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Divinely inspired analysis

Three things stand out from Gartner’s latest smartphones forecast:

  1. They published a four year forecast with seven significant digits of precision (implying a margin of error of 0.00001%).
  2. There is a linear growth in total market size.
  3. There are no significant share changes after 2012.

The latter two claims are illustrated below:

Notwithstanding the defensibility of these claims Gartner analysts makes some further assumptions (quoted verbatim).

  1. “Apple will be interested in maintaining margins rather than pursuing market share by changing its pricing strategy”
  2. “RIM’s migration from BlackBerry OS to QNX which is expected in 2012″
  3. “Nokia will push Windows Phone well into the mid-tier of its portfolio by the end of 2012″

These assumptions may be valid, but from where I’m sitting, the first assumption contradicts Apple’s COO, the second would be an engineering marvel and the third would be an organizational miracle.

Putting together all the long term forecasts with what is already known about the market history gives the following combined forecast.

At the risk of repeating myself, the only thing I can summarize from this collective wisdom is that the over-riding assumption in forecasting seems to be that the future is an extrapolation of the present. That would indeed be a miracle.

 

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

    Nice.
    Thanks for pointing out the obviously lazy thinking behind some of these high priced, oft-quoted analysts.

    • OpenMind

      Then why do they still have audience? Who are audience?

      • r00tabega

        > Then why do they still have audience? Who are audience?

        Probably the ones who paid them (historically companies like Microsoft).

      • Childermass

        Despite all the other examples of nonsense: the spurious accuracy (embarrassing in a school child, fatal here), the insistence on 'media tablet' (willful stupidity), no new – possibly disruptive – systems anticipated (denial of history and economic reality), I still believe this question is at the heart of the matter. Who listens and why? Who pays?

        They do analysis for sale. HD does it for enlightenment. They are not pursuing the same ends.

        Analysis for sale dare not predict change. Right or wrong, predictions of disruptive change in the corporate world are as welcome as a fart at a funeral.

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

        Traditionally, I think Gartner and other analyst companies have existed to feed stories into the media. Coming from a biotech background, I used to look up the research papers behind news headliners such as:

        "New Research Shows That <Food Product> May Reduce <Health Metric>"

        You wouldn't believe how crappy the science behind some of these reports are.

      • http://mobiledeviceinsight.com Kevin Taylor

        When budget decisions and new product development research is funded executives want some external resource to reference which justifies strategy or potential addressable market.

        By quoting known brand sources they transfer responsibility and accountability to the research firm, so you can see why they have an audience. If the forecast does not work out they can blame the analysts.

        The problem is as Horace points out they are more selling a "narrative" than a forecast. But the buyers don't care.

        These forecasts in stable times were understood by most who buy them to be "as accurate as they can be" and that they are mostly unreliable after one year.

        Now the analysts confidence in innovation predictability factor is very shaken so the analysts are taking a cautious approach and pulling a forecast out of their _ _ _ that shows as little change as possible. The Symbian replacement with WP7 is Nokia policy so it disappearing is not a forecast.

        The error here is that the analysts forecasts are not a different reading of indicators and other information available, they are intentionally ignoring much of the information.

        The result is a middle of the road forecast that is politically correct for some big customers who still won't be happy with it but will not cause a revolt.

        However for the platforms that have a much higher percentage than they should, wasteful investment will be made by the companies in the ecosystem who use the reports for decisions as well as the IT departments of that platform"s current and potential future customers.

        But if an executive has no other documented source available they will use these forecasts.

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

      What a slur! They went to seven digits of precision! They have a proven track record of precisely predic.. oh, wait…

      • HTG

        Yep, 7 digits of precision – you would have to think that Gartner were disciples of 6 Sigma or something… who'da thunk it??

  • Max

    Superb. You are the man!

    • Kristian

      Second that!

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

    Coming from a basic undergraduate background with no statistics, this looks sloppy.

    Their basic assumptions *are* explicitly stated, if open to debate.

    Not that it matters for myself, but how is this trivial analysis useful to anyone who has to plan an investment or a business in the industry? Who can actually effectively use this information of dubious merit?

    • jason

      well of course it looks sloppy to you, as you have no background in statistics. when you take undergraduate stats, you learn that a) linear models are easy to understand, b) when n>30, you can assume a gaussian "normal" distribution (the law of large numbers) and c) normal distributions can be extrapolated using linear regression.

      you're questioning of this analysis just shows how little you know. you're the type of person who would rather be broadly right than precisely wrong. i suppose you thing that housing prices will ever fall precipitously or oil prices will breach $100 a barrel. that heretical thinking won't get you very far in this world. please, take a stats class and end your ignorance with arrogance.

