To all those who don’t know about it, Tomi Ahonen has published his forecast for year 2014. I really really really want to go through it but it would not give justice to him if I don’t relate that forecast to context of his track record. He has been doing these forecasts since year 2010, where I will start. In order to understand Tomi’s year 2010 forecast we need to start from his Android analysis from December 2009:

But even if Android somehow manages to grow as enormously as Apple did in the greatest new technology launch in history, then Android in December of next year will still be smaller than Apple, far smaller than RIM/Blackberry, and obviously smaller than Nokia in smartphones and not have one percent of the global handset market.

[1]

This is his epic miss. Android ended the year with 30% market share [2] being larger than Nokia (28%), which on its behalf was larger than Apple or RIM. But Tomi’s inability to understand the operator business behind Android is incredible, especially considering we are reading a forecast from a man who is supposed to know carrier relations by heart. This very inability makes him fail the base of his 2010 forecast big time. Let’s now see his hits and misses. I’ve cut out most of the text where Tomi explains his reasoning behind the forecast and taken just the forecasting part we can measure.
Another thing to note is that we do unit sales and unit sale market shares here. It is bad metric to e.g. compare Apple to Huawei in that manner. When Apple sold 10% of all smartphones, each of Apple’s iPhones cost $600. If Huawei at same time would have sold 11% of all handsets sold and each of their phone would have cost $100, is Huawei “bigger than Apple” or “winning”? Tomi says it is. I say it’s not.
However, Tomi made his forecasts in unit sales and unit sale market shares so that is the metric we will judge his accuracy on.

HIT/MISS:

Even with all that, expect Nokia not to grow market share this year in smartphones, and very likely to lose some in 2010.

[3]

As said, Nokia started the year with 39% and ended it with 28%. [4][2] Given the abstractness of this forecast we can say it was a hit. On the other hand, losing over a quarter of ones marketshare is not “losing some” which makes this a miss.

MISS:

On RIM, this is the only brand I can promise you, it will grow market share in 2010.

Anyway, all signs suggest that Blackberries are achieving ‘must have’ status among the youth. Youth fashions and desires can be fickle so this is by no means a guarantee of long term success, but for this year 2010 this bodes very well for Blackberry. As they are very secure to hold onto business/enterprise customers and see growth in youth markets, they are sure to pick up some market share points even in this very competitive year of 2010.

RIM had 20% in 2009 full year market share [4] and 16% in full year 2010 market share. [2] Tomi did not keep his promise.

MISS:

Apple is seeing a lot of business going to near rivals who also offer 3 inch touch screens but in many ways ‘better’ features. And please Apple fans don’t write about that. Yes, the Apple is by far the most user-friendly phone. But that goes only so far. And at some point Apple has to release more than one phone model per year else its market share growth will stagnate. I believe this year 2010 will drive that lesson home to Apple HQ loud and clear.

I would say for the year, if Apple can hold onto its market share – remember the smartphone market itself will explode this year -so there is going to be a lot of organic growth for those who can hold onto market share, so that is still good news. I don’t see much chance for strong growth, but it does depend on that one new iPhone model next June. It could be a ‘must have’ phone perhaps. I’d say the single best tool for Apple would be a QWERTY keyboard but I’ve been saying that since 2007 and of course Apple don’t listen to me haha…

I just love it when Tomi does forecasts on Apple. iPhone will lose market share unless it doesn’t, next iPhone will not be a hit unless it is a hit… I could go on and on. I call a miss here as Apple did not seem to lose its business to near rivals when it grew market share from 15% to 16%. [4][2] However, Tomi DOES get a hit later when he forecasts Apple to get 15 to 18 percent market share in 2010, quite opposite to what he just said here.

HIT:

So HTC was already plugging happily along in the fourth place, and now they have been increasing the awareness of their own brand, and then they have the sudden added support of the Google brand. This is sure to bring growth to HTC. How far can they grow? They are perceived as a small ‘built-to-order’ maker, and don’t have the brand appeal of the Samsungs and SonyEricssons in the eyes of the big mobile operators./carriers or the independent handset resellers in open markets. But they are now on a good growth path. I think they’re a pretty sure bet to increase market share in 2010.

