Categories

The controversy of playing it safe: What's IDC's Smartphone Market Message?

IDC released a new forecast for the worldwide smartphone market which included a long range forecast–all the way to 2015.

Most people fixated on the share data in 2015. Not hard to do since whoever wrote the press release highlighted this flashy headline. Putting aside the three significant digits of accuracy on every data point and the hard to swallow declaration that a painfully underperforming (in more ways than one) Windows Phone will overtake iOS and BlackBerry to become the second largest platform by units/year in 2015, there is much more to the report.

Using only the public data from the press release we can put together a pretty good picture of the transition being forecast and determine some of the (unstated) assumptions being made. It’s these assumptions about the underlying market dynamics which illuminate far more than the falsely precise share data.

The following chart shows both historic platform performance (which is detailed in the Asymco Interactive data sets on a quarterly basis) and the forecast based on the given compound growth rate published.[1]

I see three main assumptions being made:

  1. Nokia (or more precisely Symbian) share will be swapped for Windows Phone. The transition period 2011 to 2015 shows approximately 150 million Symbian devices will be sold which is the stated goal for Nokia. IDC is making an assumption that the hardware vendors will roughly maintain their respective shares irrespective of platform dynamics and that Nokia will switch its share of users from one platform to another in a predictable way.
  2. iOS and BlackBerry will maintain share. Presumably this is also driven by hardware channel dynamics and relationships with carriers.
  3. Android will grow share slightly but the vast bulk of growth will come from market growth.
  4. Market growth is strong but undramatic.

Overall this is not a controversial set of assumptions.

Except perhaps that it assumes that the basis of competition in the market is unchanging. Of course it’s well understood that the basis has shifted during the tumultuous 2007 to 2010 and forecasts made before the iPhone was launched sound absurd today.

But IDC says that the unpleasantness won’t happen again. From listening to the conversations going on today on this blog and elsewhere, their assumption that things will not change (again) is fairly deeply ingrained, indeed conventional wisdom. In that sense IDC is not taking any liberties with the future. The projections of current realities onto the future leads to this type of forecast and status quo defenders should be satisfied, if not rejoice.[2]

However, there are a few more consequences of even this uncontroversial forecast which should make keen observers sit up and notice.

If we look at more than the before and after snapshots and comfortable pie-splitting sound-bites there are some profound seismic things being implied.

For example the entire market will be nearly 1 billion smartphones a year (in four years!). Even more startling, considering the “race to a billion” discussion we’ve been having, some of the platforms seem to be reaching that threshold rather quickly. The following chart shows the cumulative unit sales for the candidate platforms on a log scale:

 

Android is considered likely to break one billion units in five years post-launch. Windows Phone will sell nearly half a billion units and Blackberry will be well over that number.

I tallied the cumulative platform unit totals below:

No less than four platforms will have sold half-billion units by 2015. The suggestion that Android will “win” by having the most units sold seems as hollow as the suggestion that Symbian “won” by having the most users in 2008. Not so much because it will go on to lose them, but because there were plenty of viable alternatives for users to buy and developers to build for. Half a billion users cannot be easily ignored.

So even “safe” assumptions can lead to astonishing results in this market. Namely, IDC is saying that the smartphone market will not have any platform losers.

There is one more thing the report implies. If you look at the ranking of leading platforms (by units/year) in 2008,  2015 and, with a little extrapolation, 2016/2017 you get:


Rank in 2008 Rank in 2015 Rank in 2016/2017
Symbian Android Android
Other iOS Windows Mobile
RIM RIM iOS
Windows Mobile Windows Mobile RIM
iOS Symbian Other
Android Other Symbian

 

In other words, there is a complete reversal being projected. An almost perfect flip: those on top end up at the bottom and those on the bottom end up on top. That’s about as controversial as it gets. Pretty impressive for a set of safe assumptions.

