Samsung follows up a banner year 2011 with a blow-out year 2012, doing everything perfectly. Wherever Nokia dropped some candy, Samsung was there to snatch it up. Where rivals missed opportunities, Sammy pounced. Where Apple left openings, you found Galaxies. Galaxy Note, Galaxy Beam, Galaxy Camera, Samsung was the poster child for glamor and cool in mobile, yet managed to serve smartphones to the very low end of the price pyramid with its proprietary entry-level bada OS (the most successful smartphone OS launch in the history of this industry, yes selling more in its first two years than Apple's iPhone). As to how does Samsung currently split its smartphones across its three main OS platforms in Q4, its like thisSAMSUNG SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEMSamsung on Android . . . . . . . .94%Samsung on bada . . . . . . . . . . 5%Samsung on Windows Phone . . 1%Source: TomiAhonen Consulting Estimates February 13, 2013 from vendor data and other sourcesThis table may be freely distributedSamsung was the fifth biggest smartphone maker two years ago. It fought its way to second biggest last year - doing this profitably, and now jumps ahead of Apple, growing from year 2011 by 221% and finishing with smartphone sales of 215 million, and 58% bigger than number 2, Apple in smartphones. And Samsung did this all profitably, while preparing to launch its new OS, Tizen for 2013. What Samsung did in smartphones in the past two years, is similar to what Nokia did to Motorola in digital phones 15 years ago, or what Apple did to Sony in portable music players a decade ago. Ironically, Samsung was able to spank both of these competitive masters, Nokia and Apple, in the process. Behold the new home electronics master, if Samsung continues at this rate, it will be more than twice as big as its nearest rivals in the smartphone business by year-end. This is perfection in the execution of a smartphone strategy, not one tiniest stumble in the whole year. Samsung earns an A+2ND - APPLE - 135.8 million smartphones, 19.5% market shareGrew 46% from 2011, profitable, BLast 8 quarters market share 18% - 19% - 14% - 24% - 24% - 17% - 16% - 22%Apple seems to have peaked a year ago, when it was hitting 24% market shares quarterly. Now it only manages to get to 22% level. This is still very powerful sales and market share performance, Apple is a clear number 2 in the smartphone races, and ludicrously profitable doing so - but its market gobbling growth path has stalled. Now Apple is in anemic growth stage, as it tries to find ever more elusive markets for its high-priced iPhone models. Its about time to release lower-cost iPhones to address the mass markets in the Emerging World where most smarpthone business will be made.The latest iPhone model, the iPhone 5 was received with far less excitement and amazement as previous major releases, and the iPhone screen size and camera etc are falling behind the leaders to an alarming degree. Apple still has the highest loyalty in the industry but the gap to the competition is shrinking and Apple's unique sales points are losing some of their luster. Blackberry finally has its iPhone-clone built on its new BB10 OS, the Windows Phone OS under WP8 is 'competitive' or so claim Microsoft and Nokia; totally new and better OS platforms are launching in 2013 like Tizen and Sailfish (both evolutions of Nokia's abandoned MeeGo, the first OS that was rated better than Apple's iOS). Apple is squeezed now from all sides, with massive screen sizes like Huawei's 6 inch screens, and enormous cameras like Nokia's 41 megapixel Pureview (rumored to come to Lumia) etc. But Apple has the chance now to split its product range, offer a lower-cost 'Nano' iPhone and introduce a bigger screen monster iPhone in the $1,000 price stratosphere to own once again the top of the price pyramid (before Samsung does that too). Apple had a very profitable year, it became the most valuable company on the planet etc. That is irrelevant to THIS contest. That is a battle for 2012. This is the race for the decade. He who owns the smartphone space in 2020, owns every consumer's identity, wallet, behavior, and value. Apple is fighting to win the wrong war right now (vs Samsung and Google who have their eyes on the big prize). So what matters in the Smartphone Bloodbath - is to have market share and doing it profitably. Apple is satisfying short-term profit greed at the cost of long-term market share gains. Wrong move. I grade Apple's monsterously profitable, but anemic market share growth year only as a B.3RD - NOKIA - 35.0 million smartphones, 5.0% market share, Shrunk 55% from 2011, loss-making, F-Last 8 quarters market share 24% - 16% - 14% - 13% - 8% - 7% - 4% - 3%Nokia is a total wreck. Nokia towered over its rivals only 24 months ago, twice as big as its nearest rivals (this is a bigger dominance of an industry than Toyota or GM or Volkswagen have ever had in cars, bigger than HP