      • jason

        "i suppose that you *think*…"
        damned muscle memory overriding my rational behavior

    • maddoguk69

      I'm confused. Are you calling the original Gartner analysis sloppy, or Horace's analysis/commentary on Gartner?
      If it's the former, then join the club.
      If it's the latter, then… you're not from around here, are you boy?

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

        Oh, I see how it could sound like the latter.

        I was referring to Gartner's, not Horace's analysis.

  • http://ximagin.co/thecw/ The CW

    Your last paragraph should be tattooed on the foreheads of pundits of every ilk.

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

    I repeat myself like you did Orace, but seven digit in a forecast is not lazy thinking, it's not thinking at all.
    The other assumptions are nothing compared to this one.
    They cannot be serious.

  • http://damienzhang.com Damien Z.

    It's interesting to see this prediction that Android is basically going to gain share at the expense of Symbian and RIM. Given Google's recent strategic decisions to be less open with Android, I wonder if that would prod spurned manufacturers to go with Windows Phone instead.

    I also find the high significant digits of their predictions highly amusing.

    • r00tabega

      I somehow doubt that Google's position on Android being "less open" is going to prevent any current Android manufacturers (including Android-derived platforms like OMS & Tapas) from jumping ship.

      What this does, however, is slow down Google's complete domination of the feature-phone market, as the open-source code will now have a greater lag and difference from the Google-branded OS. This won't help the Huawei and ZTCs' of the world compete against Google-branded phones, or other more up-to-date smartphones running say, iOS or WebOS.

      It has been pointed out that basic Android can be "cheaper than free" due to the positive branding (aka free marketing) and no royalties. So a year-old android version would still compare VERY well against say, Symbian.

      • http://damienzhang.com Damien Z.

        Yeah, that's an interesting point. Even if being less open doesn't slow down Android penetration into the feature-phone market, the penetration will happen with much older versions of the OS. So while the marketshare numbers could still hold, there could be a higher proportion of devices running older versions. So this strategy, meant to reduce fragmentation, could actually institutionalize it.

      • unhinged

        That inspires me to recall one of Microsoft's complaints back in the day, that innovative new hardware options were not being adopted quickly enough by the bulk of manufacturers. Could this be Google's attempt to spur a core set of manufacturers (the OHA) to continually push the hardware envelope? And will this result in a two-tier attack on the market, with the low-cost manufacturers running older versions of Android on ultra-cheap phones that suck up more of the feature phone market while Samsung et alia compete in the high end against Apple?

      • http://damienzhang.com Damien Z.

        I actually think that the manufacturers are doing fairly well now on the hardware side when it comes to phones (tablets are obviously a different story). It's the software that's not being updated fast enough because it's up to each vendor to update their proprietary customizations and drivers following each Android release. But the comparison to Microsoft is very sharp. Google must also be frustrated that the hardware makers aren't keeping up.

      • Simon

        My theory is that most companies, especially small ones, detest spending too much efforts into optimizing Android to the hardware unless it is something that visually differentiate the products from others. The whole point of Android was that it would be a cheap iOS lookalike with its own benefits such as Google maps with navigation, so the hardware manufacturers simply do not want to spend money on the software side because that would defeat the purpose of going with Android in the first place.

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

        The big problem that I see isn't that the manufacturers don't want to do a better job, but that they don't have real intimate knowledge of an OS that is constantly changing and they have really short development timelines. Apple can afford to spend a year fine tuning it's system integration because it operates in a shroud of secrecy. Manufacturers have to get the phones out within a couple months after the release of the new OS, unless they are the lucky few who are partnered with Google. Even then, their release schedules are super short.

  • tsw

    "seven significant digits of precision (implying a margin of error of 0.00001%)"
    Do they even have numbers as precise as these for the >past<, the year 2010?

  • newtonrj

    “Consumers who already own an open OS communications device will be drawn to media tablets and more often than not, to media tablets that share the same OS as their smartphone,” Ms. Milanesi said. &ldquo ;http://www.gartner.com/it/page.jsp?id=1622614

    So the halo effect is in place – phone users will adopt tablets of the same OS and tablet OS users will adopt phones of the same ilk. This is predicated on the belief there are apps worth porting & experiences worth duplicating. It is questionable since, to date, Android 3.x is only available on one tablet device and zero phones. It is then assumed the OHA will expand the 3.x tablets available and bridge the phone deployments in time for the fall/winter phone refresh season? That secondary market stores, browser, app versions, search engine decisions, hardware availability and forked OS deployments don't dilute adoption? Hmmmm -RJ

    • KenC

      Are other platforms as sticky as iOS? Are there switching costs involved in using Android? I mean if all, meaning most, of the Android apps are free, then what is the switching cost if the user chooses an iPad 2? Clearly, Blackberry is creating some enforced stickiness by tying their PlayBook to their handsets, but will it help or hurt?

      • newtonrj

        Good questions. Stickyness is balanced with motivation. How motivated is the user of any device to overcome stickyness?

