Gartner

 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 percent of all Android handsets last quarter. So that still leaves 60 percent of the market to other vendors, right? Yes, but according to Gartner none of these other vendors make up more than 10 percent of Android volume. None. In terms of handset brands, Samsung is also now the No. 1 phone maker in the world, ahead of Nokia. Nokia may have the No. 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 dumb phone 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 percent market share
  2. Apple with 23 percent
  3. RIM with 7 percent

These are essentially the top three 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.

What these data mean to Android manufacturers

If you look at the Gartner chart we’ve shown above, it’s crystal clear that most Android manufacturers are not having a lot of success right now. Even HTC, who was a former darling of the stock market, has been getting hurt. At the high end of the market, competing with Samsung is difficult. It’s tough to differentiate from an OS perspective because everyone’s using Android. There are only so many UI skins you can bring forward. I think one way to compete in the Android space is to develop amazingly useful middleware that turns your brand into a platform more than just a piece of hardware. But even then, Samsung is already heading down this path by recruiting Android developers for cloud-based middleware. At the low end, the biggest opportunity remains killing Nokia’s positioning. There is a lot of low hanging fruit here. Symbian is dying, and the only real challengers here are Android and BlackBerry right now. Windows Phone isn’t going after the low end yet, and neither is Apple. The bottom line is that Android manufacturers can’t think of themselves as competing against other Android manufacturers. That’s a recipe for disaster. They need to compete against Nokia’s 20 percent market share or build cloud services that differentiate their product from Samsung at the high end. Otherwise they’ll just be commodity hardware makers who earn no profit. But hey ... that’s still all good for consumer smartphone adoption.

 
There are 29 comments

Saneless says:

Well, they've earned it. They didn't gimp the onboard storage (One X), they didn't neuter the battery on purpose for some devices (Inspire, Incredible), they didn't use the worst camera on a smartphone in years (EVO 3D), and they tried to develop some new screen technology.

And I think most importantly, and HTC noticed, is that they didn't have 49 different devices across every carrier. They had a Galaxy.. and it was slightly different on each carrier, but you expected a galaxy and you got it.

Also, as bleh as touchwiz or any other skin is, I don't think they've ruined the overall experience with obscene bloat like Sense has done.

DarenTx says:

How about you differentiate yourself from your competitors by being the only handset manufacturer to offer your entire line of phones with Stock Android?

You could still offer your phones with a custom skin too if you would like but give the customer a choice.

demontooth says:

Because regular people don't care about stock Android. Probably don't even know what it means.

people on these sites keep forgetting the fact that the average consumer doesn't care about a lot of things we do.

Saneless says:

Yes but when the word is out there, and it is, that HTC won't update your phone or that it will take forever to get an update.. or they've experienced that themselves, why would they bother buying that brand again?

Kaggy says:

Just to add they would prefer better camera app, power widgets in notifications and widgets.
T9 phone search
reject calls with a sms
(If i'm not wrong these don't exist on stock)

And stuff like that.

And things like that don't even matter if you find a popular phone adopted by the dev community.

demontooth says:

I'd rather have cm9 or aokp than stock Android.

IAmSixNine says:

Wow HTC is at the bottom of the list. I didn't expect that.

stsh0502 says:

This is all mobile phones and not just smart phone. Right? So HTC only makes smart phones which is why they are at the bottom.

Mark_Venture says:

Rim only makes smart phones too... but even with all the talk of them dying somehow they still have more market share than HTC?

tluv00 says:

Um......Blackberry Playbook.

rohneas says:

The comment by DarenTX is spot on. After upgrading to the latest load (of crap) on my Droid X, I've been eyeing a Galaxy Nexus because of the stock Androidness. I don't want to be a slave to Motorola+Verizon. Give me a phone that doesn't have a bunch of bloatware apps (Blockbuster, CityID, superflous social networking apps that do the same thing as my preferred apps) or at least let me get rid of them without root or implications down the line.

PS: I don't hate my DroidX. I really like it. But 4.5.621 is buggy, has poor battery life, blocks all rooting methods, and blocks downgrading back (upgrading?) to a better OS. And this is likely the final update for the phone.

