Yesterday we got to see Tomi’s forecast for year 2010. Today we step to next year, 2011. And please note that Tomi made this forecast after Nokia-Microsoft deal was announced February 11th 2011. He does all this and has all the required info for his “Elop destroyed profitable Nokia” mantra.
This time Tomi actually gives us three numbers: total, manufacturers and operating systems. It seems he gets manufacturers much better than OSes, but that probably was not a surprise. I’ll do total and manufacturers first.
This year I am modelling the smartphone industry to grow to 500 million devices shipped (67% growth rate from last year).
Actual number was 486 million  so quite good estimate.
So we start with the world’s biggest smartphone maker. Yes, even after new CEO Stephen Elop announced that Symbian, the world’s biggest-selling smarpthone OS platform would be ended, and its announced replacement, MeeGo would in fact not be the future of Nokia smarpthones, and that Nokia would switch to the smallest smartphone OS platform, Microsoft’s Phone Seven, this does not kill Nokia’s smartphones for the year. Nokia is committed to bringing another 150 million Symbian based smartphones to the market (over the next two years). Do bear in mind that the world’s second biggest smartphone maker of 2010, RIM, sold only 48 million Blackberries last year (Apple sold 47.5 million iPhones), and Nokia still now commits to more than three times that amount of more Symbian based smartphones – so this is not going to be a quick end to Symbian.
No, Nokia was not able to hold its biggest smartphone maker title. And it’s not only because of fast fall of Symbian but Apple and Samsung exceeding Tomi’s expectations, of which we get more soon.
If nothing is delayed, we may see the first Nokia Microsoft smartphones by Q4 ie just in time for Christmas sales. I would think its far more likely the first Microsoft Nokia smartphones will not appear until well into 2012. (And a small part of me says the delays will pile upon delays, and the first Microkia Nokisoft phone will ship on the last days of Q2 of 2012. That would be a major disaster.)
Shipped in schedule. Surprise to Tomi that hates Microsoft, not as big surprise to everyone else.
Nokia’s smartphone market share will crash this year, inevitably. I have modelled Nokia to hit the level of 12% by Q4 at the end of year before the recovery can start.
And all signs point to a situation that by Q4, Nokia will have fallen from first place to behind Apple, behind RIM and behind Samsung for sure, and running neck-to-neck with HTC for who gets to be in fourth place.
For the full year, I am projecting Nokia in the 13%-16% range but remember, the Q4 number is the relevant one for Nokia analysis into the new bold world of 2012.
Nokia was indeed 13% in Q4 and 16% for full year.  Very well according to Tomi’s forecast. The order he gives us does not work though as RIM fell even behind Nokia and HTC fell behind RIM so that part failed a bit but we’ll get to that next.
RIM The Canadian Blackberry maker had a good year of strong growth and profits last year, but was unable to grow as fast as the industry and lost market share quite drastically from 20% to 16%. Now they are given an unexpected opportunity to grow strongly for 2011 and even recover some lost ground.
For RIM the point to watch this year, is the balance of customers. As Nokia’s E-Series enterprise customers should naturally fall for RIM, the perfect execution will have RIM also picking up more of consumer customers. If RIM reports its balance shifting to more enterprise customers than consumer customers, that is not the optimal solution. But if RIM manages to grow the consumer segment while grabbing more enterprise customers, that is optimal performance for RIM.
It is weird that Tomi does not in any way mention if RIM should increase or decrease its sales. He is very cautious on doing that. However, RIM did not gain ground from Nokia so this is a miss. Full year share drops from 16%  to 11%  and RIM ended the year with market share of 9%.