        If the software quality is good/patched, the hardware reliable, battery life long, and the songs, apps and media are easily pliable between platforms, then stickyness is high and motivation is low.

        If the hardware platform is cheap, the battery life weak, software not well patched, media non existant, and app quality low, than stickyness is low and motivation is high.

        -RJ

  • Niilolainen

    This is why I like this blog so much. Great stuff.

    I never take any market share projections from anyone particularly seriously — excepting Asymco of course!

    Not sure I agree on the QNX issue though, wouldn't surprise me to see a QNX smartphone from BB during the next 12 months and the migration process complete during 2012. Didn't they acquire QNX in early 2010? One thing I have admired about RIM (in contrast to Nokia's Symbian/MeeGo prevarication) is that they said that they will move to QNX for all products in time.

    Also, in partial defense of the 7 significant digit thing from Gartner, models with enough reasonable, broad and round-number starting assumptions can yield long strings of decimal points quite quickly. However when charting my results I use only 3 sig figs. Of course even 3 sig figs is far too accurate, so when summarizing I will often bound my estimates. E.g. 165M from the chart becomes 160..170M in the executive summary.

    • Hamranhansenhansen

      My understanding is QNX has not yet run on batteries in a shipping product. Expecting it to be on a handheld device in 2012 might be optimistic. PlayBook has half the screen of an iPad and is also getting half the battery life.

      I think QNX is a great move for RIM, but operating system stuff doesn't happen fast. Apple bought NeXT in late 1996 and even in early 2001 when Mac OS X shipped, it was surprising how much further they still had to go. And that is with all that NeXT/Mac heritage behind them. It wasn't until 2003, 7 years after the acquisition, that Mac OS X started to purr. And look at the glacial pace of Windows and Linux, the ever germinating Chrome OS, and the sorry state of Android v3.

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

        Yes, but RIM has a solution to the battery issue: a shoulder-mounted battery pack.

      • Niilolainen

        Thanks guys. Great comments all.

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

        QNX has been running on low power hardware for a long time in the embeded world. It really shouldn't have any problems as a suitable phone/tablet OS. Arguably it's better suited than any UNIX derivative.

      • Simon

        But surely it will depend heavily on what RIM has put on top of the basic QNX ? I cannot imagine the Playbook QNX being the same one as one used for embedded devices.

      • http://mobiledeviceinsight.com Kevin Taylor

        Companies who have licensed QNX Neutrino RTOS in the past for automotive, aerospace, and military HW usually have in-house resources to highly customize the GUI and other higher level functions.

        Block diagram of QNX OS architecture is here: http://www.qnx.com/products/neutrino-rtos/neutrin

        RIM needs to integrate BB services combined with the GUI they have customized for Playbook. Also I assume some admin stuff for customer's servers will have to be deployed for a BB smartphone running QNX. That is likely the reason the Playbook is launching with WiFi only.

        RIM's rep said the reason for WiFi only is security in that BB services run on the smartphone when it is tethered to Playbook. The Playbook is only showing a "view" of email and other secure information sent to it from the BB smartphone.

        I would expect that a different device running QNX would not be able to run applications that run on Playbook, but I have not heard any statement on that.

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

        They've had a lightweight and powerful GUI for quite some time also in their Photon GUI. It's a long time since I looked at it which was back when QNX was a possible candidate for replacing AmigaOS, so that dates it doesn't it!

        Anyway, back then it was cool. Some of the demos showing message passing between two different computers as a window was moved off screen on one computer to appear on another was just plain cool with half the window contents running on each computer. The kernel is a true real-time microkernel too. Really their tech is top notch. Then again, so is Symbian before Nokia stuck S60 on top.

      • unhinged

        There's a great article by Guy English on RIM, worth a read: http://kickingbear.com/blog/archives/83

    • asymco

      Note please that I would not put forward such an estimate (4+ years). I'm nervous enough about forecasting platform 3 months ahead.

      What I would say is that I don't think Android will remain cohesive that long–that is I don't think it will become somewhat like what happened to Unix: there will be "Android-like" OSs just like there are "Unix-like" OSs. It's already happening actually.

  • TheOtherGeoff

    The key problem for Gartner is that they tend to focus in on corporate decision makers, both in trying to predict the market, and also in trying to predict what the decisions makers want to hear. This is such new ground for them, for anything other than 'more of the same, only faster/bigger' to be said would actually require synapses to fire.

