Despite the gloomy economic picture and the problems being experienced by some of the leading mobile handset vendors, global shipments of smart phones hit a new peak of just under 40 million units in Q3 2008, according to the latest estimates from leading analyst firm Canalys. This means smart phones now represent around 13% of the total mobile phone market, up from 11% last quarter.
The introduction of the iPhone 3G in July and Apple’s expansion into many more countries helped propel the vendor to second place globally, taking it above RIM in the quarter and resulting in higher shipments than for all the Microsoft-based smart phones combined.
“It was expected that Apple would figure among the smart phone leaders this quarter, with that huge initial new product shipment, it was just a question of how high up it would be – and this is impressive,” commented Pete Cunningham, Canalys senior analyst, in the press release. Despite RIM being nudged into third place, its growth of over 80% shouldn’t be overlooked either. “This is also a tremendous performance, especially considering the delays it experienced in rolling out the Blackberry Bold,” Cunningham added. “Some customers will also have been waiting for the Storm to arrive. With these new products and the clamshell Pearl 8220 available in Q4, it is quite feasible that RIM will return to the number two position.”
The success of Apple and RIM, as well as fifth-placed HTC with its Windows Mobile devices, has eaten into Nokia’s share of the smart phone market – a market it has led consistently for several years. Nokia’s broad portfolio of models, and the wider audience it attracts, does leave it more exposed to the trends affecting the overall handset market. Year-on-year its smart phone shipments fell in Q3 for the first time. “Nokia is also transitioning from some very successful volume drivers, like the N95 and E65, to a number of successors, such as the flagship N96, and shipments of these new models have not yet ramped up,” noted Canalys analyst Tim Shepherd in the press release. “And Nokia has taken time to bring a touch screen product to market in the wake of the iPhone’s success, despite having had the experience of producing the Series 90-based 7710 four years ago. Conversely, vendors such as HTC with its Touch Diamond have capitalised on customer demand for this type of product.”
Through its Consumer Mobility Analysis service Canalys has surveyed over 13,000 European mobile phone users on a wide range of mobility topics. Having identified strong underlying acceptance of using touch screens on phones back in April 2007, another survey in early 2008 revealed that three-quarters of consumers in countries where the iPhone had launched expressed interest in having a touch screen on their phone. Touch screens also proved to be the most popular device design when users considered their future mobile usage of applications such as playing music, using maps and web browsing. Nokia is focusing on these applications, for example through Nokia Maps and Ovi, and has led in including technologies such as GPS, but other vendors are doing a good job of conveying the impression of having innovative devices optimised for such usage.
“With competition in the smart phone space heating up, being able to introduce technology and user interface enhancements quickly is critical,” added Shepherd. “You also need to be able to integrate them seamlessly into the device to provide a great total user experience. And that means having sufficient control of development of the operating system, which Apple and RIM clearly have already. Nokia’s acquisition of Symbian should help it in this regard, regardless of what other Symbian Foundation members choose to do.”
Motorola, currently holding onto fourth place in smart phones thanks largely to its Linux-based models, recently announced it would move away from using the Symbian OS and focus more on Android. With T-Mobile’s G1 now shipping in the US and the UK, Android will appear in the Q4 smart phone numbers, but more vendors and a wider range of device designs will be needed to achieve significant global shipment levels. “While they will appeal to some, particularly professional users, research suggests that devices with large, slide-out keyboards just don’t resonate as well in the consumer market as pure touch screen designs,” Shepherd added.
Looking at the Q3 smart phone market by operating system, things have got particularly interesting with the decline in shipments of Symbian devices by the key Japanese vendors, and each of the top five hardware vendors largely allied to a different OS.
Despite being overtaken by Apple globally in Q3, Microsoft has increased its share of the smart phone market year-on-year, helped by the volumes being achieved by vendors like HTC and Samsung in particular. With Android about to be thrown into the mix, Canalys expects that 2009 will see Symbian remain on top, but that it will be fairly closely fought between the other major smart phone operating systems, presenting operators and application developers with some challenges around where they deploy their resources.
The new edition of Canalys’ smart phone and mobile navigation trends report is now available. It investigates the key global market trends, looks at regional differences and the performance of the leading hardware and software vendors, emerging technologies, user behaviour and other factors to deliver a broad picture of the state of the market and its direction. This unique work, now in its seventh successful year, is specifically designed to help companies formulate their strategies in this fast changing environment.
The shipment estimates discussed in this release come from the market-leading Canalys Smart Mobile Device Analysis services. Canalys’ globally consistent market segmentations and definitions are used by vendors the world over to provide a coherent view of the smart phone market. Canalys offers services looking at the markets by country in Asia Pacific, North and Latin America and EMEA, as well as providing global market overviews and survey-based analysis of consumer and enterprise attitudes and preferences toward mobile applications, devices and services.
