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How many Lumia phones were shipped in the US?

The US is a crucial market for both Nokia and Microsoft’s strategies. This importance was highlighted during the launch at CES in January when not one but three CEOs (Microsoft’s Steve Ballmer, Nokia’s  Stephen Elop, and AT&T’s Ralph de la Vega) were on stage to launch the Lumia. Knowing how well this strategy is working would be very useful to understanding how this market behaves.

My first take on this was when I asked the question How many Lumia phones were sold in the US? The answer suggested through the combination of survey data from Nielsen and comScore[1] was 330,000. The figure is quite small compared to expectations. As it’s so extraordinary, it should be supported by good evidence. Unfortunately the methodology used is weak. The figure itself is probably close to the margin of error of such sampling techniques. It would be nice to have another way to calculate this.

Today Nokia offered another set of data which might help determine how many Lumia phones were shipped in the US. (Note the shipped versus sold distinction. Companies report shipments while surveys nominally measure consumption or usage.)

Unfortunately, Nokia did not offer specific data on US shipments. What they did offer was:

  • Global Lumia shipments were 4 million in the last quarter
  • Global average selling price was €186 for a Lumia phone
  • North American[2] phone shipments were 600k. This includes all phone types and all operating systems.
  • North American sales were €128 million.

That’s all we have. So how can this help with the question of US shipments?

As often happens, it helps to look at the data historically. The following charts show North American shipments and sales with the Lumia launch date highlighted.

While unit shipments were flat, revenues increased significantly. This suggests that we could plot the average selling price of phones in North America (NA) specifically. I did that in the following chart:

Here the effect of Lumia is clear. The average revenue per phone in the US (blue line) jumped dramatically after the launch. So much so that it actually overtook the average global ASP for Lumia.

What we need therefore is a way to estimate the “mix” or percent of smart and non-smart phones sold into North America and derive perhaps the US portion of that and then finally try to separate the Lumia from all the smart volumes.

To help, I plotted the historic ASP for Smart and non-Smart devices as provided by the company.

Using a simple formula[3] it’s possible to derive the mix which is shown as Green and Blue lines in the following chart.

Getting estimates for smartphone shipments (blue line) is pretty close to Lumia shipments, but we still have to correct for US/Canada split (estimated at 90:10) and Symbian/WP split among smartphones (estimated 50:50 in Q1 and 20:80 in Q2).

The result is the red line showing US Lumia shipments. The sum of the two quarters then comes to 630k.

This is nearly twice the estimate from consumer survey data however I would not draw too many conclusions from this. Mainly because there are many assumptions place in both estimates, but also because there is the distinction between shipments and usage.

However, it might be safe to say that US install base is somewhere between 400k and 1 million users. Is this good or bad?

It’s good because it’s progress and there is some growth. It’s bad because it’s frightfully small relative to the competition. Nokia itself acknowledges the challenge and states that “We believe the Windows Phone 8 launch will be an important catalyst for Lumia.”

It seems that what Nokia needs most today is time. That is a very expensive asset. Perhaps infinitely so.

Notes:

  1. A practice neither company would condone, principally because they are competitors, but also because they use different sampling methods.
  2. North America I take to mean US and Canada. Although geographically, Mexico is part of North America it’s usually grouped as part of Latin America as a category. I’d like to get this confirmed.
  3. There are a few implicit and explicit assumptions: (a) Global ASPs are roughly comparable with NA ASPs but (b) smartphone ASPs are higher in NA by about 30%
  • Canucker

    Data is power. Why is Samsung so circumspect (nigh disingenuous)? Do they feel these data would empower their competitors? Do they prefer third party estimates that wildly vary? While the Nokia numbers do need assumptions, at least there are triangulation points. Clearly, they are unhappy with the performance but it’s also remarkable that the trend is up given the OS obsolescence. We tend to forget most people are not clued in and buy on impulse or simply don’t care (this also explains the lack of action on Android upgradeability – if it was negatively affecting sales, something would be done). The price cut to the Lumia 900 also suggests sell-thru is an issue. SInce Nokia says they will continue to market and sell WP7 devices after the launch of WP8, one can assume they don’t consider excess Lumia 900 inventory as land-fill.

  • mark212

    in Mexico, norteamericano is the way to differentiate people from the US from people from other parts of the Americas, so I think you’re on safe ground considering North America to be US and Canada. (“No, you’re not an American; we’re all Americans. You’re a norteamericano, bro.”)

