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Third

Apple reached the third place rank in total units shipped during last quarter. The following chart shows the ascent in rank.

Apple achieved this with a total market share of about 9%. Second place Samsung has 22.6% so there is significantly more room to go before Apple gets to be second. Nevertheless, the climb to third was achieved in less than five years. At the time when Apple entered the market third place was held by Motorola with shipments of 35.5 million units (Q2 2007). Motorola only managed 10.5 million in the last quarter.

To see growth I prepared the following chart showing the fourth quarter’s growth by vendor according to four years’ compounded, sequential and y/y growth.[1]

On a four year compounded basis, the pattern is that of Apple, HTC and RIM showing significant growth with Samsung showing moderate growth. The other vendors all had negative real volume growth. The list does not include “Others” which had 13% compounded growth.

Projecting Apple’s 60% rate of growth and a market growth of 10% leads to Apple obtaining 27% share by the end of 2014. My guess would be that is when we’ll be able to write a post about Apple being second.

Notes:

  1. I don’t have HTC data for Q4 2007 so the compounded rate is measured for three years.
  2. Additional volume data

  • http://twitter.com/fumjusta fumjusta

    What’s the implication from mobile operator point of view?

  • http://twitter.com/PaulMaxime Paul Franceus

    Question: what’s Nokia ex-SP and Nokia SP?

    Never mind – SmartPhone.

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

      Smartphones and all phones excluding smartphones.

  • formasymphonic

    Would be very interesting to see implications of handset ASP on these positions or shipments to perhaps add a context on how much they are actually “worth” (no sure how it could be conveyed aesthetically however)

  • Anonymous

    Three things are clear to see from this chart:
    1. The advantage Samsung has in the smartphone arena. It has a huge installed base of customers to sell its Android phones to.
    2. The reason Microsoft has tied its mobile phone fortunes to Nokia, which has an even huger installed base of customers.
    3. The need for Apple to pull out all the stops on production and distribution.

    • Anonymous

      These charts are for ALL mobile phones (including “feature” phones, a.k.a “dumbphones”) sold worldwide. They are not for smartphone sales.

      Apple is currently #1 in smartphone sales worldwide. Samsung is in the #2 position.

      Since smartphones are currently in the minority of all mobile phones sold (but that sector is growing), and Apple only makes the iPhone (which is a smartphone), Apple is doing very well by being #3 in sales of ALL phones.

      • Anonymous

        You missed my admittedly vague point. Samsung is the top selling vendor of Android phones. Why? Because they have a huge portion of the cellphone market. Why does that matter? Because (1) they have a huge distribution network in place, (2) a huge ability to ramp production in place, and (3) a huge customer database to flip from cellphone to smartphone.

        Apple has had to build all these literally from scratch. No duh “Apple is doing very well”! However, the real battle has yet to begin. Nokia has everything in place that Samsung has, and is going to be supporting the Microsoft gambit. Two to three years from now, Microsoft may well have caught up with Samsung.

        And that’s when the real battle begins.

      • simon

        I’m not sure if Nokia has everything that Samsung has. Samsung has a very loyal domestic market in South Korea that buys the latest Samsung in droves, and unlike Nokia Samsung has a pretty sizeable distribution and reputation in the North American market in addition to a pretty solid European relations. Nokia’s still the king of quantity but Samsung seems to be ahead where the money is big.

      • simon

        I also forgot to mention Samsung’s advantage of vertical integration. Whatever Nokia does through hardware, Samsung will be able to match it with even better specs. 

        Also it goes without saying that if Nokia’s designs gains some serious market traction, Samsung will shamelessly mimic the design concept in their own style. This has always been Samsung’s philosophy of playing a “Fast follower” with a heavy slant toward outperforming the competition with better specs and aggressive pricing.

      • Anonymous

        “This has always been Samsung’s philosophy of playing a “Fast follower” with a heavy slant toward outperforming the competition with better specs and aggressive pricing.”

        And people wonder why Apple is so aggressive in defending themselves with the patent lawsuits?