What Apple needs this year, is the ‘Nano’ cheap variant of the iPhone. So in June when Apple is expected to announce the iPhone 5 (possibly called the iPhone 4G) – it will have a chance to offer some major upgrades to the current model – for example growing the screen size to 4 inches to better match up with the Samsung Galaxy etc phones with larger screens than the original iPhone at 3.5 inches. That would probably mean a modest increase in the length and width of the iPhone from its current form factor, but probably allowing it to continue as the very slick and slim thickness of the iPhone 4. At the same time Apple coudld/would upgrade many components, a faster CPU, more memory, a better camera etc, for the top-end model
Then simultaneously for June, announce the Nano iPhone, as a clearly smaller form factor, with say a 3.2 inch screen, but otherwise many of the specs from the iPhone 4. And price this at about half what the new iPhone 5 would cost. With internal components mostly the same as the iPhone 4, due to Moore’s Law, Apple could sell the new Nano iPhone for about half price of the original iPhone 4 price (so rather than 600 dollars unsubsidised price, sell the iPhone Nano for about 300 dollars unsubsidised) and still keep the same level of profitability. By making it smaller physically (most obviously comparing screen size) it would not be that desirable to existing iPhone owners, who will rather want the new iPhone 5. But as it will be a new iPhone for 2011, and be significantly cheaper, those who always wanted an iPhone but felt they could not afford the current models due to their price – will be able to take this cheaper model as the starter model, thinking its ‘my first iPhone’ especially for the Emerging World markets.
Again, this will eventually come from Apple, that is certain. Just look at the iPod and the Macintosh, of course Apple will sooner or later release a series of iPhones rather than just one model per year (especially in an industry that sells more devices than all PCs or all MP3 players or all DVD players or all cars… per year. And how many variants of a BMW car can you buy today? Of course Apple will be splitting its model line sooner or later). The point is, that this year 2011, because of the Nokia customer give-away bonanza, and because Apple’s price is the only barrier why most existing Nokia smartphone buyers are not going to take an iPhone – this year 2011, Apple has to release its Nano model. I really expect it rushed to the market and if they are smart about it, they’ll have it selling in June. If Apple want to be really clever at damaging the sales of all rivals – they should announce the Nano now in March or April and essentially freeze much of the sales of mid-priced smartphones and create a huge demand for the Nano iPhone up to its launch.
Apple’s total market performance in 2011 is almost exclusively dependent on the product line. If they continue with one new iPhone model only in June, then expect Apple to finish with good growth and somewhere in the 75 million iPhone sales level – a massive growth from the 47.5 million in 2010, but that would mean a slight decline in market share from 16% to 15%, quite a disasterous performance in a year when total market exploded by 67% and where the market leader Nokia gives away something like 50 million smartphone customers.
If Apple is able to relase the Nano in the summer months (for the world, this cheap iPhone is not primarily intended for the US market) then Apple should easily double its total iPhone sales from last year and be running neck-to-neck with Nokia for the title of the world’s biggest smartphone maker. Yes, if the Nano is released in the summer, Apple would do roughly 90 million iPhone sales this year.
It is clear, from various blogs and tech forums, that if Apple would release a QWERTY slider variant of the iPhone, it would be an instant hit with many who will not buy the current touch-only types of iPhones. Whenever there are rumors of a QWERTY variant of the iPhone, there are tons of comments saying ‘I’d buy it immediately’… This would be the year to launch the QWERTY iPhone, to steal many disgruntled Nokia E-series customers and take the fight to RIM for the youth consumer segment. I would think that a full touch screen plus QWERTY slider iPhone 5, with otherwise the same specs as the new iPhone 5, and costing 50 dollars more, would be the ‘must have’ phone explicitly in the youth segment. Obviuously Apple would also do its ‘facetime’ type of solution as the Apple instant messenger too, and offer that messaging app to all other iPhone owners haha.. If Apple splits the iPhone model line from 1 to 3, this year, and adds both the Nano and QWERTY – then they will easily become the biggest smartphone maker selling well in excess of 110 million smartphones. And the QWERTY model would hit Blackberry mostly in the youth segment, not so much in the enterprise/corporate segment.
Apple’s performance depends on the expansion of the model line. Its iPhone 5 will be an ultra-desirable premium price smartphone in the 600 dollar (unsubsidised) price range, where Apple makes tons of profits with it. The market is very robust, Apple would be foolish to lower the basic price level of that phone – in fact, Apple should consider going ‘upstream’ to about 700 dollars with the next top model, the iPhone 5. But Apple’s market performance for the full year depends on when the new models are released. If no new iPhone Nano (or QWERTY) is released in 2011, then Apple would be in the roughly 15% market share range, selling about 75 million iPhones. If they expand to the Nano model in the summer, expect Apple to come close to 100 million sales for the full year, and approaching 20% market share. If they are really aggressive and release the QWERTY model as well for Q4 Christmas sales, you can add another 10 million total sales, but if they are really serious and do the QWERTY for Q3 ‘back-to-school’ sales or even the summer of 2011, then Apple would be selling iPhones in the scale of 120 million units – at roughly a 24% market share level. The two announcements to watch for – when is the Nano going to ship, and if a QWERTY iPhone will also ship this year. These are the items that can dramatically boost Apple performance.