    It is interesting that they are in the 'burn me once mode' with Microsoft, yet feel they will retain 100% of the MS+NOK marketplace.

    re: halo effect. The major differentiator here is that this market is being driven by a convergance of consumer and business productivity and mobility. Where work/home/play overlap, mobile reigns supreme, and where that overlap has the most ease of use (remember, these will be the people who are either buying their first mobile device, or more likely, looking to buy their _last_ platform_. Apple/iOS has a track record and a thriving ecosystem, whereas, Android does not (other than it's for self-integrators… not the marketplace for the over 50 or under 30 non-Nerd types). RIM has no plan other than to adopt all plans, Samsung/Moto control only one strata of the ecosystem, and MS/Nok are really just playing to the carrier/OEMs strategy. Maybe I'm blinded by the purity of Apple's unified field theory of consumer computing becoming the 'dial-tone' of the Internet in the 20-teens (and suffering the anti-trust issues that Ma Bell had 30 years ago, [apple will be accused of stifling innovation by 'controlling' the consumer and business experience])

    • Hamranhansenhansen

      Another thing to remember with halo effect is all the people who are 20 right now and can't remember a time when they didn't have an iPod. They not only love their iPods; they not only love Apple; but they also expect all technology to "just work" like an iPod and reject things that don't. They look at changing a CD as unnecessary maintenance work.

      I met a girl from Texas who was about 21 and she was talking to a friend of mine, "Dell … Dell … Dell," and then she took out an iPhone and a MacBook. It turned out the Dell in question was her mother's computer, which was down again with a virus. That is someone who will never be a Microsoft customer.

      So every year that goes by, Apple gets more of a halo advantage.

  • Pingback: Half of World’s Smartphones Will Run Android by 2012, Says Gartner | Golden Key Coaching

  • http://jscariati.wordpress.com/ James

    These Gartner forecasts are useless. The only way they can hold true is if all innovation stagnates, there are no further disruptions, and everything continues along exactly as it happens to be going right now. Given how much the market changed over the last 4 years – and we’re still in the very early stages – that seems exceedingly unlikely.

    If anything, Gartner’s estimates are a forecast of exactly what will NOT happen. Thanks, Horace, for making this so obvious.

  • iphoned

    >>Apple will be interested in maintaining margins rather than pursuing market share by changing its pricing strategy”

    Pricing aside, wouldn't iPhone gain market share just by expanding carriers? 3x in the US alone by going to Verizon, Tm, Sprint, Virgin, and MetroPCS?

  • http://www.apple.com Fake Tim Cook

    Apple learned from the Mac how not to do it.
    Apple learned from the iPod how to do it right.
    Apple tried with the iPhone but has been hampered by carrier dynamics.
    Apple has won the tablet wars before they've even started.

    We know how to build successful platform and thriving ecosystems.
    Things line up quicker sometime(iPad) and sometimes a little slower(iPhone).

  • Tony

    Given Gartner’s completely ridiculous tablet forecast last year, and ridiculous iPhone forecasts in the past, why are they still in business?

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

    Sadly, Apple is getting beat in SmartPhones even when the price at parity with Android.
    It just looks bleak.

    • iphoned

      Apple is far from getting beat in smartphones. In fact it is looking bleak for Android.

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

        You're in a state of denial, Android's market share is running away from iPhone. All of the surveys agree.

      • Jim

        Which Android phone are you refferring to?

        Tell you what, to make it fair, replace iPhone with iOS and then re-phrase your statement and then tell me what the survey's say about that.

      • iphoned

        >>You're in a state of denial, Android's market share is running away from iPhone. All of the surveys agree.

        Your are not seeing the real picture. Let's take just the US for simplicity sake. Android has been available to the 100% US mobile subscribers, 67% unopposed by iPhone and desperately pushed by operators via 2-for-1 and 3-for-1 discounts. iPhone has only been available to 33% of US subs, fully opposed by a variety of Android devices.

        So Android should be outselling iPhone in the US by a factor of more then 3-to-1, yet it barely does son.

        Once Verizon results with iPhone are reported, we will see where things are really headed. I predict grim tidings for Android.

    • newtonrj

      COO Tim Cook stated that Apple was manufacturing constrained to make enough iPhones in this 'bleak' market. Yep, they are just going out of business doing this. Can't see any reason to continue, you must be right. -RJ

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

      Show me one person who chooses an Android over an iPhone given the same price and carrier conditions — and I'll show you five who choose an iPhone.

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

        You should publish that survey, asymco will surely blog it.

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

        @kleptco

        Let's move away from the Android versus iPhone talk. Talk of market share can be short-sighted in rapidly changing markets. (Recent example: Netbooks in 2009)

        I think the important thing to consider is what the user will demand from their smart phones in 2 years and which platform is structured to best serve those needs.

        If you believe that smart phones are "good enough", then I agree. Android will kick butt. But, if you believe that there is still a lot of innovation left in the space, then [Microsoft-Nokia], Palm, RIM and Apple can innovate faster and build defensive moats faster than Android will be able to.

      • asymco

        In a recent data point, one company in the US (Clorox) offered its employees a choice of smartphones. Two thousand (a significant number) employees could choose (at no cost to the employee) from iOS, Android and Windows Phone. 92% chose an iPhone, 6% chose Android and 2% chose Windows Phone.

