I’ve been meaning to put together a running plot of U.S. smartphone marketshare for some time. The monthly press release from the market research firm comScore contain enough information to do it, but you have to stitch a number of them together as they only report the covered month and the third previous month. Stitching all the data together is actually rather revealing.
Android just got a boost it didn’t need. RIM, already staggering after a 5% market-share drop over the last quarter and the Playbook debacle, has just…well, “shot itself through the foot” fails to convey quite the right sort of intensity. In fact it has executed a hitherto-unprecedented form of marketing suicide which can only be characterized as a “double-tap Osborne through the head”.
The news is out that Verizon sold 2.2M iPhones in the roughly 60 days from product launch to their quarterly report. I’ll fess up; this is well over what I was expecting, based on the reports of unimpressive first-week sales.
But I also underestimated Android new-unit sales by a larger factor. Even on the very optimistic assumption that Verizon sustains its pace through Q2, Android phones are selling so much faster in aggregate (ratio of about 10:1) that iPhone 4V is barely going to budge the needle on the market share numbers (if that). Focusing too much on the the quarterly numbers is ignoring the forest for the trees.
Two consecutive smartphone-wars posts is unusual here, I know, but the latest marketshare news is high-explosive stuff. The Guardian in Great Britain has published data from a European market-research outfit, Kantar WorldPanel Comtech; the article is titled Nokia and RIM bleeding smartphone share while Android cleans up, and includes a very informative table of smartphone share numbers by country. They become even more interesting when set against the ComScore numbers covering Nov 2010 to February 2011, which I previously analyzed in The Smartphone Wars: Almost boring now….
It has been quite humorous watching the acolytes of the iPhone sink into deeper and deeper denial as Android blows through obstacles at ever-accelerating speed. It would require an epic poet, or perhaps a psychiatrist specializing in religious mania, to do full justice to this topic. But I will attempt a brief tour through the more prominent delusions here.
In this week’s installment of “As the Smartphone World Turns”, we hear dire rumors from Nokia and see (more) evidence that RIM is circling the drain. We finish with a fascinating dispatch from the Android front.
Ah, yes, I see it’s time for another comScore report and another round of breathless journalism on the state of the U.S. smartphone market. But, you know, these are getting almost boring now. Once again, Android rampages over its competition like Godzilla laying the radioactive smackdown on Tokyo. And once again…everyone acts surprised?
Get with it, people. Some of us (by which, of course, I mean me) predicted this trajectory in the first months after the G-1 launch in November 2008, and have been patiently explaining Google’s grand strategy and the underlying economics ever since. By now this kind of market news should be no surprise to anyone.
Still. This round of alarums and excursions has a few piquant tidbits in it. Let us consider them together.
By a curiously-timed coincidence, three lines of evidence have combined over the last week to convince me that I have been seriously underestimating Microsoft’s competitive potential in the smartphone market. One is that I actually got my hands on a Windows 7 phone; another is a report from a major market-research outfit that has been reliable in the past; and the third is a revealing report from an informant on the hardware side who I’ll call Deep Chip.
Google’s announced plans to delay the public release of the source code for Honeycomb, the tablet version of Android, are causing some indignation to be vented among the partisans of open source. But should it? This is a good time to reflect on what the freedoms guaranteed by the Open Source Definition actually mean and what they’re for.
I learned this morning that Windows Phone 7 – the smartphone OS that bricks your phone! – is a skin over a bunch of core components from Windows CE. Which if you came in late, is widely regarded as the second most wretched hive of bugs and villainy Microsoft ever shipped.
(Yes, I said “second most”. Even WinCE could not come near matching the epic failitude of Microsoft Bob, which can only be explained by the justified supposition that its product manager was doing the mattress mambo with Bill Gates. She later married him, and Microsoft Bob disappeared down the event horizon of a black hole created by its own suckiness.)
My initial reaction to this news was “Doomed! What on Earth were they thinking?“. On reflection, however, there is an angle from which this way of slapping WP7 together makes a horrifying kind of sense. Not that I now think it’s any less doomed, mind you…but there are perhaps some useful lessons to be learned if we examine this fiasco from the Microsoft point of view.
Well, that didn’t take long. Just a few hours ago I was speculating in a comment thread that Stephen Elop’s cozy deal with Microsoft Microsoft might lead to a fairly near-term shareholder revolt, and lo, it has occurred. Welcome to Plan B.
This is pretty dynamite stuff. A group of Nokia shareholders is planning an attempted coup at the May 3rd general meeting. They want to start by firing Elop and his henchmen, then reframe the Microsoft tie-up as a tactical play for the U.S. market, then put the company fully behind MeeGo as their bid for the smartphone future.
