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400 million phones per quarter and everything's topsy turvy

Sony Ericsson is no more. The company remains but the brand is gone. Now the phones it makes will be sold under the Sony name. Unfortunately, that means we no longer get reports from the company on its volumes, profitability and sales. The units will be part of “Other” from now on.

That vendor’s data disappears as did HTC’s and Samsung’s earlier reporting. Bit by bit, vendors are withdrawing information. RIM stopped reporting its average selling prices some time ago, Motorola may disappear completely and they already stopped reporting tablet sales.

This makes the picture of the market fuzzier each quarter. We have to rely more and more on analysts who publish estimates. I try to pick from the available data the best assumptions but the errors are undoubtedly increasing. Here are the charts showing unit volumes in terms of absolute, share and ranking.

As I wrote previously, Samsung has overtaken Nokia which lost the top spot in unit shipment ranking, a spot it held for 14 years.

Of all the participants, only three brands enjoyed growth this last quarter: Apple, Samsung and ZTE. ZTE, like Apple, is noteworthy for its late entry. The others are in a mess: Motorola -4%, Nokia -24%, RIM -26%, HTC -29%, LG -44% in terms of unit growth y/y. This, while the market managed a modest gain.

It still find it fascinating that such a large market, selling 400 million units every quarter can exhibit such rapid change in participant ranking.

  • http://www.intomobile.com/ Stefan Constantinescu

    What about Huawei? Aren’t they even larger than ZTE?

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

      If you have shipment data for Huawei, I’ll add it.

      • http://www.intomobile.com/ Stefan Constantinescu
      • http://www.asymco.com Horace Dediu

        That would be smartphones. This data is all phones.

      • Sachin

         55 million in 2011 according to their annual report,

        “The overall annual shipment totaled
        nearly 150 million units, including 55 million mobile
        phones, resulting in an increase of 30% year-on-year.
        Huawei had China’s leading market share of CDMA
        smartphones. Smartphone shipments rapidly increased,
        with Huawei shipping nearly 20 million smartphones, an
        increase of over 500% year-on-year.”

        http://www.huawei.com/ucmf/groups/public/documents/attachments/hw_126991.pdf

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

        The data needed is for each quarter.

      • http://twitter.com/Niilolainen Niilo

         iSuppli has it, but latest quarter is Q4/2011 (14M), it will take them until early June to publish Q1/2012

      • Ericlee2011

        8 smartphones shipped for q1 2012, ranking 5th, ahead of htc

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

        I have an estimate for smartphones. The data needed is for all phone shipments.

      • http://twitter.com/Niilolainen Niilo

        Can you source that?

  • OJHB

    Motorola and HTC are mixed up on the right hand side of the second chart. ie. HTC is last and Motorola second to last.

    Otherwise, excellent analysis and agreed that the rapid change in rankings is fascinating to watch. The pace of innovation outstrips pretty much any other market I’ve ever seen. 

  • http://twitter.com/tsahil Tsahi Levent-Levi

    Horace,
    I think the ranking graph has the labels wrong for HTC and Motorola somehow…

  • http://twitter.com/miusuario Omar Moya

    “Others” is really doing great. Is it possible to get a breakdown?

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

      You could probably purchase that information from a few analysts.

  • Mark Newton

    Horace, I think there is a labeling error in your third graph. Motorola on the left axis, maps to HTC on the right axis.

    • http://pulse.yahoo.com/_PPN3OZY3PSAT6IFPI3EKT4S63Y Samuel

      (Double post due to commenting system auth weirdness)

    • http://pulse.yahoo.com/_PPN3OZY3PSAT6IFPI3EKT4S63Y Samuel

       That was then.  This is now.

  • TS

    Who makes up the ‘Other’ in the first 2 graphs? They seem to have a significant chunk of share. 

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

      About 3000 Chinese and Indian companies.