        Blatantly ripping off others designs and profiting from not having to expend the R&D for them yourself is not “outperforming” – it’s theft.

      • Sacto_Joe

        You make some very good points, especially concerning Samsung’s hardware integration advantage. However, Nokia does have a massive distribution network worldwide, is tied in to massive production capacity, and has a massive number of existing customers. My point was simply that, assuming Metro is successful, Nokia is in a position to grow its smartphone market very, very quickly. Will it happen? As I said to Jurassic, time will tell.

      • simon

        That’s something I’m interested to know. Is having a wide range of international distribution better than dominating the few markets that buy your most expensive devices?  My armchair theory is that Nokia’s advantage isn’t really that big because they are fool’s gold. 

        For example Apple’s average selling price is over $600 because they dominate the USA market who is willing to buy the expensive ones. In the last quarter LG turned in a profit despite selling less phones because Koreans bought a lot more of their latest LTE 720p phones. Samsung made a lot of money from selling the most expensive Galaxy phones in Korea. 

        A contrasting example would be RIM. They are very popular outside Canada but their growth is seen mostly in developing countries like Indonesia and Thailand. There’s nothing wrong with having the international presence but when you lose share in a lucrative market and try to replace it with a lower margin one, it becomes an uphill battle. 

        More worrisome for Nokia is that as some of these countries get more affluent and sophisticated in their buying pattern, they tend to jump to the products with superior perceived brand value. China is a good example where Nokia has been doing well for some time but now every middle class citizen thinks Apple and iPhone is the truly “in” product now. When you give up so much on the pricing, I’d think it becomes really difficult to keep up the profit.

      • http://profiles.google.com/sivaram.velauthapillai Sivaram Velauthapillai

        Usually the premium product has a greater threat of margin compression than the low-end product. In this case, although I have under-estimate the iPhone for a long time, the iPhone is more likely to see its price and profitability fall than the phones selling closer to the feature-phone price.

        At the low end–the feature-phone price point–it usually comes down to economies of scale. Whoever that has the largest volume, and the lowest cost of production, usually wins. Margin are thin but scale makes up for it.

        The question is whether Nokia or Samsung or someone like that can get enough volume to capture the mass global market, which is likely closer to the current feature-phone price point (say $100).

      • Anonymous

        Nokia is the king of cheap feature phones… but it has fallen way behind in the smartphone market.

        At one time Nokia and RIM were kings of the fledgling smartphone market, but now they are both footnotes to history.

        Smartphones as a portion of all mobile phone sales has been growing consistently, while sales of feature phones have been dropping consistently.

        Currently, Microsoft’s Windows Phone OS has less than 1% of all smartphone sales. They are spending billions of dollars to have Nokia include their unpopular mobile OS on Nokia’s unpopular smartphones.

        Two turkeys do not make an eagle. ;-)

      • Sacto_Joe

        Great line!

        I’m not going to count out the Metro interface just yet. It’s pretty much the last chance for both Microsoft and Nokia. It is literally do or die for them. My point is that on paper this partnership looks capable of catching up. Will they? Time will tell.

      • Anonymous

        “Samsung is the top selling vendor of Android phones. Why? Because they have a huge portion of the cellphone market.”

        Samsung is “on top” in smartphones because of their volume in feature phones?  If that correlation was relevant than Nokia and Motorola would be in better position than Samsung.

        How about this as an alternative – Samsung was propelled by Verizon with the Droid campaign before Verizon got the iPhone? 

        “Why does that matter? Because (1) they have a huge distribution network in place,”

        Apple doesn’t have the same?  Last time I checked phones are different from just about any other consumer electronic device in that they are pushed by the carriers.  Who are falling over themselves to carry the iPhone. 

        And I think Apple has an advantage over Samsung distribution with the Apple stores – something Samsung (and others) are learning painfully in the tablet space – that combined with their offerings being crap compared to the iPad doesn’t help them either!

        “(2) a huge ability to ramp production in place”

        Again, Apple seems to be getting this under control – the weeks to wait for an iPhone 4S dropped faster than any previous iPhone launch, despite record breaking sales.