This pretty sure bet went from 5% to 8%. [4][2] All thanks to their focus on Android that Tomi forecasted to have less than 1% share of all mobile phones at end of 2010.

MISS:

What can we expect out of Fujitsu. Last year they said that they are going to refocus on the world market. Expect Fujitsu branded smartphones to appear in selected markets during the year.

Fujitsu have the advantage of learning about end-user preferences in the single most advanced mobile phone market, Japan. So they can bring ideas and innovations and technologies that have an advantage. I would expect that Fujitsu will be targeting initially the top end of the smartphone market, nearer to netbooks and web tablets, and going of course head-to-head with the Apple iPhone line. But if they can hold steadily onto about a 4% global market share in smartphones simply by selling in Japan, and now start to expand, expect them to grow organically at least a few percentage points globally.

Fujitsu did not see global success and went from 4% to 2%. [4][2]

MISS:

Samsung had previously held something like 3% market share in smartphones, but – in feature phones with touch screens – they already outsell the iPhone. All Samsung need to do, is to switch their touch screen phones from their proprietary operating system to Bada during 2010, and they will exceed the iPhone annual sales in smartphones…

Samsung did not “switch to Bada”. Instead:

HIT/MISS:

Samsung says in every market they intend to be one of the top 3, or its not worth competing. They have the scale to do it, and I am very confident within at least 18 months they will overhaul those three, lagging only behind RIM and Nokia. Whether it happens in 2010 remains to be seen how far Samsung is along its diabolical world domination plans. But they will certainly grow every quarter this year once the Bada phones are launched. Grow every quarter, mark my words.

Words marked. Samsung grew but thanks to Android, not Bada. Hit/miss here. Also: Samsung ended year 2010 just behind RIM, although Apple had already passed RIM by then…

MISS:

I expect that during 2010 Samsung will push its Bada operating system aggressively to its mid range feature phones, and by converting these to ‘smartphones’ – they will achieve the most amazing market share growth ever seen in the smartphone space. Yes, in some ways its a bit of ‘cheating’ with accounting, but it fits the smartphone definition and Samsung will be grabbing headlines. As these will predominantly be touch screen phones, it will be seen as being head-on battle against the iPhone, even though in price it will more appropriately be a battle against market leader Nokia.

One quarter of Samsung’s smart phone sales were Bada at end of 2010. However, their growth was very equally coming from Android and especially in the future Android has been what made Samsung grow over others. Meanwhile Bada has been discontinued. Tomi’s vision on Bada did not make it.

HIT/MISS:

I don’t see SonyEricsson particularly growing. They have to stabilize their overall handset market share first, and then worry about smartphones.

SonyEricsson did not abandon smartphones and for full year 2010 it had 3% market share. [2] No growth – hit. Feature phones vs. smartphones – miss.

HIT:

Motorola is doing its best, but their global handset market share has been in total freefall for years – they have gone from 22% to 5% in three years! – and they now are feeling the breath of RIM in their neck, a pure smartphone maker who may overtake Motorola in total phones shipped some quarter this year.

True, RIM definitely took over Motorola.

MISS:

Motorola may appear on the charts for US smartphones with some market share, but nowhere near market leader RIM or second place iPhone. Too little too late.

This is incapability to understand the situation where Motorola was. AT&T had exclusive right to iPhone. Verizon had nothing as appealing to offer. RIM could not deliver a competitive option but Motorola did with its Droid. How can anyone expect anything else than “near iPhone” sales in US when those sales are the result of Verizon counter-iPhone initiative? Yes, Motorola did appear on the charts for US smartphones.

HIT:

Palm sells only about 800,000 smartphones so apart from being a curiosity in the US market, they are irrelevant in the big picture. They don’t account for one percent of the market and have essentially no chance of growing market share in this bloodbath of a year in smartphones. I would not be surprised if Palm passes onto history during this year.

Considering that Tomi’s measurement stick is market share, it would have been real surprise if Palm had suddenly grown to top 10 list.

MISS:

If LG feels like they’d want to have a major market share in smartphones, they could do the same as Samsung, introduce a smartphone OS to the next edition of the Chocolate and having a far cheaper phone of the popular touch screen and 3 inch screen form factor, they could easily outsell the iPhone ‘as a smartphone’ within about a year – to 18 months. But that ‘step’ is not even taken yet, as Samsung did announce its Bada operating system and will clearly now fight for the smartphone space, LG has not made any such bold announcements. At the CES this week LG has introduced two smartphones and they made noises that they’d like to get more market success in smartphones. If they so desire, they can become a massive global rival in no time.