      • http://twitter.com/Niilolainen Niilo

         iSuppli actually has the grey market shrinking in recent quarters. One of the big names in ‘others’ is TCL-Alcatel who are emerging from the pack

  • poke

    Last year everybody was talking about a two horse race between Apple and Google. Now it seems obvious it’s really between Apple and Samsung. It’ll be interesting to see how this shapes up over the course of the year. Especially whether Samsung will move to take greater control of Android.

    • ChKen

      Don’t discount ZTE and Huawei pinching Samsung from the bottom!

  • kankerot

    Why have you put Huawei in with the “others” they and ZTE will be the ones growing their volumes and sales.

    • ChKen

      Presumably, there is no reliable data.

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

      Do you have number for Huawei’s volumes during the quarter?

    • http://twitter.com/Niilolainen Niilo

       Agree with the sentiment, but those guys are not particularly transparent. They don’t give quarterly results (rather six monthly) and even then are not very open about unit shipments, so you’re reliant on analyst estimates, press reports and (the horror!) DigiTimes…

  • Matthias Neeracher

    One interesting phenomenon in 2010 and 2011 is how the “Others” category notably shrinks in Q4, and then rebounds in Q1 again. Apple is well known for having a positive “Holiday Quarter” effect, and it appears like Nokia and Motorola have positive Holiday Quarters as well. Samsung, on the other hand, seems to sell slightly LESS in Q4 than in the surrounding quarters. It seems that some of the “Other” brands have highly negative “Holiday Quarter” effects.

    • http://wmilliken.livejournal.com/ Walter Milliken

      Looking at the first chart, I would guess “Other” had a very good Chinese New Year quarter this year, anyway.

  • r.d

    Horace,

    regarding Samsung.
    Q4 $16.8 Billion (mobile division) with 100 million phones estimate.
    Q4 $2.3 Billion in profit (mobile division)

    Q1 $16.7 Billion (mobile division) with 93.8 million phones estimate.

    It seems strange that their smartphone #s went up huge in Q1.
    yet their revenue didn’t increase. obviously they didn’t report profit
    to obscure their profitability even more.

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

      With my estimates I did notice a large increase in the average selling price from $142 to $162 to $179 over three quarters. This is quite an achievement. (I did not estimate 100 million in Q4 but 95).

      • r.d

        ok.  if there is 10 million more smartphone from previous quarter then
        ASP rises but revenues for that division should also rise just as much.
        so 100 million doesn’t really matter, if it is less discrepancy is even greater.

      • KirkBurgess

        I think that samsung is not so much adding to total shipments with the increase in smartphones, but converting feature phone unit sales to smartphone unit sales (something Nokia failed to do). So Samsungs smartphone sales will continue to increase, but its dumb/feature phones sales are decreasing by the same amount or more, meaning their total handset sales are actually static or falling.

  • Westechm

    I think there is something fishy about Samsung’s numbers.  As you point out they no longer report them and you have to rely on other analysts.  The increase in units sold from Q4, 2020 to Q1, 2012 is hard to believe.  

    According to Joe Wilcox, Beta News,
    “Strategy Analytics puts Samsung’s Q1 smartphone shipment at 44.5 million, compared to Apple’s 35.1 million, IHS says 32 million for the South Korean electronics giant. IDC’s number is way closer to Strategy Analytics, but not as high: 42.2 million.”

    I suspect that IHS is closer to the truth.
    Even though Apple is soaking up the lion’s share of the profits, Samsung is making enough money to prevent them from going the was of SE, Nokia and Rimm, IMHO.   

    I believe that Apple eventually will end up with 50% (units) of the smart phone market, Samsung with 25 to 30%, and the rest divided by the also-rans…at least until the next disruptive force comes around.

    • http://wmilliken.livejournal.com/ Walter Milliken

      I would expect Apple to try to maintain its profit share, rather than unit share, of the market. I’m not sure this will rise to as high as 50% of the units, since I expect a lot of the unit count will be in the low-end, low-profit devices. I suspect that Samsung is making a lot of its profits off their higher-end devices that sell to people who specifically don’t want Apple, or where Apple doesn’t currently reach (e.g. China Mobile, T-Mobile).