I just couldn’t shorten this more. There is so much fail in here that my verdict cannot be shorter than this: Tomi forecasts sales depending on iPhone line split.
No split – 15%.
Cheap iPhone nano + larger screen, better camera iPhone – 18% to 20%.
iPhone nano + super iPhone + QWERTY iPhone – 24%.
And reality? Apple did not split their product line, naturally. Why would they? To cannibalize their own sales and guide part of iPhone buyers to buy lower cost lower margin iPhone? In year 2011 Apple took around 60% of the profits of the handset industry while selling 19% of the phones.  It is a very nice 19% to have and you don’t want to jeopardize it.
Tomi demands Apple to create a phone that would be specced so much lower than the “true” iPhone that they would effectively be incompatible with each other. Apple can’t have that. They can sell the last year model as cheaper option as it is 100% compatible with the specs of… …last year model. The new iPhone 5C? Is iPhone 5 put into a plastic casing. Why do you think iPhone 5 was discontinued the day iPhone 5C emerged? Because they are effectively the same phone.
There is no product line split like Tomi has demanded for by TODAY and if there ever will be product line split like Tomi demands (to watered-down, half-price, quarter profits model and high-end model) nobody will be more surprised than I am.
But the bad news continue to Tomi: Apple did not increase the display size nor did they introduce 12mpix camera or removable memory card ir user changeable battery or… Nothing like that.
Tomi forecasted that had Apple been doing those improvements without product line split they would have ended to 15% market share. I wonder what was this disaster scenario of no upgrades was going to lead? down to 13%? Or even 12%?
Apple full year 2011 market share was 19% and Q4 market share 24%. Apple maxed Tomi’s forecast without any of his guidance and the fact that Tomi could not see that coming only underlines how he does not understand a bit what makes Apple tick. Probably the biggest miss Tomi did in his forecast.
HTC is poised to take more gains from Nokia than either RIM or Apple. HTC further has an ace in its sleeve – its product portfolio width and replenishment speed is far faster than those of Nokia, RIM or Apple. HTC can very easily during this year make many ‘Nokia clone’ devices aimed at very specific popular Symbian handsets, but using Android, and capture large slices of Nokia customers. With this, the question at HTC is how bold and brave can they dare to be. Imagine if HTC is able to grow 2.6 times to what it was in 2010, they would be in the 65 million smartphone unit level sales for the full year.
Tomi’s 65M stands for 13% market share. That indicates growth of 5 units of percentage from year 2010, definitely more than Apple. But HTC only grew from 8% to 9% in year 2011, ending its year with declining Q4 market share of 6%. Nothing like the success Tomi painted for poor HTC.
Samsung more than trippled in size last year in its smartphones unit.
Let me repeat. They grew by 342% last year in smartphones. If Samsung manages the same growth level this year, they’d be at 85 million smartphones, at 17% and breathing down RIM’s neck for third place for the full year.
As Samsung is in heavy growth, that means that by Q4 Samsung would be selling far more than RIM, and would be chasing Nokia for second place, and possibly even challenging Apple for first place!
This year will be the coming-out party for Samsung, and they will end the year as the darling of the industry and if they have not yet passed Apple, the pundits will all be falling over each other making predictions of when Samsung will pass Apple and become the biggest smartphone maker in the world.
Samsung exceeded Tomi’s forecast and sold 91 million smartphones in 2011. That is incredible growth from 8% to 19% market share. In Q4 Samsung had market share of 23%, just 1 point of percentage behind Apple. Exactly like expected by Tomi. I’d say Tomi got this as right as one could imagine except…
For Samsung the challenge is how to manage the shift from Android to bada.
