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Saturday, July 30, 2011

The Profit/Phone x Phones Sold Chart

The Profit/Phone x Phones Sold Chart: "

The following chart shows the current profit distribution between phone vendors with an eye toward identifying volume dependencies. The vertical axis represents operating profit per phone and the horizontal axis the number of phones sold.

The area of each vendor bar is therefore the total operating profit that vendor captured. A vertical (portrait) orientation implies high profitability with relative low volume while a horizontal (landscape) orientation implies a high volume/low profitability focus.

The other important observation is that bars can also be negative. Those vendors’ names are listed below the bars rather than within them.

You can also compare the chart with the one from last quarter:

The Rawr Chart | asymco


Friday, July 29, 2011

Apple captured two thirds of available mobile phone profits in Q2

Apple captured two thirds of available mobile phone profits in Q2: "

The major publicly traded phone vendors have all reported results for the second quarter. Based on the data available so far we can begin putting together a picture of the market.

The first picture I’ll draw is usually the last: profitability. The following chart shows operating profit from the sale of mobile phones among the eight vendors I follow (Nokia, Samsung, LG, Sony-Ericsson, Motorola, HTC, Apple, RIM).

This quarter saw a slight sequential decline in overall profit for the sector, but four vendors did not manage a profit from selling phones. Nokia, Motorola, Sony-Ericsson and LG all saw losses. The other vendors split the slightly decreased pie with Apple getting two thirds of it (66.3%)

This share is up from 57% in Q1 and 50% in Q3 and Q4. Samsung’s share went to 15%, though that’s not a peak level historically. In Q1 2008 the company was at 21%. RIM was at 11%, a level in a range that has been unchanged for three years. Finally, HTC captured 7.4%, a new high and an increase from 6% since last quarter. The profit share chart follows:

The ranking chart for profitability follows:

Finally, the “before-and-after” view of profit capture showing the change in profit share over a four year period.

The story remains largely unchanged from last quarter: Three companies which captured 11% of the profits before the modern smartphone era started (four years ago!) now capture 84% of the profits. Only one global brand phone vendor selling non-smart voice-oriented feature phones is still profitable however, as we shall see later, the only reason profits still exist for any vendor is due to the strength of their smartphone portfolio.


A new way of measuring Openness, from Android to WebKit: The Open Governance Index

A new way of measuring Openness, from Android to WebKit: The Open Governance Index: "

[Much has been said about open source projects – and open source platforms are now powering an ever-increasing share of the mobile market. But what is “open” and how can you measure openness? As part of our new research report (free download), VisionMobile Research Partner Liz Laffan introduces the Open Governance Index – a new approach to measuring the “openness” of software projects, from Android to WebKit]

Open Governance Index cover

Openness as a function of governance

We at VisionMobile have been researching, investigating and helping to educate the industry about open source for the past five years. In this time open source software has been transformed from geekware to business as usual. Much has been written and debated regarding open source licenses – from the early days of the GPL license to the modern days of the Android platform.

Despite the widespread use of open source, from Android to WebKit, there is one very important aspect that has been neglected: openness and how to measure it.

Openness goes far beyond the open source license terms and into what is termed Governance. While licenses determine the rights to use, copy and modify, governance determines the right to gain visibility, to influence and to create derivatives of a project, whether in the form of spin-offs, applications or devices. And while licenses apply to the source code, governance applies to the project or platform. More importantly, the governance model describes the control points used in an open source project like Android, Qt or WebKit, and is a key determinant in the success or failure of a platform.

VisionMobile - Licensing vs. Governance Models

The governance model used by an open source project encapsulates all the hard questions. Who decides on the project roadmap? How transparent are the decision-making processes? Can anyone follow the discussions and meetings taking place in the community? Can anyone create derivatives based on the project? What compliance requirements are there for creating derivative spin-offs, applications or devices, and how are these requirements enforced? It is governance that determines who has influence and control over the project or platform – beyond what is legally required in the open source license.

In today’s world of commercially-led mobile open source projects, it is not enough to understand the open source license used by a project. It is the governance model that makes the difference between an “open” and a “closed” project.

Measuring openness

Our research (free copy of full report here) showcases eight mobile open source projects: Android, MeeGo, Linux, Qt, WebKit, Mozilla, Eclipse and Symbian. We selected these projects based on breadth of coverage; we picked both successful (Android) and unsuccessful projects (Symbian); both single-sponsor (Qt) and multi-sponsor projects (Eclipse); and both projects based on meritocracy (Linux) and membership status (Eclipse).

