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The Android and iOS pincer movement

Nearly all the data on smartphone shipments is now available for the second quarter 2011. Some fragments are still not public, including ZTE and Huawei (and any others) shipments. We also have estimates for the various platforms including an estimate for Windows Phone and Bada (though not for WebOS).

This allows the following chart:

Using the traditional color scheme which separates “integrated” from “modular” vendors, the chart shows overall volume growth and how the volumes are split among vendors.

The market grew at about 73% y/y and 50% compounded over three years and 9% sequentially. The y/y growth rates for individual vendors were:

  1. Samsung 525%
  2. Apple 142%
  3. HTC 124%
  4. Motorola 63%
  5. “other” 29%
  6. RIM 18%
  7. Nokia -30%

In terms of unit share, the pie charts below show the before and after (three year span):

And the stacked area below shows every quarter over a four year period.

The story is largely unchanged since last quarter except perhaps in the rapidity or deterioration in Nokia’s performance and Samsung’s partial exploitation of that decline.

It should be noted that not all of Samsung’s volumes are licensed platforms. An increasing share of Samsung smartphone volumes is Bada, an internally developed OS.

In the charts above I arranged the bars to place Nokia and RIM in the middle to show their double envelopment. A pincer movement is only an analogy but perhaps it’s evocative of what’s happening.

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

    Learn to read a chart.

  • iphoned

    Who are these "others" dominating smartphone share in 2007?

    Is it a visual illusion, but Apple share in q2 2008 appears same as now?

    • asymco

      Apple's share is now at 19%, the highest it's ever been. The share in Q2 2008 was 8.7%.

      The "Others" in 2007 were primarily the Japanese variant of Symbian, PalmOS, and variants of Linux.

  • http://twitter.com/virg1l @virg1l

    Wow, Apple's share is essentially flat for about 2 years now!

    • Steve

      Pretty amazing that they still managed to take 2/3 of the profit from the entire segment, eh?

      • http://twitter.com/virg1l @virg1l

        Definitely!

    • http://twitter.com/virg1l @virg1l

      Whatt happened here? I was trying to post this:
      "Palm was one of the 'others'". You also have to remember that the market was much smaller

    • asymco

      It depends on your definition of essentially flat. It has grown from 12.7% in Q2 2009 to 19% in Q2 2011.

      • asymco

        I should add that the market was 41 million units in Q2 2009 and 108 million in Q2 2011.

      • Ian Ollmann

        Although, it should be noted that Apple had a similar problem in the '90s. It was growing, but not as fast as the DOS/Windows PC market. Despite that limited success, when its market share got small enough, people started to write it off and the problems started. Because "nobody used it", fewer wrote software for it and only key markets continued to buy macs. At the time, the same point was made in the press that units shipped were still growing, just not as fast as the rest of the industry. Apple was growing successfully to the point of having one foot in the grave.

        iOS attracts a great deal of mindshare, especially among developers and the press, so Apple doesn't appear to have the problem today. It remains a risk, however, should marketshare get too low.

      • http://twitter.com/tommy4490 @tommy4490

        Android has the greater risk if obsolescence because of its misappropriation of IP from anyone and anywhere…

      • davel

        Add the fact that Apple makes the most profits and distributes 2.5B to the developers. I have noticed Apple makes a big deal about how much money it pays out. Most likely to address the issue you raise above

      • iosweekly

        itll keep the mindshare, as the 20% marketshare is much higher among people who actually purchase apps, and doesn't inlcude other devices running the same iOS software such as the ipod touch & ipad unit sales *which would double the market share numbers seeing as apple have virtually no competition in those device categories).

        I would go out on a limb and say that of all consumers with mobile computing devices (smartphones/tablets), that apple has 50%+ marketshare of consumers who have ever purchased or downloaded an app.

      • http://twitter.com/virg1l @virg1l

        Come on, Horace, you know very well that I compared it to Q3 2008! Just look at your last graph, you'll see clearly what I meant. I was just surprised by it, didn't realize Apple had such a high market share back then.
        And yes, I noted that the market grew, too – Apple obviously did grow in "units sold" much more than in market share.