Notes:

  1. You should ignore the shape of the curve between 2011 and 2015 as it assumes the CAGR is applied to every year. Although the press release shows a CAGR, the actual report may include various fluctuation in yearly growth. The starting point of 2011 and the end result in 2015 however should be the same.
  2. If, on the other hand, you believe that exponential growth, rapid gains in communications speed, new breakthroughs in interaction with devices, and entrants winning with new business models are causes for a disruption, then perhaps extrapolation may not be the way to forecast this market.
  • Ted_T

    Horace, a fine column as usual, but you could have saved some innocent bits:

    1) Claiming that Symbian's market share will translate directly into WindowsPhone market share makes the report a joke.

    2) Claiming that they can predict to three significant digits of accuracy in 2015 makes the report a double joke. (And not just IDC are guilty of that one. When will we see predictions like "Brand X will have a 11% ~ 15% share, Brand Y 22% ~ %28"?)

    Further analysis is hardly necessary.

    • asymco

      Those claims do great damage to the credibility, for sure. But I wanted to see whether there were deeper claims being made.

      • CndnRschr

        Doesn't look as though there were deeper claims, just erroneous (or lazy?) assumptions. It is incomprehensible that they did not include at least a disclaimer to the effect of: Assuming no new compelling platforms gain traction…. (along the lines of past performance is no measure of the future).

        What caught the headlines were two aspects. Firstly Android will "win" – the question you allude to is "at what cost?". Secondly, that Windows Phone X will take second place. These are safe bets based on conservative and out-dated thinking. While IDC cannot be expected to foresee dramatic changes, that is precisely what has governed this market since 2007. When the ground is this unstable, the value of prediction is very low. Therefore IDCs credibility and business depends on the market restoring order out of chaos. Think there is a vested interest in that?

        Take a page out of Grubers book and file the report for future Claim Chowder.

    • vinner57

      So true. The Symbian to Windows flip that's suggested is quite ridiculous. Surely two things can be assumed: Symbian is unlikely to achieve the 150M sales projected since the abandoning of an essentially dead platform will be precipitous; having abandoned a platfrom are not 'all bets off' as to the choice of replacement? Is it not likely that Android and IOS will share the spoils? Or is there some Nokia/MS loyalty-effect that's assumed to be in play here?

  • Omar

    I was actually shocked after reading that IDC report, it’s assuming a lot in regards to the various companies involved. I mean, look at apple for example, and their supposed desire to release a slightly slashed down version of the iPhone that will probably be fully subsidized by carriers.

    There are just too many variables that go against Microsoft in this scenario to suddenly put them in the number one position 4 years from now. This kind of analysis in my perception is very untennable and bold.

  • Steve

    It would be interesting to go BACK four years and apply the same assmptions. Let's see… 2007. What was the iPhone market share? Hmmm… I detect a problem with this methodology.

  • Justin

    Interesting there will be no new entrants, like WebOS.

    And I know I’m preaching to the choir, but Microsoft has shown themselves almost genetically incapable of adjusting to the reality of the mobile space. And I would argue, their customers, IT professionals, already have a Microsoft equivalent in the mobile space. RIM. So what motivates the switch? Security? RIM is fine there. Gaming? Apple and Android got that locked up, minus xBox integration. Usability? Apple and probably WEboS. Pricing? Android is free. So what is going to be the feature or set of features that causes this shift? Office / sharepoint / .net integration? This is what I keep not understanding about MSFT, as a new entrant in the mobile space.

    • CndnRschr

      But, but, but Microsoft always wins when they enter a market. With Nokia they are unstoppable. /s

    • Hamranhansenhansen

      Microsoft is not a new entrant into the mobile space. They are running the 7th generation of their mobile platform right now.

  • timnash

    In 4-5 years VoIP will have a much larger share of the market and for VoIP on the move, you can use any mobile device. Will smartphone even be a meaningful category? Or will it morph into PocketPCs with a mobile data connection?