Ph00ny says:

Being brutally honest here. I was actually disappointed with the stock android experience on Verizon Galaxy Nexus. May have something to do with the fact that i had a S2 and the Note right before GalNex but it just didn't seem polished as it should and that might be the point of Nexus but that wasn't what i wanted as an end-user

Also I've stopped tinkering with my phones outside of rooting to use TiBu ever since the note and S2 partially. Curious got the best of me at one point ended up flashing my favorite devs' roms just to try it out but that was it. Curiosity and not based on a need

rohneas says:

I appreciate the honesty. Polish is important, but to me it is behind battery life, the camera, and being able to change things that I don't like.

I've had CyanogenMod on my DX for a while, and the sole problem to me was the camera - it was grainy. That was it. Now, with this last update from Verizon and Motorola, I can't even do that.

I'm a number of months away from a new phone, so hearing criticisms about what I might get is good. At least I know what to expect.

h0ruza#AC says:

Real simple... Build a phone that has no compromises (Because Samsung will cut a corner on something somewhere) then Market the hell out of it...

Oh and make a edge to edge 4",4.4" and a 4.8" versions. That's it!

SoreAintya says:

I have a hard time believing these numbers. First, LG and ZTE have better sales than Motorola AND HTC combined?? Not to mention Huawei's "numbers"...
Let's be honest, how many people do you know, right now with a ZTE phone, hell, and who many people do you see with an LG device?
Again, I'm having a hard time buying into these stats, I'm not an HTC Fanboy, but there's no way their at the bottom in sales numbers, not with 48 devices on every carrier.

TazUk says:

These are worldwide figures, so just because those brands aren't popular in your country doesn't mean that they aren't selling well somewhere else, such as South East Asia ;o)

stsh0502 says:

There is more to sales than just the product. Marketing, price, availability. I think the galaxy s 2 sold in part because of marketing and in part because it had much better software performance than htcs line up. With performance narrowing I thinks all about design and marketing. I really don't see many of Samsung software features being relavant. They are a gimic.

Ph00ny says:

Here is my post on PN on a similar topic (How HTC Can “One-Up” The Galaxy S III)

"Without a huge R&D or priority access to components, it's going to be hard to compete on a large scale

Samsung's advantage over HTC is huge even before we get into the final product argument

Screen, NAND storage, SoC... These are all high cost components that many can't produce in bulk and samsung produces all of them.

Another advantage of building things in-house, development time/cost. Optimization in browser/UI between samsung its competitor is getting larger in every iteration of flagship released"

Even going further, I'm actually starting to doubt Samsung's actual need for Qualcomm S4 in LTE devices when Samsung exec has said they want to rely less on Qualcomm and that LTE will be supported in the next Exynos release (maybe he was referring to Exynos 5). Also the fact that they didn't have much trouble adding LTE capability to Verizon Galaxy Tab 7.7 with Exynos Soc. With the announcement from Asus that padfone will be delayed due to the shortage of S4 has me thinking that Samsung as a priority customer for Qualcomm is taking advantage of the situation and using it as an advantage over its nearest competitors

Davest says:

Chris - thank you so much for the intelligently written article! It's concise yet thorough, with clearly-explained points, and - I may tear up a little at this point - you used "data" correctly, as the plural word that it is. It's so refreshing to see content from someone who really cares about good writing. Kudos!

deraildoax says:

I'm pretty sure there has to be something wrong in my head about the management of a wireless division. Because the recipe for success seems so simple. Make a three tier model line, just like HTC did with the One series. It's specs are competitive, it's fit and finish is great. Now approach every carrier in the world, and try to get them to carry all three. Advertise the hell out of your new line, displaying all three new phones in each advertisement. Make an announcement that all three phones are coming to all carriers and when asked why Verizon or Sprint doesn't have one, say "We tried our hardest to provide these handsets to all consumers, but not all carriers wanted to carry each model." You become the phone company of the people, consumers will go to their carrier and ask to see your line up. Quit watering down your brand recognition with naming variations and carrier exclusivity. If each carrier wants to customize a little, let them add a kickstand or larger battery, or color choices. This strategy of simple lineup on as many carriers as possible has worked for the iPhone and the Galaxy S phones. It's easily replicable.