More info here.
[Thanks to MacDailyNews Reader “KenC” for the heads up.]
Bloodbath.
“There’s no chance that the iPhone is going to get any significant market share. No chance.” – Steve Ballmer, April 30, 2007
Microsoft CEO Steve Ballmer laughs at Apple iPhone:
• “[iPhone] just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.” – Eamon Hoey, Hoey and Associates, April 30, 2008
• “We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.” – Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008
• “Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple.” – Peter Misek, Canaccord Adams analyst, March 07, 2008
• “[Apple should sell 7.9 million iPhones in 2008]… Apple’s goal of selling 10 million iPhones this year is optimistic.” – Toni Sacconaghi, Bernstein Research analyst, February 22, 2008
• “What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.” – Laura Goldman, LSG Capital, May 21, 2007
• Motorola’s then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple’s iPhone, due out the following month. “How do you deal with that?” Zander was asked at the Software 2007 conference. Zander quickly retorted, “How do they deal with us?” – Ed Zander, May 10, 2007
• “The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.” – Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007
• “Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.” – John C. Dvorak, Bloated Gas Bag, March 28, 2007
• “Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment.” – Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007
• “I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.” – David Haskin, Computerworld, February 26, 2007
• “There’s an old saying — stick to your knitting — and Apple is not a mobile phone manufacturer, that’s not their knitting… I think people overreacted to it — there was not a lot of tremendously new stuff if you think about it.” – Greg Winn, Telstra’s operations chief, February 15, 2007
• “Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it’s a hard pill to swallow just to have the coolest thing.” – Neil Strother, NPD Group analyst, January 22, 2007
• “I can’t believe the hype being given to iPhone… I just have to wonder who will want one of these things (other than the religious faithful)… So please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008.” – Richard Sprague, Microsoft Senior Marketing Director, January 18, 2007
• “The iPhone’s willful disregard of the global handset market will come back to haunt Apple.” – Tero Kuittinen, RealMoney.com, January 18, 2007
• “[Apple’s iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.” – Steve Ballmer, Microsoft CEO, January 17, 2007
• “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.” – Matthew Lynn, Bloomberg, January 15, 2007
• “iPhone which doesn’t look, I mean to me, I’m looking at this thing and I think it’s kind of trending against, you know, what’s really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these… And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it.” – John C. Dvorak, Bloated Gas Bag, January 13, 2007
• “I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed.” – Jack Gold, founder and principal analyst at J. Gold Associates, January 11, 2007
• “Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it.” – Bill Ray, The Register, December 26, 2006
• “The economics of something like [an Apple iPhone] aren’t that compelling.” – Rod Bare, Morningstar analyst, December 08, 2006
• “Apple is slated to come out with a new phone… And it will largely fail…. Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits… When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.” – Michael Kanellos, CNET, December 07, 2006
• “We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” – Ed Colligan, Palm CEO, November 16, 2006
What is a Q Phone?
How about them Apples!
Ballmer is right
…it may sell very well…
Ballmer sticks his foot up his ass AGAIN!!! Ba,ha,ha,ha,……!!!!!
Geniuses and visionaries all. Let’s hire them and pay them multi-millions to lead our companies!
Doofuses.
Peace.
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Olmecmystic
FIVE HUNDRED DOLLARS?!? BWAH HA HAR HWAR SUBSIDIZED HAR HARGLE DURRR yeah it might sell okay
Ed Colligan can be reached at edcolligan.unemployed.com
Just looking at the numbers I notice iPhone penetration roughly equals Mac penetration in terms of market share. Good numbers for such a short span, but personally, I won’t be predicting a world wide assault by the iPhone until it jumps the perceived OS gap becoming as widespread as iTunes is in the Windows world. 10% share means they’re breaking heavily into the Windows world and well on their way to being unstoppable, just like the iPod did.
I also notice the iPod Touch is not counted in this category of “phone” but many are using it as their prime communications device. If Apple is smart enough to release one with a built in mic, it could change everything.
Richard Sprague,
January 18, 2009 is right around the corner and I have it bookmarked too:
http://daringfireball.net/linked/2008/10/22/sprague
I cannot wait to see your back pedaling post.
I see ‘said’ people…
“iPhone outsells all Windows Mobile devices combined”…
How can they do that with no plastic keyboard?
god…reading some of those quotes is just hilarious. how can so many people be so clueless and shortsighted. from a business perspective, to completely blow your competition off and dismiss everything like these folks have, it amazes me that they even have jobs.
what idiots. i think i want one of those jobs, they just seem so easy. scott moritz from thestreet.com is a goddamn idiot too.
