which in turn will strengthen its position versus Windows Phone in the mid-tier (which topped 10 million global shipments for the first time in Q3 2013) and smart feature phones running proprietary platforms (such as Nokia’s Asha family) in the lower-price tiers. Another potential threat is local players such as Xiaomi in China, who are looking to aggressively differentiate their Android smartphone offerings.

The other smartphone region that has consistently out-grown the global average is Central & Latin America, where Android’s share of total smartphone shipments has also increased dramatically in the past two years. This region is the focus for the first new smartphone OS launch for some time - Firefox OS - which is aimed specifically at the lower smartphone price-tiers. While we don’t forecast Firefox OS to steal significant market share in the mid-term, it is entirely sensible for Google to address this competitive threat immediately.

So, in summary, a significant and growing proportion of global smartphone unit shipment growth is accounted for by mid- and lower-price-tier Android devices in the Asia Pacific and Central & Latin America regions. In these segments Android faces a number of competitive threats, including the steady growth of Windows Phone, the launch of Firefox OS, smart feature phones and, perhaps most significantly, the fragmentation of its own platform. By making Android 4.4 (KitKat) more compatible with lower-end devices, Google is acting to defend Android from these threats.


October 31, 2013 15:30 sbicheno

According to the latest research from our Wireless Smartphone Strategies (WSS) service, global smartphone shipments reached 251 million units in the third quarter of 2013. The Android operating system reached a new record of 81 percent global share, mainly at the expense of BlackBerry and Apple. Microsoft Windows Phone doubled its marketshare and it is currently the world’s fastest growing major smartphone platform.

Global smartphone shipments grew 45 percent annually from 172.8 million units in Q3 2012 to 251.4 million in Q3 2013. Growth was driven by robust demand for Android and Microsoft models in developed and developing markets, notably Europe and Asia.

Android’s domination of global smartphone shipments reached a new peak in Q3 2013, with four out of every five smartphones now running Google’s OS. Android’s gain came mainly at the expense of BlackBerry, which saw its global smartphone share dip from 4 percent to 1 percent in the past year due to a weak line-up of BB10 devices. Apple also lost some ground to Android because of its limited presence at the lower end of the smartphone market. Android will need to take further shipments from Apple if it wants to keep growing in the future, but this is unlikely in the near-term as the new iPhone 5s model is proving popular and it will help Apple to regain volumes worldwide in the fourth quarter of 2013.

Microsoft shipped more than 10 million smartphones worldwide in a single quarter for the first time ever in its history during Q3 2013. Microsoft has doubled its global smartphone marketshare from 2 percent to 4 percent in the past year. Microsoft grew its smartphone shipments by 178 percent annually in Q3 2013 and it is currently the world’s fastest growing major smartphone platform. Microsoft’s growth is almost entirely due to Nokia and its steadily improving Lumia portfolio across Europe, Asia and the United States. However, Microsoft is clearly still at a low level of share worldwide and it is struggling to gain serious traction in several major markets like Japan, South Korea and Africa.

Exhibit 1: Global Smartphone OS Shipments and Market Share in Q3 2013

Global Smartphone Operating System Shipments (Millions of Units)

Q3 '12

Q3 '13

Android

129.6

204.4

Apple

26.9

33.8

Microsoft

3.7

10.2

BlackBerry

7.4

2.5

Others

5.2

0.5

Total

172.8

251.4

 

 

 

Global Smartphone Operating System Marketshare  %

Q3 '12

Q3 '13

Android

75.0%

81.3%

Apple

15.6%

13.4%

Microsoft

2.1%

4.1%

BlackBerry

4.3%

1.0%

Others

3.0%

0.2%

Total

100.0%

100.0%

 

 

 

Total Growth Year-over-Year %

44.0%

45.5%

 

 

 

Source: Strategy Analytics

 

 

The full report, Microsoft Hits 10 Million for First Time as Android Reaches Record 81 Percent Share of Global Smartphone Shipments in Q3 2013, is available to subscribers of Strategy Analytics’ Wireless Smartphone Strategies (WSS) service now.


October 29, 2013 14:34 sbicheno

Project Ara is one of the first significant signs of Google doing with Motorola what many hoped it would: stimulating smartphone innovation. It is well-known that smartphone hardware innovation is currently at a plateau, with successive flagship devices offering evolutionary, rather than revolutionary, hardware upgrades. So Strategy Analytics welcomes any initiative designed to inject some creativity and lateral thinking into the smartphone design process.

Google is not afraid of innovation for the sake of innovation, with little apparent regard for latent market demand, and it’s not clear what the existing demand for a modular smartphone is. But among the potential benefits of such a device are: a possible cost-saving over the life of the device, with users having the option of incrementally upgrading a module, such as the app processor, instead of buying a whole new device, and the consequent ecological advantage of devices being discarded less often. There may also be enthusiasm in the operator/retailer channels and the component industry for this new commercial opportunity.

However, there remain many question-marks about this concept. The end-user market would appear to be limited, initially at least, to early adopters and hobbyists, with the mass-market likely to adopt an “if it ain’t broke don’t fix it” view on messing around with components, especially if the initial cost of such a device is greater than that of an equivalent one with integrated components, as seems likely. Then there is the matter of performance - how much of a performance hit will the whole system take by not having all its components integrated into one circuit-board, and is there even an industry-standard connector that all component-makers and hardware-vendors can use? If not, can Google develop one? There is also the matter of durability - what happens if you drop this device and what about dust-proofing? Lastly there is the well-established matter of fragmentation. Any current issues of this sort will surely be magnified significantly by such an ‘open’ hardware platform.

So we applaud Google for using its Motorola acquisition to drive smartphone innovation, and hope initiatives such as this encourage lateral-thinking in all parts of the smartphone design and manufacturing chain. But at this stage, and for the mid-term future, we see Project Ara as just that - a project - with niche commercial appeal.