or Dell or IBM or Apple have ever had in personal computers). Nokia grew more in year 2010 than its rivals like Apple, RIM and Samsung, meaning Nokia was pulling away from the competition, the gap to the rivals was growing, not shrinking. Nokia sold 100 million smartphones in 2010 and did this with increasing profits and increasing profitability. This was done using the old Symbian OS which Nokia was about to replace with the highly admired and desired MeeGo OS. That all, new CEO Stephen Elop observed, and decided that when you are twice as big as your nearest rivals, highly profitable and growing faster than your rivals - that is a catastrophy so bad, you stand on a 'burning platform' and Nokia had to abandon this degree of 'failure' and instead select the least successful, most undersirable, bug-filled and risky platform, Windows for its smartphones - a move that had destroyed every other company that ever tried this moronic move in mobile. Immediately after announcing this mad Microsoftian misadventure, Nokia was plunged into disasterous sales collapse globally. Nokia's massive market share of 29% in Q4 of 2010 fell to 12% in Q4 of 2011 - literally a world record collapse of a global market leader. Not only was this worse than any other handset industry failure like Palm, Motorola, Siemens and Blackberry, this is literally the worst collapse of a market leader of any industry, ever. Worse than Coca Cola disaster with New Coke. Worse than the brakes recalls with Toyota. Worse damage to the market share and revenues and profits of the company than even the oil spill by BP with Deepwater Horizon or the earlier oil tanker disaster around Exxon Valdez. This is the world's worst failure by corporate management of any Fortune 500 sized company that was a leader of its industry. Yes, Nokia's CEO established a world record in failure with his idiotic strategy. Then, not content to hold the world record for management failure, Elop decided to make matters worse, and mismanaged Nokia so badly in 2012, that he set a new record in failure for 2012! He plunged Nokia's mid-tier 12% market share in Q4 of 2012 down to what it is now as 3% for Q4 of 2012. He took a world record in failure, and decided it was not enough, he broke his own world record for failure. Stephen Elop will go down as the name of the most self-destructive CEO in the economic history of corporate governance.Do I need to say more? Nokia made huge profits with smarpthones before this strategy. Now at one point in the year, Q3 of 2012, Nokia produced a 49% loss per smartphone sold. The transition from Symbian to Windows was promised by Elop in his February 11, 2011 strategy to be a 1-to-1 transition. Instead he has scared away 17 out of every 20 customers he tried to migrate to Windows. Of the remaining 3 who were duped into taking a Lumia branded Windows Phone smartphone, two out of three hate their phones so much, they will never take another Windows Phone again (says the latest Bernstein survey of consumer satisfaction). This mirrors earlier Yankee Group survey that among Lumia buyers, four out of ten rate the phone the worst they've ever seen. The Lumia series has seen the world's most expensive marketing push by Nokia (more than twice as much marketing dollars than the previous record) added to by the biggest marketing pushes by carriers like the biggest ever launch budget by AT&T. Microsoft threw literally billions more into the pot, including handing out free Xbox 360 videogaming consoles to some buyers of flagship Lumia products. Nokia gave out tens of thousands of free handsets to 'thought leaders' and then engaged with a dirty tricks squad together with Microsoft to go astroturf blogs and intimidate anyone who tried to write anything critical of the Lumia series. Nokia and Microsoft were caught paying volunteers to go write glowing review of Lumias etc.All this was for nothing. The Lumia series has the lowest satisfaction of any Nokia smartphones ever (compared to MeeGo based N9 and N950 which launced at the same time, and have the highest ever). The Lumia series prices collapse within weeks of new models being launched, often sold in bargain-bins. The Lumia series is the first-ever Nokia smarpthone series whose resale value is essentially zero. So 17 out of 20 loyal Nokia customers has already been scared away, and of the remaining 3, two are eager to run away at the first chance they get. That means only 1 out of 20, yes 5% of Nokia's remaining customer base is loyal enough to buy another Nokia smartphone at some point in the future.No wonder Elop is so much in panic, he is now trying to convince analysts that his featurephones running S40 basic phone OS, are somehow 'smartphones' simply because Elop says so. No, Stephen Elop, you do not get to change the rules of the game when you are losing. For those who are interested, I am running a multi-part analysis of the collapse of the Nokia smartphone juggernaut. I am analyzing the world record market collapse, one issue at a time, with one picture at a time. You may enjoy it. Here is the latest installment (with links to the rest of the series). Ok, enough with my daily Nokiarant, you wanted the split of Windows to Symbian, its pretty easy this past quarter, two thirds one, one third the other. For Q4:NOKIA SMARTPHONES SOLD IN Q3 BY OPERATING SYSTEMNokia smartphones on Windows Phone . . . . 