      • KenC

        Yes of course, Q3 2008 was a launch month for the iPhone 3G, while the current iPhone 4 has been with us for over a year. Back then, the smartphone boom was nascent. so a big launch had a disproportionate effect. Just look at the first chart.

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

      Yep. Stable at ~20% market share while skimming off all of the cream!

    • KenC

      Yes, but flat when the market is growing over 50% compound growth means they are growing at least 50% compounded.

  • CndnRschr

    Has Stephen Elop opened the second envelope yet?

  • davel

    It is interesting that for all the RIMM bashing that has been going on the past few years that they have held up fairly well given the comments of how old their offerings are.

    Horace,

    I think it is time to revisit your arguments about the integrated vs modular vendors considering the market momentum as shown in these charts and what your projections/hypothesis are.

    • asymco

      I'm tracking that data. Modular has reached 50% for the first time. Will follow-up with a post.

  • iphoned

    Perhaps slightly off topic, but I am puzzled by the poor showing by Motorola given roughly same playing cards as Sam and HTC.

    • asymco

      That's a very important question. What makes an Android successful and another unsuccessful while having the same starting base?

      Will ZTE and Huawei be equally successful? If not why not? What about an Indian entrant?

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

        One reason could be that Samsung has a significant component cost advantage since they manufacture flash memory, LCD screens and processors used on mobile phones. As for HTC, in addition to the beautifully designed phones it manufactures, I think it has a Non Recurring Engineering cost advantage since it is based in Taiwan compared to Motorola which conducts Design and Development in the US.

      • http://www.noisetech-software.com/Perspectives.html Steven Noyes

        I question Samsung's dipslay business. If you look at Samsung's display business, they posted a loss blamed on TV and monitor sales. However, Samsung is doing gang-busters for handset sales; 70 million handsets each with a screen. Some screens are very small and cheap millions are top of the line OLED tech.

        I wonder if Samsung is transferring the screens internally at a loss to the handset division to allow the handset division to show a profit at the expense of the display side of the house.

        Horace, any insite into this type of internal transaction?

      • iosweekly

        perhaps its becuase Samsung offers both middle & premium positioned handsets in multiple ecosystems.

    • Christian

      Poor execution on their part, and an unwillingness to part with the past. Same problem that's plagued Nokia.

    • r00tabega

      Both HTC and Samsung got a "Nexus" model, while Moto did not (unsure of why this is the case, perhaps Google just didn't work well with Moto's management?).

      Also Moto had recently been sued by Microsoft over patents and are counter-suing. Meanwhile HTC folded and are paying Microsoft royalties per Android phone, and Samsung and Microsoft in 2007 signed a broad patent-licensing agreement.

      Finally, though the "Droid" brand started with a Moto phone, it's now used by HTC and others seemingly interchangeably (Droid is a Verizon brand, I'm sure with "payments" to Lucas).

      So Moto isn't getting love from anyone, while others are seemingly more connected. Not sure why about all this.

      • iphoned

        Given that Android is at great risk to be soon nutered by IP issues, Moto would be smart to lead with the Windows phones, scating to wehre the puck is likely to be. But then again, if theirs is an execution issue, that may not help either….

      • addicted44

        Basically, Android success depends on carriers. When Verizon favored Mot, they were doing well. The moment they fell out of favor, they got screwed. HTC is currently favored by Sprint, and partially by Verizon. Samsung is favored by Verizon, and has done a good job with their Galaxy brand. Samsung gets an additional lift from its home in South Korea, which is very well developed, and buys a lot of Samsung phones.

      • asymco

        The US (and Korea) are a tiny part of the market. It does not satisfy as an answer.

      • addicted44

        Was not trying to suggest those as answers, but rather, it was meant to be a stream of consciousness list of what differences might account for the huge variance. I am surprised, however, by the statement that the US is a tiny part of the market. Have I missed a post with geographic breakdown of smartphone sales? Is China dominating (with Huawei and the likes selling essentially feature phones running Android)?

        As of now, I have
        1) Carrier effects
        2) Home market advantage (for Samsung)

        Not sure what else should be on this list.