I propose a new game show:
“Are Analysts Smarter Than A Rock”
I guess when you think it through we already know the answer…
When the iPod came out, I told all my friends and family to buy Apple stock, this premiss has only been reenforced by the iPhone.
Suck it, Ballmer!
When I first saw the iPhone announced in Jan07, WAY before switching to Mac had even occurred to me, I knew the iPhone would be my next phone. I was tired of Nokia after Noika that sucked, and I never saw anything more compelling. I’d only recently bought an iMate KJAM (WinMob5) in desperation for something more functional & that would integrate decently with desktop Windows/Outlook, but it was somewhat of a disappointment esp in terms of user interface, the phone functionality in particular seemed a total embarrassment to Microsoft. I didn’t pay much attention to the “experts” above, it was clear to me at least that the iPhone would be revolutionary and at the very least would drag the rest of the phone industry kicking and screaming into making stuff that sucked less, even if it didn’t dominate its market segment. FF 21 months, and the “experts” above, who ostensibly are ‘right enough’ about so many other things, have been blinded by a cynicism derived, i think, from Apples troubled past to such an extent that when – for many people – phone nirvana was shown before their very eyes, they couldn’t see it. Or in the case of phone company execs, in denial of the fact that they’d just had their sucky phones shown for being what they were.
oh & btw, that iMate KJAM cost me $1100 outright + 12month plan commitment – no phone subsidy at all, such was Optus’s neanderthal approach to the business smartphone market less than 2 years ago. prior to that i’d NEVER had to outlay cash for a phone. along comes the iPhone 3G, and just like every Nokia before it, I just sign up to a 12 month contract paying the same monthly rate i always have ~AUD$60/mo, and i pay NO money up front. NO ONE in the industry was expecting the “outragously expensive” iPhone (1st gen) to reach that situation, let alone only 12 months after its release.
Many of these ‘Idiots’ made their predictions based upon the original, unsubsidized price of the iPhone 1.0
Who new Apple would be selling a $199 iPhone 2.0 G3 in 2008? Apple was selling unsubsidized iPhones when many of these predictions were made.
If Apple had refused to sell unsubsidized iPhones in 2008 and many thought that would be the case, then results would have been different. Apple has been very stubborn and stuck to it’s guns before. If they had been stubborn again on the unsubsidized pricing, then many of these foolish predictions would have been right.
So basically if they hadn’t done what they’d done it wouldn’t have turned out how it turned out? Dude, you’re a genius.
The other thing thats interesting is the life span of phones. I’ve always gotten a new one after 1-2 years, not sure of the life span on new smartphones, they maybe longer, but even BBerry’s are being changed out in around 12-24 months. So, that means that if Apple can manage to keep or increase that % they will have achieved market penetration of about 20% within 2-3 years. That’s a nice kick in the pants for OSX and Safari on the web. Maybe that will get developer attention.
Al doesn’t know what he’s talking about. Apple’s net price it was receiving for the original phone is pretty much the same as is the net price for the 3G.
Let me make it more clear: original iPhone was SUBSIDISED. AT&T was paying Apple some $200 less than it pays for the 3G, so the $200 difference was paid by the consumer. The bottom line is, Apple is receiving about $650 for each iPhone sold, and it was receiving about the same amount for the first iPhone.
The only things that had changed were:
1. Retail price (the most visible thing and the cause of Al’s confusion);
2. The net subsidy by AT&T;
The revenue sharing model; originally, Apple was getting a small up-front subsidy and a monthly share of AT&T’s data plan fee. With iPhone 3G, Apple is getting around $450 for each iPhone sold.
The foolish predictions never had a chance of every being right. We are talking about Apple, after all, and Jobs is at the helm.
My favorite of all time —
“How do you deal with that?”
Ed Zander was asked at the Software 2007 conference,
Zander quickly retorted,
“How do they deal with us?”
By canning your ass Ed that’s how, and steamrolling your bones.
I’d suggest that MDN make some phone calls to find a good Mac Journalist who’s able to go sit down with Richard Sprague (Microsoft Senior Marketing Director) in his office.
The give Sprague’s office a call to set up an interview appointment for monday, January 19, 2009.
It won’t be much longer until more people figure out that that’s 2 years + 1 day after Sprague said:
“So please mark this post and come back in two years to see the results of my prediction…”
Of course, this assumes that Sprague is still employed…
-hh
Zune Tang, Where are you?
Why is it you never seem to comment when the article shows Micro$oft is losing a battle.
I am now wondering Zune Tang is MDN Just trying to stir it up a little and keep us Mac Heads on our toes
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Ahhhhh…the sweet pleasures of the MDN iCal quote tracker! Thanks MDN for the trip down memory lane!!
Shout out to C1 whereever you are
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