    • kaelef

      Of course, norteamericano is inaccurate also.

      • r.d

        would you prefer gringo or yankees.

      • kaelef

        yankees sounds funnier in spanglish.

      • MarkS2002

        Bingo! Having just retired to Mexico from Canada and now having lived in all three countries, it seems pretty

    • XavierItzmann

      The only thing that matters is how Nokia defines their NA territory.

      With regard to Mexicans, the definition you cite is completely screwy. Mexico is as North American as Canada is. Maybe they all failed their Geography classes, or something.

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

    Although Windows Phone 8 should make life easier for developers, it won’t, by itself, bring any improvements to the UI or the phone’s capabilities. WP8 is a long-term bet. Nokia will have to be able to survive for a while at the bottom of the marketplace until any benefits from WP8 bubble their way up to the surface. (Ha! Get it?? SURFACE!!)

  • xynta_man

    Damn, that’s a really small number – I thought they would at least hit a million of shipped Lumias in US for the quarter, let alone North America. A million Lumias would still be very small number, but at least it could’ve been considered as a some kind of milestone.

    With the recent financial results (1 billion dollars of operational loss anyone?) it looks like soon Nokia won’t be able to exist in the same capacity – they need some kind of a drastic change to significantly lower the operational costs, just to stay afloat and get more time.

    Personally, I’m skeptical that Windows Phone 8 will change anything to a such degree that Lumia sales will go thru the roof overnight – why should it? The current line of Lumias weren’t that bad of a phone, even without certain specs, features of apps – there are millions of crappy Android phones, that are far worse than these Lumias (super-low-end specs, crappy quality, etc), yet they sell, while Lumias don’t.

    I think the main problem is the Metro UI of Windows Phone 7, which isn’t something that most regular people (outside of the techblog space) like or understand. Microsoft can be commended for making something new and unique and not “copying” the iPhone like Android, but if consumers don’t go for it, than it doesn’t matter. If the main differentiator of the their mobile platform is a road-block to its success than Microsoft could face a terrible situation with Windows 8 on the desktop, since it tries to push the Metro UI down the throat of all of its users.

    Sure, Windows 8 will sell (since it’s basically the only option for new PCs), but the the resistance will be hard (we could see the Vista situation, but far worse), resulting in more and more users (both private and corporate) looking other way, be it either Macs, iOS devices, Android devices or even Linux. Most of them won’t go away and will just stay on Windows 7 for as long as it will be possible, but some of them will go away and that will be a big problem for Microsoft.

  • http://twitter.com/ChristianPeel Christian Peel

    It looks to me like we can call the smartphone war; Apple won. MS, Nokia, Google, etc… will continue to fight, but they will only gain marginal market share. I’d love for MS+Nokia to produce a great platform, but it seems like they’re skating to where the puck is, not where it will be. The are trying to bring a better product into an established market when they should be either bringing in a low-end product or creating a new market.

    • xynta_man

      I wouldn’t call the war over yet – the market is still far from saturation, especially in developing countries, plus the whole rapid upgrade cycle (only ~2 years for most people) also can lead to fast changes on the map.

      Apple can indeed still move “down”, e.g. making the 3GS for another year, while lowering the price even more to gain more penetration (and profits, of course) in developing countries. At the same time companies like ZTE and Huawei can force themselves into the developed markets, e.g. establishing a separate “premium” brand to work in Europe and US, like the japanese car companies did, while utilizing their supply chain. They could very well be “Samsung killers” in 2-3 years.

      • http://twitter.com/ChristianPeel Christian Peel

        I could have been more clear; I also wouldn’t say that smartphone war is over, just that it looks to me like Apple will win.

      • Walt French

        Unlike Apple’s stated intent not to leave a “price umbrella” under the iPad, there are hundreds of dollars separating iPhones from others. And since half the sales in the US, more globally, go to feature phones, obviously a not-as-good-as-iPhone phone is quite attractive at the lesser price. See Ben Evans’ recent work here.

      • xynta_man

        To be fair, it also should be noted that while those cheap Android smartphones do sell well worldwide, there’s basically no money made from them – not really a “winning” business strategy, from my point of view.