      Where Samsung competes on the low end, they may have problems with ZTE, Huawei etc. unless they come up with an ecosystem that advantages them, especially in China. If it’s just “cheap smartphones” that sell, it’s not clear that they can otherwise maintain an advantage unless they somehow become the “poor man’s iconic brand” in China, which I suppose is possible.

      • Westechm

        When i talk about unit market share I mean fifty per cent of the units in the smart phone market segment.  The line between smart phones and other phones is hard to define.  I recently met a woman who bragged to me about her new Samsung smart phone, variety unknown.  It clearly was not a smart phone in my opinion.

        I agree with you about Samsung’s position in the low end business.  They would have to work very hard to lower their manufacturing costs.  I believe that the Chinese still have lower labor costs than the Koreans.  Yes, Samsung could manufacture in China (if they don’t however) but I doubt that it is worth the effort to compete at the low end of the market.

  • Walt French

    I think we’re all intensely interested in this type of information, so your pulling it together is a service.

    I look forward to seeing this data go into your sausage grinder for some of your provocative analyses.

    The sharp change in revenues, units (and therefore ASP) are good signals as to the vendors’ ability to compete. We already have the three big stories there: that RIM is in danger of disappearing inside of 12 months, that Nokia needs to find some huge numbers in Windows—quickly!— and that Samsung & Apple are operating like well-oiled machines. The quarterly data is fuzzy, but mostly confirmatory.

    But the profits numbers seem a bit disconnected. You’ve already discussed how the carriers’ interests are not represented in just looking at handsets, and touched on how profitable or growth-oriented Google will be; how much they can/should afford to invest in their (BCG-definition “problem child”) business. Currently, Apple’s business is self-funding, while everything except Android is dying. Can Android become profitable enough that the current consortium approach can work?

    Seems to me that the $64K question is whether Samsung’s interests would be better-served by its OWN fork of Android or perhaps a robust platform entirely of its own. Maybe that question is too dependent on Google’s choice of direction, but it sure seems as if Samsung is hedging its bets with Tizen, Android and now WP.

  • Robert H. Frank

    One of the most important factors to consider in thinking about the smartphone market is how it will be affected by events in the tablet market.  

    iPad sales have grown explosively for the past two years and, if anything, are still accelerating.  The highly fragmented Android tablet platform shows no sign of mounting a serious challenge in this space.  Windows tablets are coming, but even if they’re well received, they’ll be playing catch-up for a while.  So it’s safe to assume that most of hundreds of millions of new tablet buyers in the next several years will have chosen iPads. And consumer satisfaction surveys suggest that they’ll quickly become enthusiastic about them.  Most will be favorably impressed with apps, the Apple user experience, etc.

    Now consider the people in this group who currently use an Android phone or a feature phone.  When their current phone contracts expire, what will they do?  With Apple having shown its willingness to compete at lower price points with discounted earlier models of the iPhone, they’ll face a compelling choice. They could either renew; or for essentially the same money, they could switch to an iPhone that incorporates the same operating system and formidable ecosystem they’ve come to value with their iPads.  An easy choice, it would seem.  Given the obvious advantages of platform sharing, why would anyone want his smartphone to be on a different platform from his tablet if price weren’t an issue?

    Bottom line: As Apple continues to ramp up its capacity to produce iPhones, it should face easy pickings among iPad owners whose Android or feature phone contracts are about to expire.

  • http://riskinit.com jriskin

    Any chance you’re working on numbers like this for individual markets? I would imagine that within specific markets the picture is quite different. Especially on the smartphone vs. feature phone front. In some of the more mature markets it ‘feels’ like they aren’t selling anything EXCEPT smartphones. Being selfish I’d love to see USA numbers :)

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

      I would work on such numbers if they were published by the companies involved. All data I publish is public data and I don’t publish, nor accept to look at, non-public data.

  • Matt Ryall

    Horace, in your ranking chart, line that starts as Motorola on the left ends up as HTC on the right. It looks like you’ve mixed up the labels on the RHS.