It’s pretty obvious this forecast could have never made it. Developer interest was already fully on iOS and Android. Windows Phone 7 was way below those and even then it had more developer interest than Symbian and MeeGo – combined. Why would anyone in their right mind spend literal billions of dollars to produce a new OS when Android is available for free and MeeGo was (at this point) supposed to emerge as a free alternative in 2010? But we should remember that Tomi’s experience is not in SW but in sales of network devices where comparison will be on specs only. Tomi has always been a hardware-oriented guy and still at this point of time to Tomi the operating system is just mandatory inconvenience that you for some reason cannot remove from a phone. He doesn’t really find a value for OS unless it’s called MeeGo (and even then the big advantage was Intel cooperation, not OS as such).
For 2010 LG stuck with Android and ended the year with 2% market share, ranking 8th. [2]

HIT:

There are actually seven handset makers out of Japan and several have expressed interest last year in moving abroad, or ‘returning’ to the overseas phone markets that the Japanese brands (other than Sony/SonyEricsson) abandoned a decade ago. Some of the brands will not be doing it as smartphones but some may. We have powerhouse electronics brands there like Panasonic, NEC and Sharp. And the biggest of the Japanese handset makers is Kyocera. Any of them may find it suddenly appealing to capture part of the limelite in smartphones and do a nice little splash some time in 2010. But I don’t see them taking big market shares in smartphones but keep an eye out for the GSM World Congress in Barcelona in February for any surprise announcements.

No big shares to Japanese. Of that list only Sharp made it to top 10, ranking 10th. [2]

HIT:

Doesn’t it seem like every PC maker is suddenly doing smartphones? Dell is also in the game now. They will be releasing their first smartphone in America on the AT&T network. Dell will struggle severely for early years in their entry, in building carrier relationships with the 160 or so significant mobile operator/carriers and the 600 overall; as well as hundreds of national resellers in so many markets. They will find that the smarpthones market is totally different from the PC market and that normal free market rules do not apply. And that to get scale, they have to move downstream and diversify fast – like Blackberry has done. I don’t see them being a global powerhouse yet and won’t register in the one percent market share range this year, but they are yet another brand doing high end internet-oriented smartphones (against the iPhone).

Dell did not register (assume less than 1% market share).

HIT/MISS:

Google’s entry into the smartphone space is seen by some as going back on their word (that they do not intend to be a phone maker), and by others as stepping severely on the toes of their Android handset maker partners. The Google Nexus One suggests there will be a Two and more, so it seems like Google has made a strong commitment to become a handset maker brand, whether their phone is physically made by HTC or not.

Because it goes against so many other similar Android devices and tries to fight against the iPhone head-on, I don’t see them replicating Apple’s first year success of 10 million units, so the Nexus will be very low in the single digits even if all goes well. But behind the scenes, many Android device makers cannot be happy and there is probably a lot of lobbying to stop Google from this path. They may find a device maker revolt and be forced to pull out. On the other hand, most of the Android partners have poor options right now – Windows Mobile 6.5 is not much of an option and going back to Symbian means supporting rival Nokia – Google may well be seen as the lesser of all evils (as opposed to ‘do no evil’)

Nobody jumped out of Android train and Nexus was not a mentionable seller either. But it was not supposed to be a mass market product.

MISS:

Microsoft once had 30% of the smartphone market share. Yes thats true. Today they are vanishing fast. They have seen many Windows Mobile handset makers shift to Android and Samsung launch their own OS, so expect WinMo to keep losing market share. The worst news, one could say devastating news was that HTC decided to focus on Android for this year, as they won’t do WinMo 6.5 devices and await WinMo 7. Microsoft has promised WinMo 7 will be released at the end of this year but so often in the past Microsoft’s launch dates have slipped and the WinMo handset community and developer community have no reassurances that Microsoft has woken up to mobile and is taking it any more seriously now as it has in the many years of the past.
Microsoft has to expend a lot of resources to support WinMo 6.5 and develop 7, all while their market share seems to be cut in half quarter after quarter after quarter. One wonders why they bother, and there is a deathwatch for WinMo also at Forum Oxford already. There is no light in this tunnel and one wonders at what point MS simply decides to throw in the towel and not bother to fight for this dwindling opporunity, especially as the fight heats up so much this year with so many fresh new players and far more modern operating systems.