      • iosweekly

        How about this:

        The smartphone market was considerably smaller just 18-24 months ago when moto was doing well, so perhaps the US moto sales via the Verizon droid promotion was a huge chunk of motos overall sales. Moto failed to invest in international distribution, so when its US deal with the verizon droid launch was over then motos sales plateued while other manufacturers with international presence enjoyed continued growth.

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

      No, MMI's showing is very on-topic.

      I take it that they mistakenly tried to compete against iPad, thinking they could extend the brand. And thereby wasted serious engineering talent for a whole phone generation. Partly Google's encouragement, I'd guess. Anyway, that story is SOOO 12 months ago.

      There's news out today on a new push with inexpensive phones in China, and their stock up on it. If they can catch a toehold there, it could make for a sharp turnaround in units. But not profits. I keep wondering how they can make up losses with volume.

    • KenC

      Well, the question should be why some Android mfrs are doing relatively well and some relatively poorly.

      Samsung has an advantage as they have and existing retail channel that sells 10s of millions of feature phones that can not be switched to smartphones. Motorola was disadvantaged by its near-death experience, while HTC was not. HTC made a smooth transition from WinMo to Android.

  • Roger

    Horace, excellent graphs once again. Nothing to add other than to point out that Nokia's downward slope in the last graph would only be fun on a runner sled.

  • Anon

    Camouflage!

  • MarkG

    Horace another interesting post. 120 million smart phones sold in a world where over a billion cell phones where consumed. I believe we are in the "early innings of a very interesting game". I wonder what your thoughts are on how quickly smart phones will dominate the entire cell phone market?

    • iosweekly

      Horaces data is for quarters, not years – so there were far less than a billion total phones shipped. smartphones are already close to becoming the majority of phone sales (and already are by a very large amount from a revenue perspective.)

  • Kristian

    I love you Horace! Will you marry me?
    Your charts are so massive! ;)

    Nick:
    "what is few billion amongs the friends.."

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

    Horace, has the smartphone market reached the point where you are itching to distinguish between “barely” smart phones such as early RIMs and Symbians, versus app-heavy devices, where much of the value proposition is in an app marketplace and/or strong browser capability?

    • iosweekly

      I think your asking the wrong question.

      All phones will soon be smartphones, so the area to distinguish will be the users of those phones. tere will be a section of users who buy apps & a section who don't. A software platform's share of the "buying" users will become as important as the total share of phone sales.

      However calculating this figure will be difficult, as I doubt google is going to make public the percentage of android users who are buying apps.

      • KenC

        I think the difference and the one that might be measurable are phones with data plans and phones without. Are smartphones sold without data plans, any different than owning a feature phone and having an iPod touch on wifi? To me, the key difference in usage is having ubiquitous data.

    • asymco

      We have to live with this incoherent definition for smartphones for a while. I always preferred a definition based on how the product is used and a good proxy for that would be phones sold with data plans. Most Symbian and a large portion of Blackberries are sold without data plans(!) so one wonders what exactly makes those phones smart. But we don't have any way to measure the cross product of devices and data plans so we're stuck with a rather poor definition of these micro mobile computers.

  • r00tabega

    Glad to see Horace is listening to my comments about the pincer: http://www.asymco.com/2011/06/06/peak-rim/#IDCommhttp://www.asymco.com/2011/04/18/the-android-step

    ok, j/k, I know most of my insight is from Horace's data and interpretations anyway.

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

    Typo: The story is largely unchanged since last quarter except perhaps in the rapidity or deterioration in Nokia’s performance and Samsung’s partial exploitation of that decline.

    Should be " the rapidity of deterioration", I think.

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  • Stefano

    Horace, there is something I quite don’t understand:
    In the first graph SE and LG are shown to sell roughly as much as motorola does, but there are no traces of them in the subsecuent pie chart.
    At first I thought they were incorporated in the “others” section, but there actually is that section in the first graph too.

    • http://www.asymco.com Horace Dediu

      That chart has been updated so I can’t recall exactly how it was made. I’ll re-post an update in next few days.