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48

Gartner data shows Nokia and Microsoft face intense battle against Samsung and Apple

WP Central

Industry research firm Gartner just released its latest data on mobile phone sales for the first quarter of 2012. There are some interesting points to be pulled out of this report that I wanted to address.

Samsung dominates Android. Gartner’s data says that Korea-based Samsung shipped over 40% of all Android handsets last quarter. So that still leaves 60% of the market to other vendors, right? Yes, but according to Gartner none of these other vendors make up more than 10% of Android volume. None.

In terms of handset brands, Samsung is also now the #1 phone maker in the world, ahead of Nokia.

Nokia may have the #2 position in the market, but we need to remember that most of Nokia’s volume is based on the dying Symbian OS. Very little is based on its Windows-powered future at this point. So, considering that we’re looking at the death of the dumphone over the next few years, let’s look at smartphone vendors and volumes.

Samsung is the #1 player, having shipped 38 million smartphones. Most of these are Android powered, with a smaller number of Bada OS phones. Here’s how smartphone market share looks, by vendor, based on the Gartner data:

  1. Samsung with 26% market share
  2. Apple with 23%
  3. RIM with 7%

These are essentially the top 3 smartphone players right now. I realize that ZTE, LG and Huawei have a larger portion of the mobile market than RIM, but RIM is a pure play on smartphones whereas these three are not. Remember that other Android vendors have less than one quarter of Samsung’s volume.

WP Central

 

What does this data mean to Windows Phone?

Back in late Feb, I wrote a post on Crackberry about how we’ll know if RIM is successful. In that article I suggested that, as the mobile phone market moves purely to smartphones, RIM could go from 3% market share to over 5%. I said they’ve got a shot at being the #4 player behind Samsung, Apple and Nokia (not necessarily in that order).

Although other vendors, such as HTC, have talked about building Windows Phone products, we all know that Nokia is the only true partner at this point. And it’s still early days in terms of understanding how this will all unfold.

Nokia’s big challenge is to migrate its customer base form a dying Symbian platform over to Windows Phone. That’s going to be a HUGE challenge in the developing markets, especially given the cost differential between cheap Symbian phones and expensive Windows powered phones. So it seems to me that Nokia could fall off the map here, ending up with much, much less market share than their current 19.8%.

Ideally, Microsoft would benefit form the support of more manufacturing partners. But if they can’t win more vendors over, they may as well buy Nokia and control their entire platform just as Apple and RIM do. For that matter, even Google is ready to fully control Android (via the Motorola acquisition) in the event that Samsung somehow moves to control its own platform.

I like Microsoft’s strategy of converging the user experience on mobile and desktop. It’s differentiated. Microsoft has always been a company who delivers great developer tools. Microsoft needs to win over developer momentum here, badly.

But, unfortunately, if either Microsoft of Nokia stumble here, the chances of Windows Phone becoming a dominant platform shrink significantly.

Nokia is still the # 2 global player in the mobile phone market. This is a good base on which to convert customers over to Windows Phones. But every quarter that Nokia bleeds share to the competition (mainly Android), the race gets much harder.

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Reader comments

Gartner data shows Nokia and Microsoft face intense battle against Samsung and Apple

48 Comments

If Windows 8 desktop systems came with a Free phone (Free meaning built into the price) then everyone wins.  Users get a smartphone, carriers get to activate lots of phones, Windows Phone becomes popular.  Its called bundleing.  Other than that, I dont think business as usual will make much a difference -- ie; Windows Phone advertising stinks.

Using their dominate position in desktops to leverage their handset play would clearly draw the attention of regulators - and not in a good way.

If I am remembering correctly, the Nokia advertisement for the lumia 900 from ATT does not actually say "Windows Phone" at any time. Big mistake there. Yea yea, the smartphone beta test is over, but what is the name of the product that ended the beta test? Its the Lumia 900. There's no mention of Windows Phone. (Unless I just totally missed it)

Strike that, reverse. Give away, bundle or heavily discount low cost Windows RT devices with a Windows Phone and shared data purchase.