I would expect that we’ll see several bold targets stated for bada, so that by the end of the year the vast majority of Samsung’s smartphone sales will be on bada, not Android.
in Q4 Bada equaled to 11% of Samsung sales and had 2% market share. For full year… …2%. But as I said in my verdict for Tomi’s 2010 forecast, he just does not get SW be it then OS or apps. I guess he was not listening when Elop made his stand about war of ecosystems.
For Motorola this should be a consolidation year, ensuring their primary markets are strong, with a return to clear profits, and build from there. If they can end the year with 4% or 5% market share, in line with what they had last year, they will have done very well, under difficult situations. I would see them regressing but probably not very much because in the markets they now defend, the Motorola brand is strong (including China).
Motorola indeed went from 5% to 4%, with declining market share for the whole year.
For the Nokia windfall, SonyEricsson has just nicely resurrected itself in Europe and should take a disproportionate share of Nokia’s European customers and should emerge as one of the biggest smartphone makers in the European market by the end of the year.
Sony went from 3% to 6%. I don’t have regional data but I assume they did OK in Europe.
During the past decade LG came from beyond the top 10 into the top 3 in dumbphones. Now they want to do the same in smartphones. And the second half of 2010 gave early indications of what is to come.
LG is using the 3D displays (that don’t need special goggles or glasses) as their gimmick to capture the excitement in the market. Some of their new 3D phones even have steroscopic cameras, ie their cameras can shoot 3D pictures and 3D videos. How cool is that? LG’s dumbphone footprint is global including number 2 ranking in the USA, they will be able to sell these premium 3D/Android smartphones in all advanced markets, while offering low-cost LG Android basic smartphones in the Emerging World markets to capture a piece of the Nokia dividend of 2011.
LG indeed took a rise from 2% to 5%.
I do not see Fujitsu making strong gains, but probably will grow sales just by entering China.
Fujitsu probably did not grow as expected as it fell out of top 10.
Sharp is well poised to play in several high price/high profit market niches. Moving from Symbian, Sharp is strongly positioning onto the Android platform and it should be able to make some good moves abroad this year, at the premium end of superphones.
Sharp also fell out of top 10. ‘Nuff said.
HIT (sort of):
Tomi mentions Huawei, ZTE, Lenovo, HP and Google as smartphone makers. He does not give any forecast on them but Huawei and ZTE indeed entered full year top 10 list, ranking as 8 and 10, in that order.
There are tons more kind of third tier and fourth tier smartphone makers. They will sell in the hundreds of thousands of units, perhaps in the low single digit millions this year if they’re lucky. A couple of them may emerge as a brand to follow but I don’t see them breaking into the top 10.
Yep, none of them did. (Anyone surprised?)
I cannot figure out why Tomi does forecast on OSes as he has so poor skills in the SW area. However he did and here’s the results:
The dramatic growth of Android will start to slow during 2011 as all of the big classic dumbphone makers supporting Android (Samsung, LG, SonyEricsson and Motorola) have launched on Android and there aren’t major new handset brand launches to boost the uptake.
I see Android with full year 2011 market share in the range of 35% – 45%.
Wait… You see a growth of 16% to 50% compared to Q4 numbers and even higher if we compare to full year numbers? Could you try to go and widen the area a bit more? Is there a way to possibly miss this forecast? And growing from 23% to 45% is “slowing down”? You really think that eating almost third of the competition – not one competing OS but all – globally is… …”slowing down”? Honest?
Nevertheless this ends up to be hit for Tomi as Android full year market share was 43% and he did not make forecast for Q4 market share which was 49% and still rising.
Symbian will see a huge drop in market share as it will face the end in 2012. For the full year 2011, I expect them to sell about 13% to 16% but by Q4 Symbian is likely to be as low as in the 10%-12% market share scale and continue to decline from there into next year.
Symbian full year market share exceeded Tomi’s pessimism and was 17% but Q4 was spot on 11%.
iOS should get something like 15% to 18% in smartphones (plus plenty more in iPad and iPod Touch devices) ie modest growth.
As said before iOS gets 19% without any of the Tomi advice.
I am projecting Blackberry in the range of 13% – 17% for the full year, roughly flat market share.
Fell down to 11% for full year.
I project bada to finish the year with about 7% – 9% market share for the full year and by Q4 to be well in the scale of RIM’s sales.
