Mobile Handset and Smartphone Market Update

Mobile Handset & Smartphone

Market Update

July 2011

Author: Patrik Pfandler

? 2011 Futuresource Consulting Ltd, all rights reserved

Reproduction, transfer, distribution or storage of part or all of the contents in this document in any form without the prior written permission of Futuresource Consulting is prohibited.

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For legal limitations, please refer to the rear cover of this report

Contents

Introduction4

Executive Summary 5

Handset & Smartphone Forecasts 13

Competitive Environment: Global18

T otal Handset Market19

Smartphone Vendors20

Smartphone Operating Systems21

Operating Systems Installed Base22

Handset Market Outlook: Country Snapshots 23

USA24

Japan 25

UK 26

France27

Germany28

Italy29

Spain 30

Appendix31

The impressive growth in demand for smartphones has revitalised the global handset market, with smartphones expected to account for nearly one third of total global handset sales in 2011, and around two thirds in terms of value. Therefore, our focus in this report is on these devices, placing them in the context

of the overall handset market.

The global smartphone installed base is expected to double by the end of 2011 compared to 2009

levels, reaching 860m units.

The report highlights the major developments so far in 2011 regarding overall handset and

smartphone market growth, the competitive landscape and operating systems (OSs).

Particular focus is placed on vendor and OS share of smartphone sales, with additional estimates made

for installed base shares by vendor and OS.

Futuresource defines a smartphone as any handset having a programmable operating system including

Symbian (including S60), Apple iOS, RIM, Microsoft, Android, Linux, Palm, bada, Maemo & others.

More detailed forecast spreadsheets and analysis, including additional country-level data (including market shares by OS and vendor), will be made available via the Futuresource website: www.futuresource-

https://www.360docs.net/doc/706452425.html,

For further detail and questions, please contact Patrik.Pfandler@https://www.360docs.net/doc/706452425.html,

Introduction

Executive Summary

Executive Summary (1)

The total global mobile handset market recovered in 2010, driven primarily by smartphone growth in all

territories.

Global mobile handset sales totalled 1.31 billion units in 2010, and are forecast to reach 1.72 billion

units by the end of 2015.

The mobile handset markets in China and India witnessed the biggest increase in 2010, growing by

approximately 30%, whereas the established markets in Western Europe, the US and Japan experienced a low to mid single digit expansion.

Global smartphone sales grew impressively by 65% in 2010, reaching almost 300 million units. Futuresource

forecasts the global smartphone market will total 950 million units by 2015, accounting for over 55% of total mobile handset sales.

The shift from standard/feature handsets to smartphones is happening more quickly than previously

forecast, with smartphones set to account for 32% of overall global handset sales in 2011 and

approaching 50% in the US and UK.

The boom in Android-powered handsets is the key driver behind the smartphone growth. More

manufacturers are supporting Google’s mobile operating system and launching increasingly low-and midrange Android-powered devices, opening up the smartphone market to a wider audience, especially the youth segment.

Overall Mobile Handset Market Recovered in 2010

Global Mobile Handset Shipments (M)

**A smartphone uses a programmable operating system (OS) e.g. Symbian (including S60), Android, Apple iOS, Linux, Microsoft,

*Percentage of total mobile handset sales.

400

800

1200

1600

2000

20082009201020112012201320142015

Executive Summary (2)

Sales of the Apple iPhone continue to grow impressively, with Apple expected to achieve a 17% global

smartphone market share in 2011 (sales of nearly 80 million units).

By comparison, Apple’s value share of the smartphone market is over 25%.

iPhone sales are particularly strong in the US, Germany and Japan, continuing to benefit from

increased operator availability. However, growth is slowing down in some countries such as France, Spain and the UK for various reasons, including supply issues, fierce competition and Apple’s premium pricing.

Apple is expected to launch the next generation iPhone in September, which will help to fuel sales in

Q4 2011.

The OS battle between Google Android and Apple iOS started to heat up in the second half of 2010, when

global Android-powered handset sales drew level with those of the iPhone. Overall in 2010, Android OS accounted for 24% of global smartphone sales and the iPhone for 17%. In 2011, Android is expected to strengthen its position, achieving 28% of the global smartphone market.

However, device fragmentation is still an issue on the Android platform, constraining developers and

publishers in providing appealing applications and content similar to Apple’s iOS ecosystem, with an inconsistent billing mechanism also an issue.