Great article. At 2.80 something per share you would think the time would be coming close for MS to make a move. I would be perfectly fine with that acquisition. They would essentially have immediate tablet and phone production capabilities. Nokia is unfortunately bleeding right now with no tourniquet in sight. I am also a big fan of the convergence of the phone, PC, and the gaming platform. Once you are familiar with one piece of equipment you are familiar with all. Cross platform gaming for certain people could be a big plus as well.

Every android device i believe throws $5-$15 in the bucket for MS i believe due to a licensing agreement.  Cant remember the amount, so since android is #1, that is $$$$ for MS which they can turn and use for whatever they please...

Samsung phones are the best just look at the beautiful displays. I have a Samsung focus S (super amoled display) not buying a phone from HTC no more I was loyal since there windows mobile pocket pcs but they got lost when they started making too many Android devices that are almost the same. Last great phone they had was the Hd2.

My TITAN & TITAN II each have larger, better looking, screen than my FOCUS S and a thousand times better than the HD2. Their screens are jyst as bright but have more accurate, life like, color and their auto brightness is definitely more responsive. Their cameras are way better too boot :-P

I agree... just yesterday at lunch, my boss and I were comparing my HTC Titan I to his Samsung Galaxy S2 phone. We cranked the brightness to full, held them side by side, and my whites were whiter, blacks were blacker, and my screen was definitely brighter/clearer. It was actually embarrassing for the Samsung. Still, Samsungs are great devices, no doubt about it. I'll take one of them over an iPhone or Motorola any day of the week.

Samsung is still supporting WIndows Phone, even going so far as to not wait until apollo and releasing the Focus 2 in 4 days. To top that off, they already plan to release an amazing Galaxy s III windows device and Im sure its not going to stop there. True, NOKIA might have some issues but its going to be a win for Microsoft, one way or another. Especially if the Brand awareness is at its height come WIndows 8, how many people do you think will continue choosing Android when they can have all the specs they desire(the techies) and the simple, elegant and now cross platform OS in windows? Samsung will continue to dominate the market as long as it continues to support both android and windows. If they decide to make their own operating system, they will fall flat on their faces and you will see Samsung quickly vanish into oblivion.  Why? APPS of course. Windows Phone has almost 80,000 apps and still people say its not enough. If Samsung makes a new OS, they need to go out and get all of these developers to make apps for their system too. Its just not going to happen...thats why we are already talking about a three horse race. (4th with RIM) Can you imagine every commercial saying " download our app for blackberry, android, windows, apple and samsung? Its not going to happen....
I for one am a VERY HAPPY Samsung owner and A VERY HAPPY WINDOWS PHONE user, so hearing that Samsung is doing great isnt really something Im worried about, ya know? :D

Hi @infamousdaveman I keep hearing about Samsung looking at releasing a WP8 based on the Samsung Galaxy S III.
If this were true this would blow the doors off of Nokia and everyone else and then Samsung would be the biggest seller of WP8 and Android.
But more importantly WP8 would have a truly desirable phone that people wouldn't need convincing to buy they would WANT IT
Another advantage is that Samsung marketing is some of the best out there so as the story states it is vitally important to get Samsung on board (a real big OEM).
However when is this likely to turn from a rumour to an actual documented quote from some one at Sumsung!?
There are 83,000 WP apps
http://windowsphoneapplist.com/en/stats/
 

I think they are going to be Ok. I agree with Shane that the convergence across Microsofts platforms is going to help everything provided they nail the tablet UI perfectly. If the tablets are glitchy then everything as far as Im concerned is going to suffer and lose out. HTC One X delays on shipments by US Customs couldn't  be better timing for  the Nokia Lumia 900!! Sell Baby Sell!! Loving my Nokia Lumia 900 experience! 