        This is a pretty good survey method since price and availability are taken out of the equation and the choice is for an actual device, thus relating directly to your original comment.
        http://www.computerworld.com/s/article/9215598/Cl

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

        Well. Clorox recently got rid of Blackberries and let their employees choose between Android and the iPhone. According to their CIO, 92% chose the iPhone. So your ratio is wrong.

  • Hamranhansenhansen

    The iPod touch is a low-end iPhone just staring the entire industry in the face and they avert their eyes and pretend it doesn't exist. It is half the price of an iPhone 3GS. How hard is it to add 3G to it? How hard is it to add 3G to an iPod nano? How hard is it to keep selling 3GS for even less? A friend of mine just bought a 3GS at AT&T for $19 and was thrilled.

    There is no doubt in my mind that a complete range of phones is coming from Apple. Why would they not? People who have the highest-end iPhone today will continue to buy the highest-end one tomorrow.

    • Iosweeky

      iPhone Air is the likely model to arrive. Less features, high on style, starting at $399 , or free on contract. Coming late 2011 / early 2012.

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

    If you fancy a completely off the wall prediction try GigaOm who are predicting Symbian still at No. 2 by 2015.
    http://gigaom.com/mobile/when-exactly-is-the-timi

    • asymco

      As much as I'd like to believe that, and given market forces that would be plausible, but I believe Nokia will have a contractual obligation to end Symbian.

  • YipYipYipee

    I agree there will be a whole range of iPhones, some exclusive to markets like China, India, Russia, etc.

    I am thoughtful of whether it is a good thing for Apple to have the largest market share. After all, being a Apple owner is kind of like being in a exclusive club. Their products have a mystique all their own. Having said that, I do want Apple thrive organically.

    Ubiquity can be a “Catch-22″.

  • chandra

    Or to run a mile …..

  • davel

    So Gartner copied IDC's methodology. It is not surprising that they choose rapid growth of MSFT. Microsoft and the people who like the company want it to do well. The reports are sold to people like that. The assumptions are just as valid as any other. Who knows the future? As you have pointed out disruptions can come from anywhere, even Nokia/Microsoft.

    I do not happen to believe that and I think Google will have its issues keeping their 'platform' sane, but analysts will repeat these numbers just like they repeated the 2 million Samsung tablets sold last year that Samsung itself refuted but is still widely quoted by most reputable media outlets.

  • gslusher

    "…the over-riding assumption in forecasting seems to be that the future is an interpolation of the present.

    That should be "extrapolation of the present." "Interpolation" is estimating between data points. What Gartner did was to extend some sort of current trend out further, beyond the data points. That's extrapolation. Interpolation can easily be quite useful and close to the "real" value, as long as the two data points are not too far apart and the function/phenomenon at the base "behaves well"–e.g., there are no sudden changes.

  • Nigel

    So, on the subject of strangely simplistic predictions from analysts who don't get called on it when it all turns out different, do you believe in an Android dominated future yet?:
    http://www.asymco.com/2010/11/03/what-do-you-have

    just 5 months ago you said:

    "The addressable market for modular solutions will have to grow much faster than that of inter-dependent vendors. [The chart shows in-line growth--again due to the overall growth of the market. The green guys above won't just roll over.]
    The split of licenses between Android and Windows Phone within the addressable market must favor Android. [Again, this is unlikely as "politics" will interfere. (I won't even touch IP issues.)]
    The current modular vendors will not become inter-dependent or the current inter-dependent vendors will become modular. [Now why would they tear themselves apart if they are growing?]
    The profitability of Android vendors must be high enough to make modularity sustainable [more about this later.]"

    Which I'm counting as 0 for 4 in your predictions, or alternatively 4/4 in favor of an Android dominated future. On a similar note, do you plan to cover the story about HTC's market cap growing to exceed RIM and Nokia?

    • Niilolainen

      Fat lady far from singing on this one Nige

    • unhinged

      Just 5 months ago Horace said:

      "For an Android dominant future, several conditions must be met; one will need to believe all of these to be true:

      The addressable market for modular solutions will have to grow much faster than that of inter-dependent vendors. [The chart shows in-line growth--again due to the overall growth of the market. The green guys above won't just roll over.]
      The split of licenses between Android and Windows Phone within the addressable market must favor Android. [Again, this is unlikely as "politics" will interfere. (I won't even touch IP issues.)]
      The current modular vendors will not become inter-dependent or the current inter-dependent vendors will become modular. [Now why would they tear themselves apart if they are growing?]
      The profitability of Android vendors must be high enough to make modularity sustainable [more about this later.]"

      This is probably an oversight, but to me your quoted section above does not frame the context for the items you list. I have added the previous sentence from Horace's post to add clarity.

