Category: Industry

Mobile Computing Industry

Nokia's fifth last chance

The cellphone maker will unveil its new flagship model E7, which comes with a large touchscreen and full keyboard, at the show in London, two sources with direct knowledge of Nokia’s plans told Reuters.

via PREVIEW-Nokia bets on new smartphones for recovery | Reuters.

Analysts have been saying that Nokia has one last chance to fix (software, UI, strategy, etc.) for some time now.

Nokia sold 24 million smartphone units sold in Q2 which represented significant growth. Sales and Profits however were both down but to say that Nokia is facing imminent demise is misguided.

How is Nokia able to sell so many units when its portfolio elicits so much pathos?

The reason Nokia can still coast with poor products is that they have a vast distribution network. I don’t know the exact distribution but let’s assume that half their phones go through carriers and half through distributors who resell unlocked phones world-wide. Carriers will continue to carry the phones because they slot into well-established portfolio slots and distributors will continue to distribute because the product is competitive in markets where there are no other unlocked smartphones at the same price.

So predicting imminent failure without taking into account distribution inertia is showing a lack of understanding of the market. The same insensitivity to distribution is why so many predictions of Microsoft’s “death” or RIM’s “death” fail.

The less sensational but more accurate description of Nokia’s predicament is that their strength in distribution prevents them from reforming their business model in order to benefit from the disruption that mobile broadband is bringing to mobile telecommunications.

That’s a mouthful.

Smartphones will outsell PCs next year

If we add Apple’s 230k “activations”, Android’s 200k, Symbian’s 300k and estimating 130k for RIM adds up to 860k per day.

It won’t be long before we’ll see smart mobile devices selling at the rate of 1 million per day (I’d bet by the holidays this year.)

Gartner is estimating the global PC market to total of 367 million units this year (though it may need downward revision based on recent data).

If the 1 million/day benchmark holds, and all indications are that it will, then the total smartphone/iPad/touch market will be greater than the total PC market next year.

Sony wavering on recognizing iPad market

Sony in May:

Sony is “not convinced there is a large enough market to justify bringing out a tablet,”

Sony would say No to Walkman today
Sony in September:

Sony Corp., said yesterday it hasn’t decided yet whether to offer its own tablet computer. It needs to be a “very appealing product that is going to be widely accepted, as opposed to a me-too product,” said Kazuo Hirai, president of Tokyo-based Sony’s Networked Products & Services Group.

Hirai said 23 companies are planning to bring tablet computers to market, making a price war inevitable.

via Samsung, Toshiba `Me-Too’ Tablets Use Price to Fight IPad – Bloomberg

I’d bet that Sony will soon join the stampede to make iPad knockoffs. They probably did not read today’s Appleinsider piece on Apple’s plans to increase iPad production to 3 million units per month.

iPod touch made up 37.7 percent of all iOS devices sold so far

On September 1st, Apple announced that 120 million iOS devices were sold to date.

We know that there were 59.6 million iPhones sold through June (from SEC filings)

We also know that 3.2 million iPads were sold.

If we assume about 8 million iPhones and 4 million iPads were sold during August and July, the total number of iPod touch sold is 45.2 million.

That is 37.7% of total units.

In April I wrote that 41% of all iOS units sold were iPod touch to date.

The expansion of iPhone distribution plus the addition of iPad as reduced the platform footprint for the iPod, but it’s still a sizable chunk. More than one in three iOS units in use are non-cellular devices. As the iPad rolls that number could move toward 50%.

LG says WP7 will outperform Android

LG has reportedly told Korean sources that “it expects WP7 to outperform the two rival smartphone operating systems” – one of these platforms is definitely Android (I’m not sure about the other platform LG is referring to; Symbian? iOS? BlackBerry?).

via LG to bank heavily on Windows Phone 7, says WP7 will outperform Android » Unwired View.

While Samsung believes WP7 is doomed, LG believes it will RULE!