Some very astute observations there, nice piece! I think Microsoft does appreciate how important inexpensive phones will be to the whole equation here. I suspect that is why they are pushing out the Tango update to allow sub-1Ghz phones with 256MB of RAM. If they give Nokia a deal on the licensing, maybe free licenses for Tango on lower cost devices for 18-24 months at least and they will be in good shape. Nokia has always been very good at building solid, cheap and reliable handsets efficiently. All they need at this point I think is 3 good designs that cover the most popular form factors, they could even base them off existing Symbian models. Free WP licenses from Microsoft and incentives to carriers all over the world to sell them. The Lumia 610 should cover one, then all they need is a cheap Lumia like that, but with a keyboard built in, and one other model, maybe something even smaller than the 610 and they'll be set. I think Nokia will still have a healthy business selling very basic feature phones for a while. It's the middle of the road high-feature Symbian (Series 60) phones that are getting killed by Android. The super-basic Series 40 phones should continue to sell for a long while. They are always going to be cheaper than a touch screen Android and they do most of what anyone really NEEDS out of a cell phone. 

Im holding my thumbs that this will will play out well. I want WP to evolve, to become better, bigger and bolder... but its really dark times and how much hope one would like to carry, there is no real light in the tunnel so far. So we better hold our breath because were in deep water...*blob blob* :-/

Curious about your comment that Google will have full control with the Moto acquisition. I would have to say that control will not be the same as Apple and RIM do on their devices. Otherwise the same Samsung that ships 40% of Android phone will look elsewhere - to Bada or Windows Phone and the manufacturers responsible for the other 60% will also look to Microsoft as an alternative.

Nokia will be fine. Windows 8 will make a significant difference. Microsoft will finance Nokia if things get ugly. Which will happen next quarter. But overall windows phone should be at 6-9% of smartphone market share by the end if 2012. 2013 will be the year of windows phone. 11-14% makes sense for windows phone by the end of 2013. Its very realistic. Microsoft will pump alot of money in to marketing windows 8. The ecosystem of windows will be very positive on the growth of windows phone

Super interesting to follow for sure. Consultant myself installing and working with SUP (mobile development platform) and Afaria (mobile device management). We supported Windows phones 6.5 and lower because it had penetration in the corporate market, but we did not pick up wp 7 because it didn't sell. 
 
Now we are working hard on Windows 8 mobile support and will support that as we see the changes. 
 
MS still have a LNG way to go to get away for t he corporate image they have though. i.e. always being late to market (remember IE vs Netscape) etc. They need to get consumers on board but their money is in corporations. 
 
Someone told me ironically that they wondered what else was going on in my mind when I mentioned the same point before, that MS has to workon becoming cool. This is their biggest hurdle. Nokia is cool, and this will help. I hope so.
 
 

Look to LG and ZTE. both with less than a 5% worldwide marketshare.... and they are the top 4 an 5 manufacturers. If nokia went the Android way, they could expect that kind of marketshare in the long term, but going WP way if WP gets 10% marketshare at some point with 75% of phones being nokia, they would have a 7.5%. It's still a far cry from their legendary 50% or more, but times have changed and 7.5% in the next 3-4 years can mean more money than 50% did several years ago. The only way for Nokia to keep in the 20% margin is for microsoft to get a 25-30% share, and right now that's unlikely. 7.5% global smartphones and tablets would be more than enough for Nokia to justify their WP choice.

What's even more impressive is that Apple and Samsung together get about 99(!)% of the smartphone market's profit.

And regarding a Nokia takeover: that will happen only after Nokia gets rid of its NSN part and I doubt that it will be by MS.

If you have a look at Nokia's financial results you will see that the licensing fees they are paying to MS to use WP are already as high as the payment MS is paying them to actually use WP. And that is with only 2 millions Lumias sold. In other words: if Nokia sells more than 2 million WP per quarter it's already BIG $$$ for Microsoft!

MS needs to make a big push. They must get ALL carriers on board with WP if they wish to be successful. They have the momentum with the Lumia 900, which is good, but they have also backed themselves into a corner at the same time with the U.S. CDMA carriers who are holding out for WP8 devices. The Lumia 900 success will not carry MS/Nokia until Sept/Oct when Wp8 is set to launch (rumored). MS has to come clean with the Mango7.5 to 8 Apollo update/transition. I'm one of the many who would love to have a Lumia 900 but has no interest in leaving my current carrier Sprint. However, if the rumors of a Nokia WVGA slider (basically a cloned upgrade of the Arrive) for the Now Network are true I'm looking for greener pastures.
 