        Samsung has been great at stuffing the channel – I think it’s more than telling they only talk about shipped, not sold.

        “and (3) a huge customer database to flip from cellphone to smartphone.”

        Customers have shown they aren’t even sticky for Android vs. iOS, having no problem switching as they did when Verizon got the iPhone.  That a potential smart phone customer has a Samsung feature phone means absolutely nothing.  I know of NO ONE, including myself in the heyday of feature phones, who cared that much about the manufacturer.  In the heyday of feature phones, if you cared about any manufacturer at all it was either Motorola or Nokia, certainly NOT Samsung.

        If you really think your points are valid then you might want to hang on – your in for a bumpy ride!

  • davel

    This is incredible given the small number of models sold as well as the premium property of its phones where its competition has a broader price range.

  • Anonymous

    I think Horace’s latest data comes from IDC’s Q4 2011 report.

    Looking at the IDC data its is striking just how fast Apple is growing its market share, far faster than any of the competition.

    For the full year 2011, the iPhone grew its total global mobile phone market share from 3.4% (47.5 m units) in 2010 to 6.0% (93.2 m units) in 2011, unit sales growth of 96.2% YonY.

    Much has been made of Samsung’s surge of sales growth this year, but it almost pales into insignificance compared to Apple’s. For the full year 2011, the Samsung grew its total global mobile phone market share from 20.1% (280.2 m units) in 2010 to 21.3% (329.4% m units) in 2011, unit sales growth growth of just 17.6% YonY (i.e. less than a fifth of Apple’s units growth).

    Note the above figures for Samsung are all types of mobile phones, whereas Apple only sells smartphones. Samsung has claimed until this last quarter that they had overtaken Apple in smartphone sales. However, in the last quarter iPhone sales surged 128% YonY, with 37 m units, overtaking Samsung’s alleged smartphone sales.

    However, Samsung are very coy about their smartphone sales, referring only to “shipments” and refusing to give numbers! (A bit like Amazon with the Kindle Fire). Also, as as the world’s second largest mobile phone maker (allegedly) we do  to know which phones Samsung considers smartphones and which feature phones. Without them giving any numbers for anything it easy for them to re-categorize their phones from feature to smart, to suit their purposes. Certainly, another conclusion appears to be that as their alleged smartphone sales have grown, so their non-smartphone sales have shrunk?

    However what is absolutely clear is that Apple is enjoying a huge surge in iPhone sales gaining 8.7% global market mobile phone share this last quarter, from 4% in the same quarter last year!

    It will be interesting to see what happens this quarter when China kicks in!

    This is the link to the IDC report:

    http://www.idc.com/getdoc.jsp?containerId=prUS23297412

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

      The only data I got from IDC was the estimate for ZTE’s total shipments.

      • Anonymous

        Interesting. What were your sources? 

        Anyway, IDC data appears to fully support and endorse your charts.

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

        Company reports.

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  • Tim F.

    What I find most dramatic is the “platform wars” are almost reaching the point of a device manufacturer war (+ a large “other” piece of pie).

    If the bulk of quality and quantity Android shipments are coming exclusively from Samsung: it completely disrupts the argument of Android’s inevitable dominance. It becomes 3 major manufacturers (with only ZTE and Huawei having a chance to break out) each representing a different platform (and as smartphones replace feature phones, it’s easy to see how their shares will grow towards each other). And, in that case, it’s difficult to ignore that Apple is achieving ~60% of all profit in the market. 

    • http://profiles.yahoo.com/u/IWQ7HIPZ4UJ5YWJB7JSYZ7QXKM watchdog

      UBS calculating that it’s now grown to 74% EBIT, on 36% revenue, on 9% of units sold.  Samsung at about 16-17% EBIT, leaving 9-10% EBIT for all other cellphone makers combined.

      • Tim F.

        I just saw that a couple of hours ago after posting as well. Incredible.

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

        That sounds about right. I’ll publish my own estimates after LG reports.