      Now, let's get to your assertion that Horace is zero from four:
      1. Addressable market growth. I agree with this, simply because Apple is creating more demand than it can fill. However, we must also consider the term for which this will remain true – will Apple be in a position four years from now when it still cannot manufacture enough devices to satisfy demand? Will there be another disruption to the manufacturing capacity of the supply chain, like the earthquake in Japan? Will Android vendors be constrained in the short term by the earthquake effects, and will Apple during that period gain in share because it has more secure supply?

      2. License split between Android and Windows Phone. Too early to call. My personal belief is that Microsoft will gain a reasonable but not significant share of the market – around 10%, I think. No data to back that up, it's just a feeling.

      3. Vendors will not change from modular to inter-dependent and vice versa. Look at Samsung with Bada, HP with WebOS – these are signs that vendors are at the very least hedging their bets with strategy and are trying out an alternative to the modular approach. So the point goes to Horace here.

      4. Profitability of vendors must be high enough to sustain modularity. Another point to Horace; Samsung is the only modular vendor with profits from mobile and it is arguable that those profits are coming from components rather than finished products sales.

      • Nigel

        1. Yes, Android growth at over 1000% vs. Apple and Market growth of 60% seems fairly clear. To be fair to Horace, you'd need to add other Modular OS's like Windows to the mix but Android's growth is so ridiculous that not even that could bring the figure down much.

        2. 10% of the market to Microsoft, even the 20% that Gartner etc. are predicting is still only 1/3 or less of the modular market. This is clearly favoring Android.

        3. You may have missed this, it's not like it was big news or anything but Nokia is switching to Windows mobile, which is a switch from integrated to modular. Horace would have been even more wrong if they'd gone for Android, which apparently was the second choice. He specifically says they won't switch, and was clearly wrong. (I think it was a very bad decision, and therefore hard to predict but that's life in the pundit game)

        4. Samsung is the only one making profits from modular? That's the kind of disconnect from reality you get if you read too much Asymco. What about HTC? I'm not claiming they'll beat Apple on profits any time soon, but they seem to be giving the other integrated players (RIM and Nokia) a run for their money right now. Certainly enough to sustain themselves.

    • asymco

      I still do not believe in an Android dominated future. In fact I don't believe in much of any future for Android.

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

        I think you are going to have to elaborate on this one.

  • famousringo

    Devil's advocate:

    Maybe extrapolating the present is all people want out of these big analyst firms. Perhaps they want to know where the current trajectory of the market will lead in the next four years so that they can then decide whether forthcoming strategic shifts are likely to be successful or not. Gartner paints a background that takes care of the more certain variables and leaves it to others to guesstimate how risky variables (such as RIM's QNX shift and Nokia's WinPho deal) will influence that trajectory.

    And now to poke a hole in my own argument: Really, how useful is Gartner if they can only offer insight into variables which are easily predicted?

  • Andres Zuse

    Well it's easy to be a smug basher, Horace. Why don't you put your money where your mouth is and give us some predictions that we can come back to in 3 years?

    • Brenden

      Horace provides the insights that he sees, and does an excellent job of it. Perhaps you should accept your own challenge, if you think that would be a useful exercise, because otherwise you come across as a bit of a "smug basher" yourself.

    • KenC

      Actually, if you got Horace's point, you'd know that he considers predictions 5 years out to be a fool's game, and that straight extrapolations with sig figs out to 7 digits is nonsense.

      • Iosweeky

        Yes, there are a multitude of companies that have the brand-name and resources to enter into the mobile handest space, with their own mobile OS. Especially if HTML5 negates some if the need for a large launch app catalog.

        Facebook, Sony, Nintendo could easily enter the field and gobble up small chunks, samsung, nokia, Motorolla could end up pushing their backup options, and let's not forget the multitude of Chinese manufacturers that could dominate the worlds largest market – shutting out foreign competitors. Even governments could get in on this action (I'm sure Beijing would love 30% of all Chinese app sales).

        And then there is the unknown. The garage hackers, the group of employees that leave google/apple to start their own company, and the possibility that the 'cloud' eliminates the handset OS altogether.

        You must be a fool to think you can predict 5 years out.

    • Niilolainen

      I think another point, although not explicitly made is that the big analysts have virtually no choice except to project the status quo as if they, for example predict failure for the Nokia/Microsoft alliance they might get less business from those companies. They can't rock the boat.

      I know for a fact that Gartner has some pretty sharp people, but they are not necessarily able to express their opinions on these politically charged topics.

      And BTW, this blog is littered with specific predictions that we will be bale to hold Horace to down the line. You should look back at the archive. However, I won't be getting shirty with him if he doesn't get the numbers spot on, what I enjoy is the insight.

      • Relayman5C

        If any people at Gartner were smart, they would go to Wall Street and make $20 million a year and up.