67%Nokia smartphones on Symbian/Meego . . . . 33%Source: TomiAhonen Consulting Estimates February 13, 2013 from vendor data and other sourcesThis table may be freely distributedSo what can we say about Nokia? When you go from selling 104 million smartphones profitably to selling 35 millon at massive losses, in only 2 years, the question is not, was this a disasterous performance, the question becomes, why is the CEO still in charge? Is the Board of Nokia in collusion? The Board of Nokia should also be investigated for breaches to its fiduciary duty. And yes, in the past year, Nokia fell from selling 77 million smartphones to 35 million now, literally collapsing sales by falling to less than half in just one year - a year when the industry grew by 41%. And Nokia's losses? During 2012 the losses in the smartphone unit only increased. I wish I could give Nokia a grade worse but all I can do is give them an F- for failing.4TH - BLACKBERRY (ex-RIM) - 33.2 Million smartphone sales, market share 4.8%, Shrunk 37% from 2011, profitable - DLast 8 quarters market share 14% - 12% - 9% - 9% - 8% - 5% - 4% - 3%So the company formerly known as RIM or Research In Motion, which recently renamed itself Blackberry, out of Canada, just after everyone thought it can't get worse than the company did in 2011, has seen its Annus Horribilis in 2012. What partly shaded RIM's disaster, was the train-wreck over in Finland that was Nokia at the same time. Blackberry's collapse in smartphones ranks only as the 6th worst crash in the history of mobile phone handsets. And while the fall did push RIM/Blackberry into loss-making, that is now over, the company is back to generating profits. Its peak market share of 22% is now down to 3%, but finally, after a long wait and delays to the launch, the new OS, BB10 is finally released with the first two smartphone models launched, to very warm reception and high demand. Blackberry's worst days are past. Can the Canadian smartphone maker now turn this around and find growth once again to the iconic smartphone pioneer, that remains to be seen in 2013. But at least the deep fall period is over. I grade RIM's year 2012 as a D, barely passing grade, due to the strong finish and return to profitability.5TH - HUAWEI - 32.0 Million unit sales, market share of 5.3%, Grew 60% from 2011 profitable, BLast 8 quarters market share 3% - 3% - 3% - 4% - 4% - 4% - 5% - 5%Get familiar with this name, the growth trajectory is very strong, as is their market grabbing strategy. Chinese Huawei is now a top 3 telecoms infrastructure vendor (competing with Ericsson and NokiaSiemens Networks) and a top 3 smartphone maker. They have been very successful in using synergies between the two divisions to help sell more smartphones, bundling some with their network deals, especially in emerging world markets. Huawei often also has its phones sold under carrier/operator brands, so the big analyst houses often undercount the total sales of handsets by Huawei. Yet all the major analyst houses agree that by Q4 Huawei had indeed become the third biggest smartphone maker (as I reported on this blog already early last year). Essentially all of Huawei's smarpthone sales are currently on Android. They have been a Windows Phone partner but a very reluctant one, so that at times Microsoft has seemed unwilling to even acknowledge them. However Huawei is now releasing the cheapest Windows Phone smarpthones by any manufacturer, to launch into the Africa market. They may start to pose a real rival to Nokia within the miniscule Windows ecosystem in smartphones. The more interesting play is Tizen, Huawei is committed to launching its first Tizen smartphones this year 2013 and that platform is a real contender for 'third ecosystem' as it has major carrieres supporting it from NTT DoCoMo to Orange to Vodafone to Sprint to SK Telecom as well as many major handset manufacturers in the alliance led by Samsung and Intel. Tizen has the real potential to grow to become the major alternative to Google's Android, and if so, Huawei is particularly well poised to capitalize on that opportunity.Of its 2012 business, Huawei has been squeezing ultra-slim profits out of its business, preferring market share gains to profits. Its handset unit is barely profitable, but being so, this is viable business and Huawei has shown very strong growth, jumping from 8th place in 2011 to 3rd place now. I grade Huawei as a B
HTC on stealth mode ahead of MWC
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