Smartphone Market Update - April 2012

So, most of the press activity in April, unsurprisingly, centered around mobility, tablets and the smartphone market (essentially with a focus on the Apple iPhone 5 and the Galaxy S3). Analysts were sizing and forecasting the future tablet and smartphone market ; the press was gossiping about future product launches; and, device manufacturers were announcing either fantastic or dismal financial results.

Analyst views

The analysts, like Gartner, Forrester and IDC were arguing about the size of the tablet market, some of this coming down to their varying definitions; however, interestingly Forrester was also attempting to create a new tablet form factor category, i.e. tablet "frames", that sit within the office environment for workers to collaborate around.

However, all the analysts were predicting that the smartphone market would overtake sales of feature phones by 2014, although our view is that with the emergence of low-end smartphones, from players like Huawei and ZTE, this may help to accelerate this transition.

Press Gossip

Press speculation, in Apple's case, centered on the potential use of a "liquid metal" casing for the iPhone 5 and a potential device thickness of 8mm. Samsung rumors focused on the use of a new ceramic casing; the new quad-core chip for the Galaxy S3; and, the fact it will be running Android's Ice Cream Sandwich OS.

Manufacturers: Diversity of performance... Apple, Samsung and Nokia

Apple

Apple posted results significantly better than market expectations (with profits yoy nearly doubling to $11.6bn). Within these figures it appears that Apple sold 35 million iPhones in their Q1, although Apple iPad units didn't meet market expectations of 13 million. The short- to mid-term view must remain positive as Apple continues to exploit new markets such as China, where iPhone 4S sales surged five fold in the quarter; and, evidence from Europe that businesses are also investing in iPhones, with the BYOD trend continues. Analysts are also expecting a surge in Apple sales once the iPhone 5 is launched in June.

 

Samsung

Despite this sterling performance from Apple and putting their achievements into perspective, Samsung sold an incredible 90 million phones in Q1, 44 million being smartphones. This knocked Nokia off the top phone manufacturer slot and also overshadowed Apple somewhat.

 

Nokia

In contrast, Nokia reported very poor Q1 results, with revenues declining by 29% and an expectation that Q2 results will be poor. Essentially, they are being hit from two sides: by poor high-end smartphone sales of its Windows-based Lumia smartphones; and, a faster than expected decline in its feature phone sales. As an example of how badly Nokia is hurting, it suffered a 70% fall in phone units sold in China in Q1.

 

And don't forget the emerging players in this market, such as Huawei and ZTE. They may currently be small in the smartphone market, but they are gearing up to be major competitors in the future - so watch this space...

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