WindowsPhone will not overtake iOS and Android. thats just the hard truth. The fact that WP cant overtake RIM by now should be talked about more.being the 3rd OS is what we can hope for. I'm ok with with WindowsPhonebeing behind iOS and Droid, it means the pressure will constantly be on MS to deliver on the OS.

WP has pretty much taken on BB market share position in most important markets and will continue to do so but this isn't anything to shout about as RIM is going south at present.
 
The real thing is to get a phone that customers demand and the rest (telco stores, networks etc) will come. A Samung Galaxy III type devie could get that going.

Microsoft and Nokia have to regain consumer trust by releasing top of the line software represented by top of the line hardware.

Nokia's keys to victory
1. Price over Specs. We all know WP7.5 is limited to what it can provide which is a good thing. This allows MS and Nokia to release a feature packed operating system backed by great industrial design at a very affordable price.

With the Lumia 900 competing against the HTC One X, Samsung Galaxy S3, iPhone 5. Nokia can drop the price to 49$ and even lower to make the phone really standout from the competiton.
2. Refocus on the Nokia Lumia 710. Make the 710 available on other networks. I would also consider re-marketing this device and making more colors available on T-mobile and even move units to AT&T and other carriers. Also drop the price to 189$ and 0$ on contract.

3. Release the Nokia Lumia 610. Market the 610 as a 150$ unlocked smartphone you can purchase and work on various carriers. If Nokia can mange to work with a low end carrier such as MetroPCS they will have the ability to capitalize the Nokia Windows Phone brand as a hero phone for a brand new up-in-coming affordable network.

Microsofts keys to victory
1. Focus on displaying services such as Skype, Skydrive, Live Mail etc. The future of ecosystems is won by services and applications. Microsoft has enough internal services to cover 90% of an average persons needs. They need to showcase their services runnning on different devices ranging from Windows PC, Phones, Slates, Xbox etc. Cut the family add lets see some real ecosystem integration.
2. Get more and more Ads added on the Internet and on the TV.
3. Dont be affraid to use slogans like "Its my Idea" Windows 7 or "Jump In" Xbox. Look at Nike "Just Do It" has been around forever Microsoft should keep their slogans and re-market them so they look nice and fresh again.
Other OEM's keys to victory
1. Market your phones. I don't understand Samsung and HTC they cater to one brand way to much. As Samsung I would take pride in my devices and showcase Android and Windows Phones together. This might be a long shot but it just shows that Samsung devices are flexable and provide great experiences on different ecosystems. Samsung, HTC etc dont side with one company so I assume they can do this.

Also if I was the CEO of Nokia I would defiently look at debuting 5 WP8 phones + 1 tablet at Nokia World
Why 5 phones because it would shake the industry up like no tommorow. It would actually catch investors interest. I would release phones that cover the following price ranges 0$, 49$, 99$, 149$ and a tablet at 499-549$
This way you will have 5 Nokia WP8 phones competing against the iPhone5 and the latest and greatest Android  phones right from the start a very good way to rapidly gaining marketshare.

I would release 2x 0$ phones
- 1 with a HW keyboard running Tango specs. Redesign of the Nokia Asha
- 1 3.7 touch running Nokia 710 Mango specs. Redesign of the Nokia 610

49$ phone will be a 3.7 touch LTE phone running Lumia 900 specs. Redesign of the Nokia Lumia 710
99$ phone will be a 3.7 touch LTE, dual core phone redesign of the Nokia Lumia 800

149$ phone will be a 4.2 touch LTE, dual core phone redesign of the Nokia Lumia 900

Tablet will be a 10.1 inch dual core tablet Nokia Lumia 800 design inspired

This gives 5 solid phones covering 5 price ranges. With affordable phones it makes it easier to bundle with Windows 8 products in the marekt which makes it even attractable to the potential consumer.

Then I would debut a 199$ superphone at MWC 4.7 inch Quad Core phone Lumia 900 inspired.