Our research, carried out over a six-month period, included analysis of these popular open source projects, through discussions with community leaders, project representatives, academics and open source scholars. This research was partially funded by webinos, an EU-funded project under the EU FP7 programme, aiming to deliver a platform for web applications across mobile, PC, home media (TV) and in-car devices.

We quantified governance by introducing the Open Governance Index, a measure of open source project “openness”. The Index comprises thirteen metrics across the four areas of governance:

1. Access: availability of the latest source code, developer support mechanisms, public roadmap, and transparency of decision-making

2. Development: the ability of developers to influence the content and direction of the project

3. Derivatives: the ability for developers to create and distribute derivatives of the source code in the form of spin-off projects, handsets or applications.

4. Community: a community structure that does not discriminate between developers

The Open Governance Index quantifies a project’s openness, in terms of transparency, decision-making, reuse and community structure.


Does openness warrant success?

But what is it that makes an open source project successful? Why do some projects become an immediate success, while others barely get off the ground before crashing and burning? We know that just like commercial ventures, open source projects have different cultures and drivers – but we do believe that you should be able to measure the way that open source projects interact with the community of users and contributors that they build up around themselves.

Our research suggests that platforms that are most open will be most successful in the long-term. Eclipse, Linux, WebKit and Mozilla each testify to this. In terms of openness, Eclipse is by far the most open platform across access, development, derivatives and community attributes of governance. It is closely followed by Linux and WebKit, and then Mozilla, MeeGo, Symbian and Qt. Seven of the eight platforms reviewed fell within 30 percentage points of each other in the Open Governance Index.

Moreover, our research identified certain attributes that successful open source projects have. These attributes are timely access to source code, strong developer tools, process transparency, accessibility to contributing code, and accessibility to becoming a committer. Equal and fair treatment of developers – “meritocracy” – has become the norm, and is expected by developers with regard to their involvement in open source projects.

The Android Paradox

Android ranks as the most closed project, with an Open Governance Index of 23%, yet at the same time is one of the most successful projects in the history of open source. Is Android proof that open governance is not needed to warrant success in an open source project?

Android’s success may have little to do with the open source licensing of its public codebase. Android would not have risen to its current ubiquity were it not for Google’s financial muscle and famed engineering team. More importantly, Google has made Android available at zero cost, since Google’s core business is not software or search, but driving eyeballs to ads. As is now well understood, Google’s strategy has been to subsidise Android such that it can deliver cheap handsets and low-cost wireless Internet access in order to drive more eyeballs to Google’s ad inventory.

Equally importantly, Android would not have risen were it not for the billions of dollars that OEMs and network operators poured into Android in order to compete with Apple’s iconic devices. As Stephen Elop, Nokia’s CEO, said in June,2011, “Apple created the conditions necessary for Android”.

Download the full report for an in-depth analysis of the openness of Android, MeeGo, Linux, Qt, WebKit, Mozilla, Eclipse and Symbian. Drop us a line and tell us what you think.

- Liz

[Liz Laffan is a Research Partner at VisionMobile. Liz has been working in the telecoms and mobile industry for over 20 years, with large telco organisations, start-up technology ventures, software development and licensing firms. Liz's interests lie in open source software governance and licensing and in particular how best can commercial organisations interact with open source projects. She can be reached at liz [at]]


Thursday, July 28, 2011

In U.S. Smartphone Market, Android is Top Operating System, Apple is Top Manufacturer

In U.S. Smartphone Market, Android is Top Operating System, Apple is Top Manufacturer: "

According to June data from Nielsen, Google’s Android operating system (OS) now claims the largest share of the U.S. consumer smartphone market with 39 percent. Apple’s iOS is in second place with 28 percent, while RIM Blackberry is down to 20 percent.

However, because Apple is the only company manufacturing smartphones with the iOS operating system, it is clearly the top smartphone manufacturer in the United States. Other leading manufacturers include HTC, whose Android phones represents 14 percent of the smartphone market and whose Windows Mobile/WP7 devices account for 6 percent of the market; and Motorola, whose Android devices are owned by 11 percent of smartphone consumers. Samsung’s Android devices are used by 8 percent of smartphone owners while their Windows Mobile/WP7 phones are used by 2 percent of smartphone owners.



Wednesday, July 27, 2011

Apple has moved on

Apple has moved on: "

When Apple changed its name from Apple Computer to Apple Inc. they signaled that their business has moved on. We can say it’s to devices or to mobile computing or to the Post-PC era. To understand that this is not a shift driven only by wishful thinking we can plot the change in volumes for the platform-based devices Apple sells.