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

      Concentration of distributor power implies a very different value chain than that in the PC market. You might well ask why power concentrates in the distribution. The answer follows from the power of operators and the regulated nature of the market. Google conceded this early on by conforming to operator requirements in order to gain design wins.

      • Tim F.

        Agreed. If only the “it’s Mac vs. Windows all over again” people could figure that out.

  • http://www.facebook.com/people/Mala-Dofu/726976157 Mala Dofu

    Interesting. However, the data seems a bit biased towards Apple since the statistics start with them introducing their first phone. It’s pretty obvious there is going to be a lot of growth if you start from scratch… Nokia, RIM, etc were already selling loads of handsets four years ago, and to expect them to demonstrate the same level of growth in percent is not realistic.

    I wouldn’t dismiss Nokia and WP just yet. Much of the iphone’s impressive growth is generated in the English speaking world (and some of Western Europe), and the iphones are much less popular in Asia (barely sell in places like South Korea). The real question is what the Chinese will start buying (and perhaps India).

    Currently, it’s looking pretty good for Android in China, but if MS can get some of the Chinese manufacturers (Lenovo, Huawei, ZTE, …) on board, they might be able to break into this huge market (something like 800M mobile phones in China and not (yet) a huge number of those are smartphones…). RIM doesn’t have a prayer with their subscription service, and the Chinese won’t like the iphone’s closed iOS either. Any such technical restrictions are very un-Chinese in their philosophy, and the Chinese really want to freely be able to install any unsigned third-party apps for their hugely popluar QQ, Baidu, RenRen, etc. Apple has always been a champion of defending copyright, and the Chinese consumers have absolutely no understanding for this philosophy. They find it annoying and stupid. 99.9% of the Chinese have never bought a legal piece of software in their lives, and they have no intentions of starting to buy apps from some stupid app store. They want to download their apps for free from Chinese websites.

    Also, the iphone is working very well in conjunction with Macintosh computers, but Windows is completely dominant in the PC market in China (I presume the WP works well in a Windows environment). Finally (and this might be the decisive point), the Chinese are very nationalistic consumers nowadays, and they really have no interest in supporting Apple if there is a decent Chinese alternative. Apple can’t expect to profit from a hype in the same way as it is elsewhere (the only country the Chinese currently like less than America is Japan, and they don’t exactly love Korea either…). This new-born nationalism won’t hurt MS, because the Chinese still don’t view software, or an operating system, as a real product. It’s just there… They consider a Lenovo desktop with Windows XP a 100% Chinese… In other words, if MS can convince e.g. Huawei to make a decent “Chinese” MS phone (which also would receive support by the Chinese goverment), and put together a few strong Chinese apps working with the Chinese social media sites, MS has a great opportunity of becoming a major player in the biggest on the planet.

     

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

      Sadly for you, when Apple is taking in (my estimate so far) 76% of all the profits in the mobile handset industry, most data in the area of cell phones has a strong Apple bias.  You don’t have to look for it because it is just there.  In 4.5 years, they have gone from 0% of the profit to about 3/4 of the profit world wide for all handset sales.  They have done this by creating an entire system that is far superior to any of the competition.

      Likewise, I question your view of various demographics and find it funny you judge all of Asia by a single country, South Korea.  For example, if we take this single statement:

      “Much of the iphone’s impressive growth is generated in the English speaking world (and some of Western Europe), and the iphones are much less popular in Asia (barely sell in places like South Korea).”

      You would assume that analytic companies like Net Applications Share and StatCounter would show dismally for iOS in South America and Asia when it comes to web usage stats.  So lets take a look at the two most popular mobile OSes for Dec 2011.

      North America: iOS – 65%, Android – 28%
      South America: iOS – 45%, BBOS – 23%
      Europe: iOS – 75%, Android – 17%
      Africa: Java ME (Feature phones) 75%, iOS – 10%
      Asia: iOS – 55%, JavaME (Feature pones) – 19%
      Australia: iOS – 85%, Android – 12%

      In China, BTW, iOS represents 60% of all mobile traffic.