        And, as I said earlier, I think Apple can expand the iPhone even more into low-end, without making “new” low-end devices, i.e. by expanding the iPhone portfolio to “four” models: “iPhone 5″ for $199, iPhone 4S for $99, iPhone 4 for free* (on contract) and the iPhone 3GS as a cheap pre-paid smartphone.

        I think that iOS 6 supporting the iPhone 3GS is a clear indicator that Apple will do it – they basically have to do it, if they want to achieve even more sales in the long run.

      • Walt French

        At the first order approximation, what you’re describing is typical low-cost technological disruption. Those of us who want to understand the industry should be careful not to cheerlead profitability, but instead look at what types of investments are necessary to succeed in the future.

        Arguably, even if these low-cost producers had to buy Android for cash, Google would be able to provide it profitably at a low enough cost that the ZTEs and Huaweis could still offer pretty good phones at a significant discount to how Apple currently prices its products.

        Other considerations are obviously on the table; no reason to fear that Google would spin out Android Inc as a simple for-profit entity that might have the majority of the world’s cell phone users as customers. But the thought experiment is useful to show the market power that Google potentially has with what now looks like almost a black hole of losses and expenses.

      • TheEternalEmperor

        Don’t disagree, however, another data point is that ZTE appears to be having issues. Here is a link
        http://www.ft.com/cms/s/0/b9a41732-cefb-11e1-bc0c-00144feabdc0.html

        There are more. I wonder if we are starting to see the limits of how far down you can go and still survive as a thriving concern?

  • http://www.facebook.com/people/Luis-Alejandro-Masanti/1074106344 Luis Alejandro Masanti

    quote:
    “(Note the shipped versus sold distinction. Companies report shipments while surveys nominally measure consumption or usage.)”

    I do not pay detailed attention to the numbers (although I love the analysis), but:

    Is Apple the only cellphone maker that report “real” sales?
    Maybe Google’s “activations” are similar to sales.

    The “master of the game” is Amazon speaking about the Kindle…

    • hot_spare

      About Apple, I think it’s a misconception that they use “sales” numbers.

      From the SEC filings (http://investor.apple.com/secfiling.cfm?filingID=1193125-12-182321&CIK=320193)

      The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers recognition of revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit.

      • Walt French

        You’re focusing on a distinction without a difference. The “title transfer” means a clear end-user sale, while “most” shipments are directly to consumers — including, having them handed over in an Apple sStore.

      • Kizedek

        The misconception is not between the terms “shipped” and “sold”. The misconceptions arise around “in the channel”.

        Just as Apple has a revolutionary and highly efficient supply chain for components, they also have a revolutionary and highly efficient channel to market.

        If anecdotal evidence is anything to go by, your product is often not shipped from a local store, or even a regional warehouse. Many commenters note that their order tracking shows en route directly from the assembler in China, especially BTO items.

        If Apple does this for millions of individual customers, then it is no stretch to think it does it for its own stores, resellers and retail partners. I would imagine each store receives a few of each product as they need them — and they wish they had more.

        Perhaps someone knows more about this, or can research this; but it seems like “in the channel” for Apple, means moving from the assembler directly to the customer and barely passing Go on the way. That is why we say “shipped” equals “sold” when it comes to Apple.

        On the investor calls, Apple says exactly how much is in inventory. They *try* to maintain a certain amount (four weeks or so); but it’s darn hard, because their products sell so fast! They have not got truckloads of unsold stuff they try to flog off to a big box retailer with the idea that the retailer can send it back or cut prices if need be! On the contrary!

        Apple tries to maintain just enough stock that their products can ship within a few days, rather than saying you have to wait three or four weeks… oh, wait, the Retina MBP has been showing a ship time of 2-3 weeks since it launched, and is just about now starting to meet demand. Oh, wait, when a new iPhone “ships” people have to line up at every store in the world that carries them and hope they get one of the few allocated to the store that day… or come back the next day to see if that individual store got resupplied.

        Guess that means that “shipped” equals “sold” when it comes to Apple products, and that “in the channel” means virtually passing from Apple’s hands to the customer’s hands.

      • TheEternalEmperor

        Sorry,but I think you are misinterpreting the bolded part. You have not stumbled on a dark secret! ;-)

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

      Apple reports shipments like everyone else. They also report change in channel inventory which approximately gives an idea of sell through.

  • http://www.simnett.net/ Simnett

    Nice work! Are you saying US non-smartphones went to zero? That seems +/- plausible (especially if you see what tmo and att are ranging on their web sites), feels worth calling out if it is an assumption/finding.