The question is, can it possibly work?
Stephen Elop has jumped his company off the burning platform, all right. And, I judge, straight into the fire.
No, the choice that seals Nokia’s doom isn’t the tie-up with Microsoft (though that’s problematic enough, and I’ll get back to it). It’s the way Elop has failed to resolve Nokia’s drift and lack of a strategic focus. Instead of addressing this problem, Elop plans to institutionalize it by splitting the company into two business units that will pursue different – and, in fact, mutually opposing – strategies.
After the brutal clarity of the “burning platform” memorandum, this is deeply disappointing. And not viable. One of my commenters voiced my very thought: the death spiral begins now.
So the Verizon iPhone arrives, iOS is finally multicarrier, and consumer first-day reaction is “meh…not interested”. Honestly, I wasn’t expecting this.
Yes, I predicted, based on looking at AT&T’s 4Q2010 numbers, that Verizon iPhone sales would be “anemic”. There are statistical clues that AT&T has already largely saturated the market of people who really want an iPhone. But the way I was expecting things to play out was for a strong initial burst of sales to true believers to be followed with an unusually rapid fall-off. This is not the result we got.
Wall Street Journal’s TechEurope is running the full text of an astonishingly candid memo by the CEO of Nokia. Read the whole thing, in which Elop says Nokia’s performance and strategy over the last few years has been a disaster and it’s time to jump off the burning platform before the company is consumed by flames.
I think we can deduce three things from this memo. First, Elop’s appreciation of how bad a fix Nokia is in is complete. Second, he’s going to jump Nokia to WP7 or Android when the promised strategy announcement happens in two days from now. And third, there are some subtle pro-Android clues in there.
The technology press is abuzz with news of a report from Canalys that Android is now the #1 smartphone platform in the world, with its 33% share of sales edging out Symbian’s 31% and far surpassing Apple’s 16%. In the U.S, Android smartphones are now 53% of all sold.
Once again, I was expecting this, but not so soon. As volume production of cheap Android handsets in Asia drove down prices the doom of the aging and stagnant Symbian platform was sealed, but I wasn’t expecting actual market share crossover until the end of 2Q2011. Once again, Android has exceeded expectations with eye-popping growth.
The pressure on Symbian just ratcheted up another notch. It’s reported that Nokia has scheduled a “strategy announcement” for Feb 11. Investors will be demanding a bold move to counter the catastrophic erosion in Nokia’s market share – this time last year they were #1 at 44%.
Well, well, well. A hot-off-the-press AP article, “AT&T CEO: We’ll push Android phones”, finally sheds light on the vexing question of why AT&T let Apple out of its exclusive a year early. It’s just stuffed full of revelations, but the implication the reporter fails to draw is bigger than any of the fascinating facts on exhibit.
And now, for a bit of comic relief, let us examine the state of Windows Phone 7. It launched just over three months ago in a cloud of hubris – Microsoft’s first-ship party featured pallbearers lugging a huge mockup of an iPhone (and the rest of what you need to know about that moment was that the video was caught by an Android phone). Just how is Redmond’s bid to escape irrelevance doing?
Not well enough for Microsoft to want to disclose sales figures, apparently. While Google reports 200K Android phones a day are shipping, Microsoft is reduced to gamely insisting that it is confident Windows 7 will eventually succeed. At least one of its channel partners is, shall we say, less sanguine.
Some months ago I wrote (in Flattening the Smartphone Market) about the real significance of the Android 2.2 announcement. That was the moment that Google made clear that it intended to take control of the smartphone feature list from the cell carriers. Subsequently, carrier-loaded crapware and suppression of features like hotspot and tethering have been in decline under market pressure. The release of the T-Mobile G-2 and the Samsung Galaxy S (marketed as “the pure Google experience”) have been indicators of this trend.
I should have added that 2.2 takes control of the smartphone feature list away from handset vendors as well. A leak by someone claiming to be a T-mobile employee in the know alleged that Samsung has been dragging its feet on 2.2 upgrades for the Samsung Vibrant, hoping customers will upgrade to the Vibrant 4G in order to get the 2.2 that ships with it. Now comes word that Samsung has folded under pressure from the maneuver and announced an OTA update schedule for 2.2 on the Vibrant.
Finally, after 18 months of busted rumors and false starts, Verizon got the iPhone today. Apple fanboys, still stinging from comShare’s November report that Android had passed the iPhone in U.S. market share, are delirious with joy. People who actually get paid to think about smartphone market trends are less sanguine.
Ken Burnside emailed me an interesting tip about a boring financial fact that I think is absolutely fundamental to understanding the smartphone wars. Turns out there’s no gold in them thar hills; the return on investment of wireless networks is negative.