    • Joe_Winfield_IL

      OK, call it mobile computing if you prefer. The telephony side of the "smartphone" moniker is not currently a big deciding factor for most buyers anyway. VoIP proliferation will lessen the importance even more, but smartphones are more about "smart" and less about "phone" already. But as long as WiFi isn't ubiquitous, a cellular data connection will be required, and by default the products will still be called phones.

  • http://ximagin.co/thecw The CW

    It's always the car that you don't see coming that kills you. the past is not a terribly good predictor of the future. if it were, life would have no surprises.

    forecasts like these never account for unforeseen innovation… and those can come from within existing competitors or from out of the "other" category.

    • Childermass

      Yes – you beat me to it. It is "other" that is the big flaw here. China may not be the economic behemoth some are predicting but it is still enormous. If and when Lenovo or someone similar launch their own OS (cut down Baidu?) a difference it will make.

      The crossover from Symbian to Windows phone is hard to believe, the spurious accuracy harder, but the worst is the parochialism.

  • http://twitter.com/e_orione @e_orione

    I'll tell you, the worst thing are the three significance digit in accuracy.
    They are so unprofessional, so marketing like, that make me believe they can't be serious.
    If you make a forecast four years deep, you have to know what are you speaking about, what is a forecast and how much time are four years in this market.
    If you know all that how can you use three significant digit?
    How much significant your forecast can be?
    All other assumptions are what they are, assumptions and predictions, valid as others, only time will tell, even if I must admit these are really bizare.
    The three digit show that there is nothing scientific, nothing mathematic, nothing statistical, only the old art of divination.

  • Eugene

    I honestly think I could do better than IDC. Ignoring any device from Apple, here is what they miss.

    1) Apple are at about 45% in Europe where they are on multi-carriers. Thats about their natural limit. There has been some erosion from Android ( from 50%) but mostly Android is killing Symbian. However in this very important market Android have just hit 12.5%. Thats why a lot of apps are still for iOS first. ( source :http://www.pocket-lint.com/news/38347/ios-massively-outshines-android-europe)
    2) Apple has yet to introduce a cheap model.
    3) Why do they assume loyalty to the nokia brand on hardware, if that hardware must change – for wp7 – to be a touch screen with one, two, or radically 3 buttons.
    4) Wherever Apple have gone multi-carrier they have doubled market share. America is an outlier in richer countries for iOS – it is 50% the share of Europe. That will change.
    5) RIM are in market share decline year on year. This report gives them the same growth rate as iOS.
    6) iOS stagnated due to Android's surge in China, and America ( mostly).
    7) That stagnation has nevertheless represented a growth in unit shipments of 100% year on year. The IDC report is expecting 18% y-o-y growth until 2015.
    8) They are ignoring China. China is the reverse of the US – a place where Android has taken off first and where Apple will do the catch up. 30% of Chinese will buy an iPhone, and 58% of Chinese would buy one if it were cheaper. ( source :http://tech.fortune.cnn.com/2011/03/29/survey-apple-poised-for-gains-in-china/)

    Without any guesses on any future products we can assume that Apple will actually take back market share from Android in the next year, and continue to get to about 30-40% thereafter. Supply permitting, of course. But everything is made in the same place anyway.

    As for their WP7 predictions, basically plucked from the sky. Copy and paste. I personally think that Nokia is doomed.

    I am willing to offer my services to IDC at any time.

    • winner

      Apple has been on multiple carriers across Europe yet it didn't stop Android going from 4% to 31% of sales in the last year (source: http://www.idc.com/getdoc.jsp?containerId=prUK227….

      Apple are third. Nokia 27%, Apple, 20%, RIM 15%

      Unlike the U.S. there is no big event (opening up Verizon) which seems likely to derail this trend and even if it sticks as is for a while Android has enough of a sales lead to match Apple's installed base in phones and iPods, maybe even iPads too.

  • berult

    Anything to break iOS momentum on the eve of a possible disruption on the scale of the touch revolution: iOS5/OSXVII entry into voice-over UI~AI integrated environment.

    The sheer unfolding of the noise machine, pundits, PAs, PRs, EOs alike, preclude a momentous event about to bear down on Apple's competition. The count down to June has begun, and so has the stirring up of false equivalencies and dead-end scenarios.