    • asymco

      Because it's impossible to predict the future with this level of specificity. Anyone trying deserves ridicule. Anyone humble enough to decline deserves respect.

  • Kristian

    The Funny Thing Is That Apple Is Just Stretching It's Muscles. They Will Do The Same Thing As They Did With the iPod.

    • http://ozechad.wordpress.com ozechad

      …yes and remind me who dominated that marketplace? Spot on. Soon we will see, more Disruptive, Smaller and Magical game changing devices that captivate the heart, mind and imagination of the entire telecommunications marketplace. It's now all about beautiful, innovative and captivating design.

      • Kristian

        Spot on indeed ;)

      • Niilolainen

        Right now it is. But for many years pre iPhone it was about super-segmentation, scale and efficiency.

        The pendulum will swing back that way one day, I just hope that day is a long way off!

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  • Plist

    I appreciate a disruption as much as the next guy but realistically there will not be another disruption before 2015.

    The iPhone arrived like a thunderbolt that shook the world..but that doesn’t happen often. Why is everyone expecting it again so soon? Now is the time for the storm to settle and the market to solidify. Now is the time for Apple to cement their position. In short, now is the time for Tim Cook, not Steve Jobs.

    • Kristian

      Apple is going to do huge things in the cloud and in the enterprise. Storm has just began. Apple has cemented their position over decade ago. Rest has just been implementing that to the reality. Tim Cook is my favorite, but Steve Jobs is not going to go anywhere. If he dies he will be sainted faster than pope and after that everybody in the Apple knows what they have to do as they already know it. Their Steve Jobs Genes are already fully activated.

    • kizedek

      Except that it did just happen, again, just last year. The iPad.
      Both the iPad and the iPod Touch are ignored by pundits. Oh, and the Apple TV. Just this week the news is that TW is falling all over themselves to line up recalcitrant media producers to get onboard with their iApp. Who'd a thunk a TW would do that over their own dead bodies.

      The point of disruptions, and arriving like thunderbolts, is that no-one knows which direction a disruption is going to come from. That's why it's a disruption.

      So, Apple may not shake the telecoms industry up with another phone, eh? Well, who said they had to shake it up with a "phone"? Afterall, Apple are the guys about which it was said, "we've been in the phone business 10 years; these computer guys aren't just going to walk into this business."

      • Kizedek

        When there is speculation on how Jobs/Apple picks products to develop, and what process they use to pick "winners", I think one little criteria is often overlooked: I think they sit down and say, "how can this disrupt the way things work right now?"

    • http://mobiledeviceinsight.com Kevin Taylor

      Plist By definition a "disruption" can not be predicted if you are not aware specifically of what it is.

      For example everyone in development knows the ARM Cortex A-15 is the next mobile processor chip coming in products in late 2012. And if it is a little early that won't be disruptive.

      Many people can imagine things that can be done with more processing power that uses less energy. But even successful new ideas that replace old ones will not be "disruptive".

      But if some amazing lifestyle changing function comes about beyond expectations that makes older and competitor products useless, that is disruptive. Even if the Cortex A15 makes the innovation possible, it is the innovation created that is disruptive, not the processor.

      So for me, I can say I don't know if there will be another disruption between now in 2015.

      If I extrapolated the past and had to make a call I might say not very likely between now and 2015.

      However if I reflect on how technology and communication are accelerating the rates of change, the growing popularity of of social tool for innovation, I might say that a disruption is very likely between now in 2015.

    • asymco

      There's too much going on for there not to be another disruption brewing. You can't predict the timing but the number of people and resources being poured into this industry implies that it won't reach equilibrium soon.

  • Kristian

    "I'm considering offering Asymco t-shirts for sale. Which would you buy?"
    "One with a chart (53%, 227 Votes)"

    That will be the success story of it's own. Summer is coming and we need t-shirts with sexy charts =)
    (Max Os X uptime 99,999% compared to… xD )
    I will order 3 and my size is L.

    Apple is A t-shirt company. They make t-shirts for every single occasion. I have had some 40 t-shirts from Apple and I am not kidding. Apple could expand to underware though :D

    • Kristian

      They already have socks x)

    • Niilolainen

      I think Android's pursuit of the biggest losers would be a good t-shirt…

  • yetanothersteve

    on top of the usual… kudos for the level of precision comments. It's a real peeve of mine. The number of digits is not a formatting decision, it is a piece of information, showing a level of confidence and precision. Sloppy thinking, sloppy work. Amateur would be a compliment.

    And yes a linear interpolation is not a forecast. Unless you're forecasting a miracle.

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  • dubTX

    Reminds me of the "nobody ever got fired for chosing IBM". Lazy, conservative, easy guesses. A seventh-grader could "forecast" based on the past this insightfully.