The share of Symbian-powered mobile phones is falling rapidly, particularly in Europe, as Nokia is focusing

on the launch of its first Windows Phone 7 (WP7)-powered mobile handsets with Symbian expected to fade out over the coming years. Nokia is expected to launch one mid-range and one high-end WP7 handset model by the end of 2011.

Nokia’s global mobile handset market share is set to decline to 30% in 2011, down from almost 40%

three years ago.

-5%

0%5%10%15%20%25%Continued Strong Growth in Emerging Markets Evident

% Change 2011 (est.) vs

2010: Total Handset Market (M Units)

USA

UK France Germany Italy Spain India

Japan

China

Executive Summary (3)

In 2010, RIM increased its overall global mobile handset sales. Sales decreased in the US, but a strong

performance in Europe and Asia more than compensated for this. In order to keep up with Android and Apple, RIM needs to launch more innovative devices, but as yet there are no signs of any new upcoming flagship phones in 2011.

Samsung is performing very strongly and has become a major player in the smartphone segment in the last

18 months, in particular in Western Europe, where it is expected to sell almost 15 million devices.

Samsung recently launched the Galaxy S II, its 2011 Android flagship phone, and it expects to sell twice

as many as its predecessor, the Galaxy S, which has sold more than 14 million units globally since its launch in July 2010.

HTC had an excellent year in 2010 and continues to refresh and develop its range from low to high-end

devices, including dedicated Facebook phones targeting the youth market, and revamped versions of some of its 2010 best-sellers (Incredible, Desire and Wildfire).

Motorola’s repositioned strategy towards Android smartphones has started to pay off and, as a result, sales

in Western Europe are recovering as operators begin to range them again. Motorola accounted for 14% of US smartphone sales in 2010, up from 9% in 2009 mainly due to its partnership with Verizon Wireless.

LG revised down its 2011 smartphone sales target by 20% to 24 million units, which is an indication of the

stiff competition it faces in this segment.

Similar to LG, Sony Ericsson is struggling to gain a foothold in the smartphone market, accounting for only

3% of global smartphone sales in 2011.

Chinese handset manufacturers, in particular Huawei and ZTE, are increasing their presence in network

operator portfolios in Western Europe and the US, with many focussing on the launch of sub $100/€100 devices on the Android platform.

Smartphone Penetration Significant,

USA

Japan UK France Germany Italy Spain

India

China

Executive Summary (4)

Mobile network operators across the globe responded to the smartphone growth and the associated explosion

in data usage by introducing more explicit mobile data caps and metering tools. The customized tariffs include throttled data speeds for users that consume more than a certain amount of data in a month (as opposed to truly unlimited data usage) as operators increasingly focus on maximizing revenues from data.

As feature sets on smartphones become standard across most devices, it has become increasingly challenging

for manufacturers to differentiate their smartphones from the competition.

One area of focus, in particular for Samsung, are handsets with Super AMOLED touchscreens and, after a

shortage in 2010, more smartphones are expected to be sold in 2011 featuring this display technology.

Near-field communication (NFC) is one of the key growth features with 10-15% of all mobile handsets in

the market in 2012 expected to feature NFC.

Dual-core processors are already prevalent in 2011 in high-end smartphones and tablets, from chipset

companies such as Qualcomm, Nvidia and T exas Instruments.

●Processing capability will remain a key battleground for high-end smartphones moving forwards.

Handset & Smartphone Forecasts

Handset & Smartphone Market Development:

Global, USA & Japan

Handset & Smartphone Market Development:

UK, Germany & France

Handset & Smartphone Market Development:

Italy, Spain & Western Europe

Handset & Smartphone Market Development:

Nordics Summary

Competitive Environment: Global

4%6%3.0% 3.6% 4.0%4%9.0% 4.8% 2.8% 2.9%7.8% 5.0% 3.3% 2.5%14.7%16.3%20.0%20.0%0%

10%20%30%40%50%60%70%80%90%100%200820092010

2011 (est.)

Samsung Growing Share in Overall Handset Market

Total Global Handset Market Share (% of Total Units)

1217115113141433

T otal Smartphone Sales 2010

298 M Units

Global Smartphone Vendor Market Shares

Others 8%

Sony Ericsson 2%LG 3%

Motorola 5%Samsung 7%

HTC 9%

Apple 16%

RIM 16%

Nokia 34%

Others include Sharp, Fujitsu, ZTE, Huawei