    The disruption's anticipated magnitude can be apprehended in two easy non-tech, layman ways:
    an orchestrated symphony played out in atonal counterpoints;
    the postponement of April fool's day to June hardware-free Smart's day; 

    IDC's Smart Phone Market Message? "Tell me, …I beg you, a nightmare it must be what in June I sense is coming my way…!"

  • stsk

    C'mon Horace – the IDC report was just an elaborate April Fool's joke. (maybe that's an Americanism – no April Fool's in Finland?) Nobody could possibly take the report seriously, right? It was just a humorous take on what analyst 4-year predictions of mobile markets would look like if they were done in 2006 (pre-iPhone). Nobody's stupid enough to make this kind of prediction and not be tongue-in-cheek.

    • unhinged

      "Only two things are infinite, the universe and human stupidity – and I'm not sure about the universe."
      — Albert Einstein

  • stephenreed

    From the IDC report:

    "Up until the launch of Windows Phone 7 last year, Microsoft has steadily lost market share while other operating systems have brought forth new and appealing experiences," added Llamas. "The new alliance brings together Nokia's hardware capabilities and Windows Phone's differentiated platform. We expect the first devices to launch in 2012. By 2015, IDC expects Windows Phone to be number 2 operating system worldwide behind Android."

    My take:

    IDC nowhere mentions the importance of what platforms are attracting developers. Although platform popularity draws developers, I think that its rather the other way around – great apps written by developers for a platform draw the smartphone buyers. There is no evidence of developer excitement about Nokia/Microsoft. Indeed Nokia just burned their internal and external Symbian developers, who will subsequently choose whether or not to develop for Nokia/Microsoft.

    Furthermore the tablet platform and smartphone platforms commonly share an operating system and thus have a compatible application environment. Application developers are very excited about the iPad on iOS and to a lesser extent with the upcoming Google Honeycomb Android OS version for tablets. Where is the excitement about Microsoft Windows Phone 7 tablets. Does *anyone* expect Nokia to have the second place tablet among all manufacturers?

    I predict that IDC will revise their forecast in a couple of years and lament the lost Nokia/Microsoft opportunity – no doubt attributing the failure to poor execution.

    • Hamranhansenhansen

      Developers being excited to a lesser extent by Honeycomb is a dramatic understatement. Honeycomb has been out for a month and there are literally 20 3rd party tablet apps for it, and a few of those are from Google. iPad launched with 500 tablet apps and by a month later had 1000.

      A big problem for Google is they don't have a native C API. On a full-size device, the porting of PC and game console apps over to the tablet is even more important than on phones. You can move an app from Mac to iPad in a few weeks, you can reuse 90% of the code. To go from Mac or PC or game console to Android means a total rewrite from C to Java. That's a year of work by a developer who knows both Java and C. There has never been a successful PC platform without native C apps, and Java has gone nowhere on a PC. It hasn't even done that well on phones. So it is going to be an uphill battle for Google on tablets. Especially if HP or RIM can get a native C API together and get iPad developers porting their apps over to those tablets.

      • stephenreed

        I consider the Honeycomb release by Motorola as a beta…

        "A Google representative said the company's newest version of Android, which is dubbed Honeycomb and built specifically for tablets, won't be openly shared because the software isn't yet ready to be altered and customized for a variety of devices."

        You are ill-informed regarding the Android platform. Namely one can write performance-critical portions of an app on Android in native code with their NDK. Dalvik, Google's own implementation of the Java language has done very well on smartphones – indeed is first place.

        It will not be an uphill battle for Android on tablets, rather its a downhill avalanche of apps trivially ported over from Android phones to work on tablets. That is the user interface issue that will get solved by Honeycomb and subsequent Android tablet software releases. I don't see even remotely comparable numbers of smartphone apps from HP or RIM that can be ported to their forthcoming tablets. RIM's Playbook may emulate Android for running its apps but that is not the real thing. And developers know that.