JeremySVilla says:

Samsung has obviously built a economic moat around its business.

3rdpig says:

How about doing it the old fashioned way? By making a better device (nicer designs, better materials and quality builds) and offering customer service that the others don't.

I shouldn't have to have a plastic device with paint that flakes off or battery doors that won't stay on. I shouldn't have to call a carrier for tech support for a device that Moto, Samsung or HTC made.

I want more, I'll pay for more, but unfortunately the only company that offers more is Apple, and I won't buy their products due to their "walled garden" method of business.

Excuse me, but why is this so hard for everyone other than Apple to do?

How do you compete with your own mega-supplier, whose cost advantages are likely insurmountable? Good question. The profit breakdown in smartphones is split between Apple and Samsung with barely any profit amongst those other manufacturers.

Apple has bucketloads of money, and able to spend it which constrains supplies to the little guys. Supposedly they bought the entire worlds' supply of CNC machines some time back for the unibody MacBooks, and it's taken years for competitors to buy enough to make their own laptops. I'm wondering if the internal flash memory on my Nexus One was constrained 3 years ago due to Apple cornering the market back then.

GMJeff says:

I don't believe that Apple offers more, I think they just offer the illusion of more. Their phones feel heavier, but are smaller. They are covered with glass front and back which makes them a hazard to anyone with loose hands. The processor they tout as the fastest out there (S stands for speed) is roughly equivalent to other devices. They give you a 64 gb option because of no memory slot. Like some other devices, no removable battery. Also, as mentioned there is itunes (enough said of that).

Iphone may look and feel solid, but just like newer cars, one 30 mph accident and the cost to fix them requires a jumbo loan (thank goodness for insurance).

Don't get me wrong, i owned iphones for almost 3 years and my wife is using my old iphone 4. I was just tired of seeing people put the device on a pedestal and offer themselves up to it, like it was their savior.

Just remember, there is always something new and better right around the corner.

misterfan says:

Part of why the Galaxy line has sold so well is because of name recognition.

Looking at the automotive industry for example,
there's a reason why Honda keeps the Civic, Toyota keeps the Corolla etc...

If you build a good product, market it, build brand recognition and reputation, it tends to do well when a successor is released. The average common consumer to this day will likely recognize the name "Droid" over "Android", something thanks to Moto and Verizon.

We tear down phones, the average consumer has only a small set list of needs. The rest is marketing / pricing / and all that other stuff.

Eric Rossman says:

The answer to this chart is simple. Last year Samsung solved a fundamental Android issue with enterprise customers, and that is..
.
wait for it
.
.
.
Microsoft Exchange !!!

Every Galaxy Tablet and Galaxy S2-class Phone can be securely connected to enterprise MS Exchange services. This one feature, added by Samsung, has opened the floodgates for Enterprise adoption of only Samsung devices. My company (of 50~60k employees globally) openly states "Only Samsung Android devices comply with internal security and MS exchange protocols".

Subsequently; Windows Phone OS (with this Nokia resurgence) will be the only immediate competition in the enterprise markets, and will show tremendous growth in this next year (given that there are no new damning bugs in WP7.5 / WP8) likely sapping new accounts away from Samsung-Android. What about the "rich-kid" Apple? Apple tries to iron-fist Enterprise customers to purchase additional apps and services to get the functionality that Samsung-Android, and Windows Phone OS, has built in. For large Enterprise customers, cost is the main driving factor making anything but Apple a better solution.

xytherion says:

How about putting up stands in places you have no stores yet? You can never have GLobal Marketshare ifyou only focus on such places. Here, in my country, many people want HTC Phones but why do they have low market share here? NO STORES

kgh00007 says:

By simply providing timely software updates, that would win my support! I'm tired of waiting for ICS for my GT10.1 when Asus and Acer have already updated their tablets!