The stack of products is shown in an increasing level of mobility. At the bottom is the non-portable desktop Mac, above are Mac portables (laptops) followed by the iPad, iPhone and iPod touch. The mobile computers Apple sells are explosively more popular (and important).

To gauge importance consider the following chart which shows the unit values above multiplied by the average price they are able to obtain for a picture of the sales mix.

(I also added Peripherals, Music and Software sales as well as iPod (non-touch) for a complete split of revenues).

Mobile computers are now well above half the revenue base for Apple. Finally, if we consider the contribution to profitability of each product line, we can see how iOS-enabled products (as a proxy for mobile computing) have become the vast bulk of profit creation for Apple.

By this metric, we can see that mobile computing (as opposed to portable or immobile computing) is driving 80% of Apple’s profitability. This 80/20 mix of mobile/non-mobile should put aside any doubts that Apple has moved on to be a business oriented around mobility rather than traditional computing.

This cannot be said for many of Apple’s contemporaries. Microsoft derives negligible revenues from mobility. Neither does Intel, nor Dell or HP and even Google’s revenue lines don’t make mention of mobile income.

In fact, the only companies which do have mobile revenues as 80% of their income are those dedicated to telecom markets. Namely, Nokia, Motorola, Sony Ericsson, RIM et. al. But, as we shall see in the quarterly mobile market overview, few of Apple’s mobile-focused competitors are doing well.

So Apple is a unique company that has made the transition from one industry to another and, in so doing, captured the bulk of the profits. In passing, I should also mention that the traditional Mac business is still doing well and, by some measures, is capturing the bulk of the PC hardware profits.

So the key to much of assessing Apple’s value and opportunity should be based on this new market (mobile computing) rather than the traditional competitive landscape of PCs and operating systems. The company has moved on, now we wait to see how long before analysis of the company follows.


The Verizon small bang

The Verizon small bang: "

As Verizon has reported iPhone sales for one and a half quarters, it’s time to try to discern the impact on the product. There were several hypotheses floating around prior to the “big bang” of Verizon.

Some assumed that there would be a large migration away from AT&T and that AT&T iPhone sales would slump. Others that there would be no Verizon iPhones volumes at all because there were so many Android users already converted. There were also suggestions that the iPhone would explode in growth with two major operators carrying it.

What really happened?

The first chart shows historic AT&T activation with Verizon activations added. It also shows sales to “none of the above”, namely non-US sales of iPhones[1].

AT&T iPhone activations show no significant impact from Verizon and Verizon itself shows a modest start to sales[2]. What did not happen is an exodus from AT&T. We also did not see a rejection of the iPhone by Verizon customers long exposed to anti-iPhone Droid advertising. We also did not see a considerable impact of Verizon on growth.

Verizon did contribute (4.5 million Verizon iPhone users is nothing to sneeze at) but the contribution was to a degree that was nowhere near a big bang.

That was because the real big bang was from the rest of the world. The same data in the first chart is shown below as a stacked area chart and a share chart. Had Verizon not come on board the business would still have grown year-on-year over 100% (and sequentially).

The US activations have been decreasing as a percent of total iPhones sold. Before Verizon came online, the US share was decreasing (from an average of 45% share in 2008 to 33% in 2010). After Verizon, the US continues to slide to an average of 30% share (two quarters).

After waiting nearly four years, American observers of the iPhone could perhaps be excused for their obsession on the impact of expirated AT&T exclusivity. But the real impact is that by the time it came, it was moot.

It would be a mistake to look upon Q1 and Q2 and say that the explosive growth was due to Verizon or the end of US exclusivity.

The global market is far greater than the US and the iPhone business has simply grown to reflect that.


  1. Non-US sales are total iPhones sold minus activations in the US. There is the possibility that some of the unactivated phones were activated on T-Mobile or that there is some delay between purchase, channel inventory and activation, but the time frame shown should smooth out any of the noise.

  2. What we don’t know is what was the impact of iPhone sales start on Verizon’s other smartphone platforms. Unfortunately, Verizon does not report overall smartphone sales/activations so we can’t conclude directly that iPhone has slowed other platforms on Verizon. Some other data (NPD, Changewave, ComScore) do indicate some slowing in Android growth in the US but we have no definitive data to prove it.


Saturday, July 23, 2011

[Infographic] The Mobile Platform Race – How do mobile platforms stack up?

[Infographic] The Mobile Platform Race – How do mobile platforms stack up?: "

We’re proud to present our latest infographic, The Mobile Platform Race, showcasing some of the most important findings and insights from our Developer Economics 2011 report (free download here).