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

      I tried to be as generous as possible to Lumia. It’s unlikely nonsmart went all the way to zero

  • Kristian

    That does not fit with the Nokia results. They posted a severe loss. 4,023 billion € revenue and something something like 434 million loses. They got 400 million from someone… Apple? Microsoft? Samsung? I bet on Microsoft. This is amazing thing. Microsoft records loses and at the same time Nokia receives 400 million euros.

    • Kristian

      This then again tells how small they are. Apple profit is bigger than Nokia and Samsung revenue compined when it comes to really smart phones.

  • Noah Berlove

    On the Select Your Region pafe of Nokia’s website (http://www.nokia.com/global/wayfinder/) Mexico and the Caribbean are part of Latin America.

    I believe Lumia’s were available on all the major carriers in Canada and some of the minor ones, too. The Canada portion of NA sales might be more than 10%.

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

      Interesting. Thanks for the confirmation and detail on Canada

  • Pat513

    Nokia has made a habit of sneakily adding MeeGo sales to Lumia sales, i.e. “Symbian” and “Other”, allowing everyone to assume that “other” meant “Lumia” . When I last looked at N9 numbers for Q4 2011 there were about 500,000 N9′s sold world-wide. Did Nokia specifically report “Lumia” figures at 4M, or could there be 250,000 N9s in there? Nokia recently make the N9 available in a number of countries where it wasn’t previously (like the US). No idea how well it’s sold.

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

      I believe they meant Lumia only at 4 million.

  • Samuli

    Hi Horace, I’m bit worried about that can you calculate correctly Lumia device shipments in North America region. In Nokia’s Q2/2012 results, Nokia calculates IPR revenues to be part of income for Devices & Services unit. And in the results, there’s interesting note: “The following table sets forth the net sales for our Devices & Services business for the periods indicated, as well as
    the year-on-year and sequential growth rates, by geographic area. IPR royalty income is allocated to the geographic areas contained in this chart.” (http://www.results.nokia.com/results/Nokia_results2012Q2e.pdf at the end of page 6).
    If I read this correctly, this means that 128 million euros, what Nokia reported for Devices & Services North America net sales for Q2/2012, includes also IPR revenues.

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

      This is a very valid point. It makes the analysis much less reliable. They also note that last year they received a one time payment of 430 million (from Apple) which skews the year-on-year comparison in revenues.

  • Logical Bob
    • Walt French

      Hope this doesn’t dupe an earlier post that disappeared. But for Google to note Redmond-based searches for Lumia is to suggest that people nearby, but not inside Microsoft’s fortress are searching. After all the marketing expense, it seems that Microsofties’ proselytizing is the best marketing they’ve come up with.

      (It wouldn’t be the first time that a smartphone platform was more a social/religious phenomenon.)

      The other anomaly your searches present is the high fraction of searches in Chinese. I don’t know Google Trends well enough to know the importance, but perhaps those are legitimate searches from would-be buyers who are not able to find marketing or news on the devices, and show potential buying interest.

  • Steve

    There are some good insights about the Lumia estimates. Here are few additional information to craft the Lumia number. I think Nokia Smartphone in NA now is primarily WP7, They are to exit the Symbian in NA in 2012 start from Q1, here is the interview link about that:
    http://allthingsd.com/20110809/exclusive-nokia-to-exit-symbian-low-end-phone-businesses-in-north-america/. So I think the Symbian/WP7 split could go to 5%:95%.
    I think Canada is little bit low based on your 90:10 split, I would put Canada up to 15% since two major carrier (Rogers, Telus and their discount brand) support all Lumia models (710, 800, 900, 610). Lumia Canada shipment could be up to 80-100K in Q2. but the actual installbase is low, those phones are moving slow. My two cents.

  • Walt French

    [mispost]

  • sbono13

    Nice exercise Horace, but Nokia explicitly stated their North America handset shipment volume as 600K in their earnings report (page 7).

    http://www.results.nokia.com/results/Nokia_results2012Q2e.pdf

    • sbono13

      Oops, I see that you already knew that and used it as part of your analysis. Carry on, then :)

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

      Nokia stated North American handset shipments but they did not state US Lumia sales.

  • Raj

    Any comment on upward trend of Nokia Share price since Q2 report?

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