        Your points about the difficultly of porting an app or simultaneously writing apps for a multitude of smartphone platforms are valid. That's the foundation of my main point above. In a smartphone/tablet ecosystem divided by operating systems, developers must make choices about what to write for. Companies typically hire an expert programmer or teams of expert programmers for each targeted platform. Apple iOS is a must to cover the iPhone and iPad. Android apps may not generate as much revenue per sale, but there will be a lot more Android smartphone/tablet devices, so Android is a must. But will companies hire a third programming team to target the Nokia/Windows Phone 7? Or would they rather fund further development on the one or two winners for a much better return on their investment?

      • Carlos

        Google has a native C API for Android. You can read about it here:
        http://developer.android.com/sdk/ndk/index.html

      • stephenreed

        That's right. But the Android NDK is targeted at Java/Dalvik applications having certain native methods, rather then an app entirely written in C. From the developer's point of view that should be fine because Dalvik bytecodes trade off executable size for speed and platform portability anyway, and the hotspot-style Just-In-Time optimizer should heavily optimize the frequently executed bytecodes. Where native code is important is for data structure compaction and certain compute intensive operations where the built-in safety, e.g. array bounds checking, can be hand-coded away.

        It's a fact that native code, namely C/C-plus-plus/assembly, is much harder to write, debug and maintain than Java/Dalvik on Android or Objective-C on iOS. Developers, and the managers who fund them, often decide to forgo the last bit of hand-written native code optimization and instead spend their efforts on the next product iteration or an entirely new revenue-generating app.

        Thus low level native code as the chief application building environment is a marked disadvantage for a platform – not an advantage. Even *Microsoft* figured this one out years ago when they introduced the .Net framework to supplant the C/C-plus-plus based Windows API for developers.

  • Iphoned

    Does anyone have a better forecast to 2015 ?

    • Hamranhansenhansen

      This report essentially takes smartphones 2008-2011 and grafts it over smartphones 2011-2015. I would suggest grafting MP3 players 2001-2005 over smartphones 2011-2015.

      I think Apple will combine the iPhone and iPod lines this year into a comprehensive smartphone lineup and that dramatically increases their unit phone sales. If you count all the iPods from the last few years as phones, you see Apple is shipping a lot more mobiles than we think they are. Then you consider that we will see iOS 5-6-7-8-9, iPad halo, Mac halo, more Apple Stores, Apple's app platform continuing to be the only native C API on mobiles, Apple gaining a lot of Nokia expats who value an integrated device, Apple continuing to exploit economies of scale better than anyone else with their small lineup of mega-selling devices, and people in China loving the high-end brand … there are lots of opportunities for growth for Apple.

      So I give Apple 75% of smartphones in 2015. And 75% of tablets. Just like they had 75% of MP3 players in 2005 and continued to hold that market share for the next 5 years after that as well. I don't see why they can't do that when they have 25% after only 4 years with just one high-end model, and for the first half of that, you had to explain to people why they wanted apps in their phone. We haven't even had the iPod mini/nano moment in iPhones yet.

      I'm not saying that is not a bold prediction, but I think it is based on more solid facts than this IDC report.

    • pk de cville

      Morgan Stanley with Alphawise has a great report for the intermediate term.

      And they're predicting Apple will be HUGE in china and elsewhere, especially if Apple ships a 2nd lower cost model.

      MS is an investment bank. People listen to them. IDC is what? Consultants?

      Follow the money on IDC…

    • asymco

      If by better you mean more believable, I would say no. There is no way to forecast platform splits with any degree of confidence in one's accuracy. I'd say what we can estimate with confidence is:
      1. the overall market will grow perhaps to over 1 billion units per year
      2. There will be more than two platforms in use
      3. iOS will evolve rapidly, perhaps more rapidly than any other platform.

  • http://twitter.com/PeyloW @PeyloW

    Even assuming these numbers will be correct as far as market share goes. What are the predictions for revenue- and mind-share in 2015? Would Android and Windows Phone 7 generate any money by being at the top, and would people buying the product care?