      Not a bad showing for iOS in Asia.  55% of mobile web traffic is driven by iOS.  Only in Africa is iOS in second place.  Now lets look at another simple statement:

      “The real question is what the Chinese will start buying (and perhaps India)”
      http://www.pocket-lint.com/news/43984/apple-iphone-4s-china-sales

      http://cdn.pocket-lint.com/images/DKJK/apple-iphone-4s-china-sales-0.jpg?20120115-131138

      http://gadjade.com/2012/01/people-rumble-in-china-for-iphone-4s

      You should have seen the iPhone 4 launch.  Apple is doing very very well in China.

      OK, India is not doing too well for Apple but they have no retail presence there.

      The rest of your post is about as far off base as that one paragraph.

    • http://profiles.yahoo.com/u/IWQ7HIPZ4UJ5YWJB7JSYZ7QXKM watchdog

      ” the data seems a bit biased towards Apple since the statistics start with them introducing their first phone. It’s pretty obvious there is going to be a lot of growth if you start from scratch… Nokia, RIM, etc were already selling loads of handsets four years ago”

      Nokia sold 437m phones in 2007, RIM 11m, Apple 4m, and HTC 10m. All of the larger vendors except Samsung had negative 4yr CAGR.  I really don’t see the bias.

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

      Growth in China is one of Apple’s most celebrated recent successes. To read more try searching “apple growth in china” with your favorite search engine.

  • berult

    Re: Mala Dofu on South Korea vs Apple

    South Korea could sue Apple for infringing on its patently ‘inside-trading’ economy. And Apple could counter sue on the ground of unfair national business practices. South Korea appealing to the South Korean High Court and to the Court of South Korean public opinion; Apple …to the WTO and to the world public opinion. Both would carry an ‘unfair’ probability of gaining the favor of their respective courts of choice.

    Apple plays right into the age old defensive stance of the Korean psyche. That frame of mind translates into ‘affirmative action’ reflexes from Korean consumers toward their national ‘flag-brand bearers’. Apple ….the potent invasive brand… thus stands out as a sort of persona non grata in the Korean economic landscape.

    I make no distinctions between North and South Korea, for they are starkly contrasting variations on a single, unifying theme:  a  fortress-like and inward-looking trait of character, a siege mentality, some epilogue to being historically and systematically preyed upon by powerful bordering nation states. Korea’s character has been forged into a ruthless competitive compact by its constant struggle to safeguard their independence against unneighborly hegemony.

    An Apple product cannot be judged on its own merit in Korea. The value it could add to Korea’s well-being would have to be subtracted off Korean’s sense of self-worth.The collective psyche, actionable through its institutional framework, just couldn’t be comfortable with Apple’s bullying creativity. It’ll certainly be  interesting to witness the reactions to Siri eventually answering Korean queries, and addressing Korean’s problems in the Koreans’ native language. In fact …doing it more effectively than the local AI algorithms in all likelihood could …at least in the foreseeable future.

    Will that be enough to overcome deep seated suspicions and deeply embedded fears toward external interference, however benevolent one manifestation of it may profess to be?

    Could creeping ‘Siri-chaperoned’ familiarity ensconce a courtship of  rationales, ..or breed reflexive, ‘peninsular’ contempt ?

  • http://pulse.yahoo.com/_5BHLNE6HC75ETNMNDKEEKLMF3M Steve Pederson

    Anecdotally, here in San Diego “in the wild”, the change over the last few months is stunning. Android to iPhone seemed close to 1:1, now it seems to be at least 3:1 iPhone. (I’m a developer… I can’t look at a phone and not try to identify its OS.) The selection bias here, btw, is phones that are reaching their mobile potential–out and being used rather than sitting in a pocket or purse.

    Just as I feared the Android momentum might be unstoppable, something happened. Because looking around me it doesn’t look like “iphone is winning” it looks like “iPhone won.”

    And it’s real momentum considering that anyone not yet using a smart phone is a late adopter and will be swayed by what they see others using.

    Now I realize that the US operator subsidized market is not the world. But a seismic shift seems to have happened here. Bigger than the numbers. I wonder what percentage of Android phones are replacing feature phones for people without the budget for a data plan.