No, Microsoft did not throw in the towel. Both Windows Phone 7 and first devices running it came to market in 2010.

MISS:

Haha, Apps stores are a total non-story. They do not matter one iota in the big battle for smartphones this year, but you will hear all kinds of silly stats and forecasts and billions of downloads. That will not determin the market success. I told you what decides market success globally in smartphones. I also told you the media’s silly obsession with app stores is pointless. But I furthermore said that app stores are a good trend, and eventually, in many years from now, we may have real value out of app stores. Whenever you hear ‘app store’ mentioned in 2010 safely skip the story, it is meaningless to smartphone market success. Don’t fall for the app store hype.

A WHAT?!? App stores a non-story? What was continuous minus in N8 reviews? Lack of popular apps. What kept Windows Phone 7 down? Lack of Angry Birds. App stores a non-story? This only tells how Tomi does not get the apps. But we should remember Tomi’s experience being in HW. I think he just had no chance to understand the apps.

PERCENTS:

In 2010 Tomi was full of confidence on himself so he gave us “after 2010 is done” percents. From the past I know he uses “out of year xxxx” and “after year xxxx” to indicate status at end if year, i.e. Q4 results. So it’s time to check how Tomi did the percents:

MISS:

What will it look like after 2010 is done? I see Nokia in the 35 to 40 percent market share range.

(Nokia ended the year at 28%, full year was 34%) [2]

MISS:

RIM will grow to the 22 – 25 percent market share.

(RIM ended the year at 14%, full year was 16%) [2]

HIT:

Apple may hold onto about 15-18 percent share depending on how ‘awesome’ the next June 2010 version of their iPhone is.

(Apple ended the year at 16%, full year was also 16%) [2]

HIT:

Samsung is likely to grow at least past the others with Bada to fourth place and will certainly eventually overtake the iPhone, but that I see happening more in an 18 month scale than this year. Still they will be a solid number 4. I’d put them around 10% give or take a few points.

(Samsung ended the year at 11%, full year was 8%) [2]

MISS:

HTC will be the biggest of the smaller players due in large part to Google’s Nexus and its brand. It will help sell any HTCs. I would say HTC grows but to something like 6% or 7%. At worst they hold fifth place at about 5%.

(HTC ended the year at 10%, full year was 8%) [2]

MISS:

Toshiba is going to push abroad, expect them to battle HTC. LG is a dark horse, depending on if they go full steam suddenly into smartphones or are happy to do touch screen feature phones.

(Toshiba did not register at all in Tomi’s numbers. Not for Q4, not for full year.) [2]

MISS:

The other brands will be in the roughly 1 percent or less range including Motorola.

SonyEricsson, Motorola, LG were all at 5% after Q4, mainly thanks to Android. Also Fujitsu and Sharp managed to escape Tomi’s forecast by ending the year with 2% market share. All of them were also in full year top 10 having 2% or more. Motorola was 6th, right after Samsung. [2]

So many hits, so many misses. What’s the verdict? I say he did not do better than other analysts. all hits or misses are not equal so it is hard to say what hit/miss ratio Tomi had. I say it’s a safe bet to say that anyone who bought stock according to Tomi’s advice became disappointed. Tomorrow we get to see Tomi’s forecast for year 2011 and how well he managed to get Nokia’s year of demise correct.

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2009/12/us-west-coast-drunk-on-iphone-yes-but-android-is-not-the-answer.html

[2] http://communities-dominate.blogs.com/brands/2011/02/smartphone-bloodbath-2010-now-final-numbers-q4-and-full-year-2010-and-each-rival-awarded-their-final.html

[3] http://communities-dominate.blogs.com/brands/2010/01/a-bloodbath-for-2010-the-smartphone-market-preview.html

[4] http://communities-dominate.blogs.com/brands/2010/03/final-2009-mobile-phone-market-numbers-as-all-have-reported-we-have-big-news.html

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