  • Childermass

    Who pays for this research?

    It helps to follow the cash and I don't know enough about IDC to know, but the vested interests are often happier being reassured that not much will change. Keep those marketing and R&D budgets where they are, boys! It maybe isn't laziness or incompetence, but telling customers what they want to hear.

    Disruption is hard to bear when it is forced upon you, but worse when you have to be the agent of change. it's clear that, for example, the leaders at RIM would rather believe their own internal logic than see the clear signs of imminent collapse because if they read those signs they would have to do something, and something deliberately disruptive of their current business model. That takes a lot of courage.

    Another way Apple leads.

    • HTG

      I think you will find that over the past 20 odd years IDC and Gartner (the other soothsayers) have consistently favoured Microsoft in their 'analysis'… If you dig back into the archives of Roughly Drafted I'm pretty sure you will see a lot of commentary about this bias.

      Anyway, the report has given Microsoft what it wanted – a nice headline and talking point… the report is pretty risible as has been discussed on this blog, but what is in Microsoft's interests are the headlines…

    • MeAgain

      It would not surprise me if these numbers were ''Microsoft funded''. This gives their large IT based
      marketing army something to show Managers that they will soon be in control. And the time to re-up your expiring license is now.

      Microsoft has pulled out the old playbook and is executing the plays flawlessly. Deceit is the only play they know when trying to get ahead. When 2014/2015 arrives, lather, rinse and repeat. There is always A few suckers who will lap up everything they spit out.

    • okli

      finally someone hit the point : search where does the cash smell coming from
      IDC and Gartner are cooking in the Mr.Softs kitchen for many years now,
      or as my Granny used to say: " whose bred you eat, those song you sing !"

  • davel

    You make two very interesting points

    1) no platform losers
    2) flip in the ranking of vendors

    I am dumbfounded by 1.

    As for 2, I think it is widely assumed Android will own the smartphone space in terms of raw numbers. I mostly agree as they have been good at copying the innovation of others and it is free. Considering the lack of vision and execution by Redmond, it is a startling assumption they make in thinking the combination of Nokia hardware and MSFT software will rule the market. I am of course referring to Microsoft's seeming inability to win in any market not dependent on Windows OS/Office.

    I won't even speculate as to what Apple ( the prime disruptor in this space ) will do over the next 4 years.

  • Duncan

    Is there *any* accountability for these sorts of predictions? Does anyone ever hold IDC or other "analysts" feet to the fire when their forecasts go horribly wrong?

    I'd love to see a site that shows various predictions made and then the reality over time, with a score card showing who said what.

    That, and an electric cattle prod applied to the worst offenders.

  • http://twitter.com/JeffreySmith @JeffreySmith

    Excellent analysis, as usual, Horace, and I agree with all of it. The mobile market is a long way from settling into anything resembling the stasis implied by this report.

    I noted this report in a post yesterday, with some additional comments on RIM and HP. If you or anyone else is interested, the post can be found here on punchingIN.com.

  • Hamranhansenhansen

    What's missing from this IDC report is profits and technology. They are looking only at market share.

    Apple is already taking over half of all mobile handset profits. All phones, not just smartphones. From a profitability perspective, they are bigger than all the other makers combined. Also from a market cap perspective, they are the biggest player. And they have the technology lead by far: the only PC class OS, the only PC class (native C) app platform, the only PC class screen on iPad, and they make the browser engine that everyone else uses, except for Microsoft who clones it. So going forward, Apple are in a position to make investments that others can't make. They are in a position to do things technically that others can't match. They are setting the pace right now and others can't match them. They could speed that pace up.

    I mean, Apple can buy RIM from petty cash and barely notice it. Assuming that Apple and RIM stay neck-and-neck over the next 4 years seems pretty outrageous. That's like saying they are equal right now and will essentially stay equal. Well, they're not equal at all except in today's market share, but one is on the way up and one is on the way down. That's not equal.