Developer Economics is the definitive report on mobile developers, apps and brands going mobile. Developer Economics was created by VisionMobile and sponsored by BlueVia. We hope you enjoy the infographic – and feel free to embed it in your own website. Comments welcome, as always.

Feel free to copy the infographic and embed it in your website.

Developer Economics 2011

600 pixels wide version

Thursday, July 21, 2011

Apple’s growth scorecard for second quarter 2011

Apple’s growth scorecard for second quarter 2011: "

Apple’s second calendar quarter was a record breaking performance. This is surprising because it shows super-seasonal performance. For as long as I can remember the fourth calendar quarter (i.e. holiday) was always the strongest quarter, by a large margin. This quarter was higher than the last holiday quarter. A glance at the following chart shows the anomalous performance:

iOS products make up 71% of sales (and at least 78% of profits) which makes the following growth scorecard a bit moot.

The growth in iPhone sales of 150% is hard to understand given the previous product cycle, but more about this later. The 122% growth in profits is (nearly) unprecedented. The growth in Q3 2008 was due to the launch of the iPhone 3GS and since there was no iPhone launch this quarter the growth shatters existing assumptions about the franchise.

The pattern in the table above is shown in the following chart:

This performance needs to be digested and contemplated a bit longer but I will make one early conclusion: One of the most common themes during the last year was that Apple’s growth rate was unsustainable. The theory cited was one of the “law of large numbers”. Apple’s performance shows it to be nonsense.

Instead of decelerating, Apple’s growth is accelerating.


Monday, July 18, 2011

16 of Top 20 Phones Run Android on Millenniall's Network

16 of Top 20 Phones Run Android on Millenniall's Network: "

Millennial june2011Mobile ad network Millennial Media is out with its report for June and the numbers look good for Android. 16 of the top 20 devices on the network run Google's mobile OS, keeping Android as the leading OS on the network for the 7th consecutive month. Android also accounts for a 54% impression share, says Millennial.




Millennial says that Apple is still the leading device manufacturer on its network, representing 30% of the Top 15 Manufacturers impression share. The iPhone is also still the number one phone on the network with 16% of the impression share.

iOS impressions (iPhone, iPad, iPod Touch) grew 18% quarter-over-quarter, while Android impressions grew 11%.


Samsung grew 10% month-over-month, and is the number 2 manufacturer for the 5th consecutive month. The impression share from the Samsung Nexus S more than doubled last month, moving the phone into the #4 spot on the Mobile Phones chart.


HTC is in the #4 position on the Top Manufacturers chart, representing 10% of the impression share. The new HTC Thunderbolt showed up on the charts this month, as #19 on the Top Mobile Phones ranking.

RIM & Windows Phone 7

Both RIM & Windows Phone saw quarter-over-quarter growth in impression share, with RIM up 29% and Windows Phone up 31%.

Connected Devices

Although smartphones (65%) led feature phones and connected devices in the month's device mix, connected devices (i.e. tablets and the iPod Touch) grew 13% month-over-month to account for 18% of the impression share.


Millennial also released highlights from InsightExpress' Mobile Consumer Research study, which found that consumers in Q2 2011 increasingly used tablets for activities where they had previously used other technologies like TVs, PCs or e-Readers.

27% of consumers reduced their Web-surfing on the PC, 29% checked email less frequently on the PC, 23% used their e-Reader less often, 27% watched fewer videos on the PC and 19% watched less TV after a tablet purchase.


Developer Trends

For mobile app developers, Millennial reported seeing 12% quarter-over-quarter growth for iOS and 14% for Android. iOS represented 49% of the Application Platform Mix by Revenue, while Android was at 41%.


Games were still the top app category, with 27% of the impressions. Music & Entertainment grew 13% quarter-over-quarter and the sub-category of Music & Audio accounted for two-thirds of those impressions in Q2.


Smartphone Buyers Prefer iOS Over Android, BlackBerry Is Toast [SURVEY] (AAPL, GOOG, RIMM)

Smartphone Buyers Prefer iOS Over Android, BlackBerry Is Toast [SURVEY] (AAPL, GOOG, RIMM): "

A new survey from ChangeWave Research shows Apple's iOS is the most-wanted mobile operating system.

The results show 46% of people planning on buying a smartphone in the next 90 days want iOS, while 32% would prefer Android.

Then there's RIM. A pitiful 4% said they want their next phone to have BlackBerry's OS. The survey did not include Windows Phone 7.

Check out the chart to see how the demand has changed over time:

android ios rimm survey

The survey also measured user satisfaction with smartphones. ChangeWave found that 70% of iOS users were satisfied. Compare that to a 50% satisfaction rate with Android.

Here's the chart:

mobile os satisfaction survey

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