2% for both. AUCH! This is heavily competing with Apple forcast for the title of worst miss in this forecast.
Microsoft’s Phone 7 will ‘inherit’ somewhat a similar market share to what it had with Windows Mobile, so we could see the full year with something from 3% to 5% market share for Microsoft’s OS. If Nokia release a couple of smartphones early for Q4, that could be even better but thats a long shot, where Phone 7 the OS is not supposed to ship until October, according to Microsoft’s latest schedule.
Nokia did ship and the market share was 1% for both full year and Q4. So Tomi did not get this one right either.
Windows Mobile was killed last year but still keeps shipping in ever smaller numbers. By mid-year 2011 we should see the last WinMo handsets going out of production.
Actually Windows Mobile shipped 1M units even in Q4 2011. Tomi had to include it to his 2012 forecast because of that.
So what of Nokia’s MeeGo project? It was developed with Intel, and MeeGo is actually not dead either. Its quite a good OS even in its early forms, and already powers some netbooks. There are more than a dozen manufacturers committed to MeeGo, mostly in the IT and automobile sides of the industry but still, there should be plenty of MeeGo devices shipping during the year, enough to be a thorn in Nokia’s side. A strong candidate for an early MeeGo based smartphone handset is Fujitsu who already shipped a netbook on the OS and who have said they want to expand abroad. Where Japanese rival Sharp is doing Android, it might make sense for Fujitsu to use MeeGo as a differentiation strategy. Nokia is also committed to one handset (or more precisely, a ‘device’ so it could be a tablet or netbook or some ‘non phone’) running MeeGo this year. So we should see some view to what might have been.
Only MeeGo device that ever came out in 2011 was Nokia N9. We’ll get back to that in a moment.
What I think Intel is now trying very hard to do, is to recruit one significant handset manufacturer to jump into the MeeGo camp, to replace Nokia as the ‘strategic partner’ of Intel, to drive the OS development. Where HTC had tried to buy Palm to get that OS, this could be a very good alternate option for HTC. As they see the Android army is a rough place to be seen and to be able to differentiate, and scale tends to rule in the Android family, so HTC might soon be relegated from second place to third or even fourth, it might make a lot of sense to consider becoming a smartphone OS supplier and become ‘one of the big boys’. I am pretty sure this discussion has been had at HTC headquarters and at least preliminary contacts have been had. Intel was pretty upset when Nokia abandoned them so they’d love to have someone step in.
The other obvious candidate would be LG. I think LG is kicking itself for how poorly it executed the transition from dumbphones to smartphones, specifically in contrast to its neighbor, Samsung. And if Samsung has its own OS (in bada) then there is no doubt a level of pride involved at the HQ of LG, thinking that they too should have their own OS. It might be too expensive to build one from scratch, but MeeGo is ready to run. Why not join Intel and make MeeGo the primary OS for LG handsets.
As a long shot, I could even see Sharp going for it with Intel, or one of the Chinese brands, ZTE, Huawei or Lenovo. Even Motorola could possibly join MeeGo as of the big five Android makers (Samsung, HTC, SonyEricsson, Motorola and LG), Moto is the only one which has no other smartphone OS as an alternate strategy. And Moto was the second bestselling Android brand early, now they have fallen to fourth. So Motorola might want to try MeeGo as an alternate, perhaps. But like I say, its a long-shot.
So… Samsung-Intel alliance to produce Tizen never even occurred to mind of our most accurate forecaster? Whoa.
But its most likely that MeeGo will not be on even a million handsets this year, even with the one Nokia device included, and that means far less than 1% in market share for MeeGo, the newest OS for smartphones.
That right. Amount shipped should be around 700 000 devices, practically all in Q4.
And then we have HP and its Palm WebOS. Like I wrote in the above, I don’t see strong growth for HP this year, they need to work at their carrier relationships and they would be happy to get to a 2% level in market share for the year, probably well below that.
WebOS? Wait, isn’t it the cool OS that never came to be? It did not register at all.
As quite expected, Tomi was more successful on brands than on OSes. Tomorrow we get to see year 2012 where he slowly starts to learn from his past mistakes and starts to make less forecasts. 😀
 Year 2011 Q4 and full year results:
 Year 2010 Q4 and full year results: