[The mobile market is evolving, as increasing smartphone penetration is quickly shifting the balance of power between the major players. Marketing Manager, Matos, examines the latest figures from the mobile market and determines the winners and losers of the platform and handset race for 2011. Also presenting our latest 100 Million Club report – in infographic format!]
Quick facts on the rise of Android
Android is the undisputed king of smartphone platforms, at least in terms of shipments. While this was true even at the end of 2010, Android grew even further in 2011, grabbing a highly impressive 49% share in the smartphone market – this can easily be translated as follows: 1 in 2 smartphones sold in 2011 was an Android device.
Moreover, Android’s share keeps growing, rising from 42% share in the first half of 2011 to a crushing 54% share in H2 2011. This level of pervasiveness has not been seen since Symbian’s heyday, but let’s not forget that Symbian didn’t have to face such stifling competition back then.
In terms of ecosystems, while Android’s 350K apps are still lagging behind Apple’s 540+K available apps, there’s been an upset in the volume of downloads, bringing Android to the pole position. Due to a much larger installed base, Android’s downloads are growing exponentially and the Market will catch up to Apple’s number of cumulative downloads within a couple of years. Granted, a lot of these apps are Viber, Shazam and Angry Birds, but in any case Google’s business model is all about ads and an addressable audience, not device sales and downloads.
Furthermore, the Android brand name is being bolstered by large marketing budgets that provide numerous ads, news items and mentions across all printed and digital media. Android has now become a household name, mainly thanks to the support and promotion of telcos and handset OEMs, who have managed to position the platform as the new and exciting operating system for users.
Rivals to the smartphone throne
Android’s number one rival right now, iOS, also enjoyed a very good year. In 2011, Apple climbed to the second position as a smartphone vendor behind Samsung with 19% share, although it’s a very close call between the two companies. In the fourth quarter, Apple exceeded all expectations and sold 37 million iPhones, claiming nearly 24% share in that quarter. It’s quite telling that in Q4, Apple sold 80% more handsets than its previous record of 20 million, in the second quarter of 2011.
Although they’re still behind Samsung as a smartphone vendor, Apple is the clear winner in terms of both revenues and profits. Aided by the high sales of all iOS devices, including iPods and iPads, Apple raked in a 32 billion USD profit during 2011 – a figure comparable to the GDP of a small country. The question remains whether Apple will be able to repeat such a feat and continue this trend, taking market share away from platforms leaking market share, like Symbian and BlackBerry.
The third mobile platform in terms of shipments for 2011 was Symbian. There’s not much to discuss on Symbian – its expiration date is coming soon and Nokia has to convert as many Symbian sales as possible to Windows Phone sales, as quickly as possible. However, Nokia had announced four new Symbian models in 2012, but they’re only releasing one.
BlackBerry also finds itself in a quagmire, with declining market share, a decrease in share value from around $60 in Jan 2011 to as low as $16 in early 2012 underwhelming revenues and an underused ecosystem. Although RIM’s co-CEOs have stepped down and the company is under new leadership, this is a difficult boat to turn around and RIM is going to have to follow the simplest rule of all in mobile: innovate or die.
Bada snatched the 5th position of the smartphone platform market away from Windows Phone, outselling Microsoft’s platform by nearly two to one. Samsung’s platform for low-end smartphone continues to turn heads and the company seems to have even bigger plans for bada. However, both bada and Tizen (Samsung’s new open source project) are unable to compete in terms of developer mindshare. But that’s fine, as the primary use for bada or Tizen to Samsung is as a negotiating leverage against Google’s Android.
Last, but not least, we have Windows Phone as the sixth smartphone platform, with approximately 2% market share. Despite the fact that Windows Phone has been out for over a year now, Microsoft’s new mobile OS has so far met with lukewarm results – a fact commented upon by Microsoft’s Stephen Ballmer himself. Nokia’s new Lumia line has the potential to install Windows Phone in the upper echelons of the platform market, tapping the vibrant developer community that has sprung up around the platform, but there are still many risks and difficulties ahead. The fact of the matter is that WP’s chief rivals, Android and iOS, have the high ground in this battle of ecosystems and it’s never easy fighting uphill.
The Android court
The top 5 smartphone vendors in 2011, accounting for 42% of the total shipments were Samsung, Apple, Nokia, RIM and HTC – out of these, two are (mostly) Android vendors.
Although many Android vendors enjoyed a good year in 2011, it was Samsung that took the lion’s share. Samsung doubled their smartphone shipments in just six months, going from 32 million in H1 2011 to over 60 million in H2. Nearly 80% of those were Android shipments leaving Samsung as the single most important Android vendor in 2011. Samsung seems to have sold approximately one in three Android devices in 2011.
HTC did reach many milestones during 2011, such as becoming the no1 smartphone vendor in the US during Q3, but its shipments declined in Q4 and are expected to decline even further in the first quarter of 2012.
Other vendors who mainly ship Android smartphones, like Sony Ericsson, LG, Huawei and ZTE are indeed reporting an increased number of handset shipments, but they still have a lot of catching up to do. The big question for 2012 is how Google will play the Motorola card, with the deal having been green-lighted by authorities on both sides of the Atlantic. While some analysts have put forward the theory that Motorola will become a benchmark for Android handsets and will be used to keep in check other Android vendors, it’s quite likely that Google will choose a different path. Motorola’s acquisition is more closely linked to its patents, with the company’s 17 thousand patents more likely to be used as an insurance policy against Apple’s relentless legal onslaught.
Android’s expansion continues
Smartphone penetration continues to grow at an impressive pace; the smartphone market grew by 43% in 2011, from nearly 300 million shipments in 2010 to over 480 million in 2011. Penetration is expected to continue to increase and reach well into the 40% range during 2012.
It’s highly likely that, at least for the time being, Android is going to continue expanding and maintaining its current high market share. What’s more important to Google, though, is getting Android on as many screens as possible. Android is already making an impact on the tablet market, rising from 29% market share at the end of 2010 to 39% at the end of 2011. While Android has a lot of ground to cover in this particular market, it’s slowly stealing market share away from the dominant iPad, while keeping other competing platforms, like QNX and Windows, at bay. Another big bet for Google is TV; Google goal is to get as many users as possible hooked on Android, across as many screens as possible.
Feedback welcome, as always.
- Matos (@visionmobile)