This might go some way to explain why LG is in such dire straits when it comes to smartphone share.

Nokia says: "My activations are bigger than your activations"

While Jobs and Schmidt were having a contest over their mobile platform activation numbers…

Pshaw to all that, says Symbian. The company points out that according to Canalys’ research, there’s 300,000 Symbian devices activated on a daily basis, which equals 109.5 million phones activated annually.

via Sad Nokia Wants You To Know It’s Activating 300,000 Smartphones Daily.

I long for the good old days when we used to just measure units sold per quarter.

The race to a billion users

I took the venerable Consumer Platform Adoption Ramps chart and added Android and the latest data on iTunes, iPod and iOS.

To make it more readable (but conceptually more complicated) I put the data on a log chart.

Discussion

The time span covered is nine and a half years. The top of the graph marks the one billion threshold. Reaching one billion in less than 10 years is an interesting challenge for any platform and, at first glance, it seems that both iOS and Android have a shot at it. This does not seem likely for any of the other platforms.

The challenge is that as penetration grows, it’s natural for the slope for the lines to become shallower. Some platforms are simply not able to address one billion users:

  • i-Mode, AOL and other technologies with localized value networks are clearly limited to populations in their home countries.
  • iTunes is limited by the use of a PC, which has a small footprint in under-developed countries (dependency by iOS on iTunes should throw up a red flag here).
  • The iPod was embraced and extended by more ubiquitous mobile phones.

In contrast, mobile phones in general and smartphone platforms in particular have potential to reach a billion users (per platform.)

To wit, note that iOS and Android have similar curves to date and are both likely to overtake iPod and any other contender.

So for the obligatory theological question: Will Android follow the curve of iOS or will it diverge and continue on a steeper trajectory? Does it matter?

Discuss…

September Music Event: Just the numbers

  • 300 Apple Stores
  • 10 countries with Apple Stores
  • >1 million store visitors some days
  • 80k 1:1 sessions/week
  • 120 million iOS devices sold to date
  • 230k new iOS activations per day
  • 6.5 Billion apps downloaded
  • 200 apps downloaded every second
  • 250k apps available on App Store
  • 25k iPad apps available on App Store
  • 275 million iPods sold
  • #1 portable game player: iPod touch
  • 50%+ of portable game device share US and world-wide
  • 1.5 billion game and entertainment titles downloaded to iPod touch
  • 11.7 billion songs downloaded from iTunes
  • 450 million TV episodes downloaded from iTunes
  • 100 million movies downloaded from iTunes
  • 35 million books downloaded from iTunes
  • 160 million iTunes accounts
  • 23 countries for iTunes music downloads
  • 12 million song library

20 Million iOS devices sold in about 2.5 months

On June 7th, 2010, at WWDC, Apple announced that they will have sold 100 million iOS devices some time during June 2010. Today, September 1st, Apple announced that 120 million iOS devices have been sold.

Assuming that 100 million was crossed half-way through June, then the additional 20 million units must have been sold during half of June, and all of July and August. That’s approximately 20 million over 75 days or 267k units per day.

Apple also announced that there are 230k new iOS activations per day which seems consistent given that they classify these as “new” activations.

There is one huge implication of this figure:  Forecasts for iPhone, iPad and iPods may be too low. I had forecast 20 million units for the entire quarter (12.1 million iPhones, 4 million iPads and about 4 million iPod touch). The iPhone figure assumed 65% y/y growth at that looks way too low. There is still another month in the quarter meaning that the total could be 30% too low.

I will be updating the forecast accordingly.

Apple unable to keep up with iPhone 4 demand

$50 billion in cash and Apple execs bawling that they can’t ship enough product.

“iPhone 4 demand remains very robust and despite efforts to close the supply-demand imbalance and the continued supply ramp, Apple still cannot meet iPhone demand,”

via Apple unable to keep up with iPhone 4 demand, say execs | MacNN.