    Apple may raise the bar too high for others this year with their ridiculously oversized data center, and they have a twin of that data center well underway right next door. Is RIM going to follow Apple into that territory? Nokia? HTC? Motorola Mobility?

    If there is one thing we have learned over the past 10 years with Steve Jobs: he thinks big. He thought big when he had a small company. Now he has a big company. I feel like the entire mobile market is in denial about Apple, even now. I think this IDC report shows that. It's like Apple just put on the world's largest set of boots and still everyone else is saying they won't step on us. Dude, you are about to get stepped on. All of y'all are about to get stepped on. You are in total denial if you think you are not. Steve Jobs has seen IBM enter the PC business and exit the PC business. He has absolutely no problem kicking Nokia out of the phone business.

    So I think the Apple role over the next 4 years is dramatically understated in this IDC report.

    • Duncan

      "Steve Jobs has seen IBM enter the PC business and exit the PC business. He has absolutely no problem kicking Nokia out of the phone business."

      Some of what you wrote sounds a little too much like Apple cheerleading (I don't disagree with the content, just the tone), but that sentence there deserves to be repeated.

    • pk de cville

      Great thinking. Let us know when you start your blog!

  • Niilolainen

    Great stuff

  • poke

    Didn't HTC transition from Windows Mobile to Android while growing its market? Couldn't Nokia similarly transition from Symbian to Windows Phone 7 without losing market share? What's the difference between the two examples? Android achieved such high growth rates because it was adopted by incumbents (Samsung, HTC and Motorola) who already had the necessary sales channels in place across a wide variety of carriers and in virtually all territories. If Google had come to the market with a phone, it would have been a different story altogether. I doubt Android would have any significant share today at all. Since Android's success has more to do with who adopted it, wouldn't the same be true of Windows Phone 7? I think their bigger mistakes are overestimating Android growth, underestimating iOS growth and underestimating RIM's decline.

    • Joe_Winfield_IL

      Two key differences:

      1) HTC was a first mover on Android. While others took a wait-and-see approach, HTC immediately went all in on the platform. As Android adoption spread, they had the advantage.

      2) HTC grew from a MUCH smaller base than Nokia, and was not tasked with a turnaround. Nokia is a huge ship to turn around, and they are not in direct control of their own destiny. Their current product isn't winning converts from other platforms, and the WP7 phones aren't expected any time soon. On its own, WP7 isn't doing anything to excite customers; Nokia customers are likely not holding their breath waiting for the new OS. By contrast, HTC only had to new manufacturing facilities (first as a white label manufacturer) to accommodate contractual demand.

    • KenC

      Android's initial hardware requirements matched WinMo's existing requirements right down to the funny ram limitation. That made a transition pretty seamless. Nokia's transition will be much harder.

    • asymco

      HTC did not abandon Microsoft's platforms but even while it transitioned to two platforms, it lost share. In Q4 2008 HTC had 9.44% share with mostly Windows Mobile. In Q4 2009 it had 6.42% share with both WinMo and Android. In Q4 2010 it came back to 9.67% share with mostly Android. HTC is now fielding a mix of Android and Windows Phone.

  • Joe_Winfield_IL

    Who is IDC's core customer for this type of report? I would guess that a certain amount of IDC's forecast is driven by their specific customer base. Reading the public information, it's difficult to imagine handing over hard-earned money for the proprietary detailed reports. What insight could there possibly be in the granular research if the broad strokes of the forecast are so obvious?

    • berult

      This IDC report sits comfortably on the following assumption and on an end-game prescription:

      -'all things being equal, …'

      -all gain …unequally.

      Fiction pragmatism easily spun around and internalized as legitimacy by proxy. It's a buyer Market.

  • handleym

    "2) Apple has yet to introduce a cheap model. "

    This is not really true. For a while now the "cheap" model has been last years model. And it's not like this is a secret. Apple runs ads on US TV saying, basically "The iPhone 3GS is a damn fine phone. Look at all these iPhone-y things it can do. And it only costs $49 with an ATT contract."