This allows Nokia to get a quick start in the marketplace and not have consitant Android like refreshes they can focus on low-high end in the Fall and superphones in the Spring to battle the competition. IMO this is a great strategy I hope Nokia does something like this to shake the industry up.
 

I like the Samsung Focus S in the picture. I call this a great windows phone. It doesn't get the respected and recognition that it should. It has less issues then Nokias Lumia series. Actually my Focus S has no issues. And it is just a great phone. I mean great that Nokia comes out with Phones but the Samsung Focus S or the HTC Titan 2 beat either Nokia Phones with no problem. To over hyped are those Lumia Phones.

The big issue is Nokia needs to sell more than few million windows phone and at it's current price ($99) and that $100 credit Nokia is losing money on the Lumia 900.  Nokia's market share is dropping like a rock and it's profitablity is dropping even faster ($1.7 Billion loss).  The other companies making Windows Phones (HTC & Samsung) are just keeping their toes wet as a hedge against Google/Android.  While that 87 million includes alll phones (dumb phones, Android, Bada,Windows phones) I'd be willing to bet they haven't sold a total of 1 million Windows Phones (Focus, Focus 2, Focus S, Focus Flash).  When Samsung releases a full line of Windows Phone 8 phones simultaneously to all 4 carriers (especially including Verizon - which may not be interested since it already has Android (good profit margins), iPhone (only to prevent defectors - terrible profit margins), still has quite a few Blackberries (and may actually favor Blackberry 10 over Windows Phone 8), and only carried the Trophy to prevent defectors -  wasn't really interested in supporting/carrying WP7.  I really don't think MS is interested in getting back into the hardware business (after the Zune debacle) and if they bought Nokia that would be the end of their relationship with the other OEMs.  Damned if you do/damned if you don't.   Another thing to consider is they may not consider phones to be critical to their future - they may be able to get by with just Win 8 tablets in the mobile space.  Remember, they said they were COMMITED to the Zune success and look how long that lasted (a shame because the Zune HD was a nice piece of hardware - much nicer than the iPod and defintely played nicer with the PC than iTunes).

Aren't Nokia the ones trying to bring down the costs on their Windows Phones though? So comparing the cheapness of Symbians and the fact that they're bringing down costs.. shouldn't be too much of a problem having them move besides mindblock.

This is 1st quarter old news. Android didn't gain serious traction until 100,000 apps resided in their app store. WP is at 90,000 - next month is the real launch of the WP platform.

I really like this site as it appears on the initial view of it quite balanced and professional and this is quite a refreshing change so keep up the good work folks.
Now a few points if I may. I agree that the marketing hasn't been very good. It mainly speaks about what the phone can do without putting it into a real life scenario/context.
So you hear the Lumia music see the mosaics and read lots of words saying facebook and tweet from the same place, people in the centre blah blah. lots and lots of great features blah blah....
Apple (and recently Samsung) put real people in one or two (not dozens) of real sitiuations and shows HOW it makes your like much better. It's inspirational advertising for what are inspirational products.
It has a 10gazillion megapixel camera
OR
here is a beautiful camera shot of your child, now lets remove that red eye or lets send it to grandma quickly and easily. Grandma smiles and everyone is happy
Its about making people smile and feel good and if you can make it memorable as well then all the better.
Having said that Nokia have done mildly better with their ads than MS usually do but it still is wek. As a slight detraction here are a set of Ads that were only aired in Russia
Russian humour and advertising talent combined produced several adverts called
"Amazing Nokia Lumia Lift:" Police, Angry Birds and Girls vvfunny

Police http://www.youtube.com/watch?v=8nbcJa1vaA4&feature=colike
I love the look of initial fear on those in the lift when the police came storming in!
 
Angry Birds
http://www.youtube.com/watch?v=f1EJfe41uRA&feature=colike
Everyone smiles when being squished by a big squeezy toy!
Last one
Girls http://www.youtube.com/watch?v=ovh0mdAHsyQ&feature=colike
Bundling or subsiding the phone with every PC is a good idea. They are currently bundling a a free Xbox 360 4GB with every WP7 phone purchase here in Aus!