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  • TwangisKahn

    Apple thought it had 10 year head start like the Mac did. In really the software goons at google copied the iPhone in less than 3 years catching Apple flat footed. They waited too long to get out from under ATT and still concede 1/3 of the market by not having an offering on Sprint and TM.

    Now they are "talking" about an inexpensive iPhone, but if they wait as long as they did to get to Verizon it doesn't look goo.

    The only saving grace is that the pace of Android has slowed considerably. They out kicked their coverage as they say in American football.

    Apple really needs to move quickly.

    • asymco

      Apple stated that they were 5 years ahead (Steve Jobs at iPhone launch event in Jan 2007). That period ends at the end of this year.

      Regarding AT&T, don't forget that the world is a big place.

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  • Seth

    Gartner’s figures don’t even have the comfort of extrapolation behind them. They actually show the combined WinPho/Symbian sales *falling* by 6% in 2011 and 13% in 2012 (which sounds reasonable to me). The combined number then does a miraculous u-turn and grows by 115% between 2012 and 2015! This reminds me of the grassy knoll scene from Seinfeld.

    I get the idea that WinPho will gain market share at the expense of Symbian, but where does the massive organic growth Gartner predicts come from?

    • Niilolainen

      Great catch.

      We can only speculate
      – Nokia and Microsoft currently employing Gartner to do strategy development and this is when there powerpoint says the implementation phase begins?
      – Nokia acquires ARM?
      – They also are bearish on Android and see Microsoft as the only viable and licensable alternative platform?

      Whatever it is I bet you don't get an explanation from Gartner

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  • maddoguk69

    I don't recall Apple "clearly stating" anything of the sort. Sure, they may have said they prefer to maintain their margins, but what company doesn't?
    Both Jobs and Cook are on record, however, as saying that they don't plan to leave any "price umbrellas" for their competitors.
    The reality is that, right now, Apple don't *need* to price things like the iPad any lower than they have done. The product is selling like crazy. Only a bunch of fools would drop the price while there is existing demand. What every Apple-bashing "analyst" and Fandroid seems to be ignoring, is that if/when it really comes to it, Apple have the production volume and cash to completely annihilate every other manufacturer out there on price alone. IF THEY WANT OR NEED TO.
    Right now, neither of those conditions exist.

  • berult

    You can't extrapolate out of only two sets of data unless you wish to squeeze a trend out of an epi-phenomenon. Neither can you interpolate, for there is one set of data missing in action, either 2009 or 2012. Gartner 'boldly' extrapolated a trendy 2012 out of 2010 and 2011's data, and then, having struck 'gold', he simply interpolated a projected three year linear growth rate out of a trivial extrapolation. There is a name for this type of beltway mathematics: tautological statistical analysis.

    Just like private political consultants, these people are in the 'momentum' management business. They work from both ends: they spin their way into slowing their target's momentum down, heaving out cherry-picked informations; they spin their way into building their client's momentum up,  spreading around dubious, corporate equivalencies. If they had their ways, the client would end up with a bountiful negative reality, negative as in photo negative, whereby the trail blazer couldn't be picked out from the background crowd …and all one would care about is to believe what blurry stopwatch image one is led to see!

    These guys are professional 'broad brush' artists; after all, Surrealism is just as vindicated an art form as Impressionism flourished to be…

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  • http://www.avivepartners.com Mukund

    Well written. I have always had an issue with Gartner and Forrester, especially with regard to their often simplistic analysis. They were active in the supply chain space for a while in the 90's and some of their findings were way off.

  • vroddrew

    Any forecast that projects market share trends like this is almost guaranteed to be wrong, and by a significant margin. As Smartphone adoption expands, it is increasingly likely to reach customers who have very different priorities than early adopters.

    To that end, a great deal of Android's appeal – its "openness" and ease of customization, will be less attractive than features such as ease-of-use and attractive User Interface. Every geek in the world already HAS a Smartphone – the battle now is for the rest of humanity.

  • http://mobiledeviceinsight.com Kevin Taylor

    If you go back and read the press release Horace links to at the top of his post you will see;

    "Ms. Cozza said. “Android's position at the high end of the market will remain strong, but its greatest volume opportunity in the longer term will be in the mid- to low-cost smartphones, above all in emerging markets.”

    "This reflects Gartner’s underlying assumption that Apple will be interested in maintaining margins rather than pursuing market share by changing its pricing strategy. This will continue to limit adoption in emerging regions."

    The margin versus market share comment is related to mid to low cost smartphones in emerging regions.

    Do you think Apple will in fact create a diversified portfolio that includes mid to low end smartphones in emerging regions?

  • Ziad Fazel

    The secret to Gartner's analyses:
    http://office.microsoft.com/en-us/excel-help/proj

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  • Lasve

    Why is it Abi research the only one who believe Bada will be a noticeable player??
    It seems to me that in the low end it's doing quite well..

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