    There are many advantages to Apple, in terms of, eg, the developer ecosystem, in using last year's model as the cheap mode. Is going to a lower price ($19?) going to attract any more customers. Logically the answer is no since the contract is where all the cost is — though who knows how dumb the buying public is in this respect.
    As a practical matter, in the absence (as far as I know) of Android phones at a lower than $49 price-point it doesn't matter either.

    I don't yet see any reason for Apple to change this strategy. As far as I can tell Android buyers mostly split into
    – hardcore Apple haters
    – nerdy types who believe they really want the "control" Android gives them, and
    – people who don't really care, they bought whatever was shiniest in the store that day.
    Apple will never win over groups 1 and 2. As far as I can tell, for most of group 3, the traffic is one way — they have bounced between RIM, MS and Android over the years without much opinion, but once they bounce into an iPhone they stick with it.

    I'm saying this not as a "rah rah" Apple supporter but in terms of trying to give an honest impression of what I see as the current situation, but based on somewhat different dynamics from what Horace outlined. As long as the US maintains its current "hide the price in the data plan" policy, Apple does not seem to need to worry about price pressure from other smart-phone vendors. The only reason this could change would be if the pre-paid market for data became significant, at which point Apple might want an entrant in that space. But you have to ask yourself:
    – the carriers want to put that day off for as long as possible AND
    – the market for those sorts of devices is the sort of market Apple has never been interested in. Apple cares about profit and making a fine product, NOT about the compromises necessary to attract the lowest and least profitable segment of the bottom of the market. Leave that to Nokia and the 3c a phone profit they seem willing to accept.

    • timopg

      "While Tim stopped short of explicitly stating that Apple would pursue a lower price iPhone, he did state that Apple was working hard to "figure out" the prepaid market and that Apple didn't want its products to be "just for the rich," but "for everyone"; he also stated that Apple "understood price is big factor in the prepaid market" and that the company was "not ceding any market." Cook noted that Apple executives – including himself – had spent "huge energy" in China, noting that it is "a classic prepaid market." He further noted that the handset distribution model was poorly constructed and that Apple would look to "innovate" and do "clever" things in addressing that market."
      http://www.engadget.com/2011/02/28/apples-tim-coo

  • pk de cville

    "Who is IDC's core customer for this type of report?"

    Good question. Thanks for lining it up. Might it be Microsoft? Nahhhhhh….

    That would be too crass. Even for IDC and Microsoft.

  • Developer

    Been following these “analysts” for years. Microsoft is the customer along with unimaginative IT types who need to justify their desires to upper management.

    These reports are where the myth that MSFT has %90 market share in desktops comes from. This claim has NEVER been true, but it has been repeated enough by so-calked analysts and then repeated again my so-called reporters so often that I bet someone will respind to this comment claiming it is true.

    People generally believe what they are told because they are ignorant and they want to believe– hence android fans.

    • http://twitter.com/ERPLearning @ERPLearning

      Just ask the question…. How significant a source of revenue is Microsoft to IDC… hmmmm….

  • http://twitter.com/ERPLearning @ERPLearning

    Brilliant… 3G…VOIP…iPad… who needs a phone?….

  • Jmd

    Android, yeah. Ok. Somehow those 30 or so patent lawsuits are going to just go away, like magic ;) How will the economics of free work when Oracle is extracting it’s pound of flesh for each handset? How about when they can no longer use those patented features they “borrowed” from Apple and others. How about when they can’t use Dalvik anymore cos Oracle wants their Java back and every android developer has to rewrite everything in C.

    Yup Android has got no problems to stop it from being number 1 ;). In addition to the obvious fragmentation, poor user experience, the legal system and the rest

    It’s like the report is deliberately ignoring everyone’s problems except Apple’s

  • Pingback: How RIM can save the Blackberry – five ways to turnaround an underperforming product - Entrepreneur News | Australian Society of Entrepreneurs()