Smartphone futures 2011 2015

Smartphone Futures 2011-2015

© 2010, Portio Research. All Rights Reserved

1


Portio Research Limited.
Published December 2010 by Portio Research Limited © Copyright 2010.
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Contents
Introduction ..............................................................................................................................8
Handset Market Summary ................................................................................................................... 8
Handset Shipments ........................................................................................................................... 8
Handset Revenues .......................................................................................................................... 11
Handset Market Evolution and Emergence of Smartphones ............................................................. 12
Restructuring of the Mobile Handset Market ................................................................................... 14
Emergence of the Smartphone ....................................................................................................... 16
The Aftermath of Recession ............................................................................................................ 17
A Comparison of Asia Pacific and North America ........................................................................... 18
Regions of Strength ........................................................................................................................... 19
Nokia ............................................................................................................................................... 19
RIM.................................................................................................................................................. 20
Apple ............................................................................................................................................... 20
HTC ................................................................................................................................................. 20
Comparison of BlackBerry and iPhone Growth ............................................................................... 21
The Growth of Android OS (Operating System) .............................................................................. 22
Comparison of Android and iPhone Growth .................................................................................... 24

Smartphone Market ................................................................................................................27
Smartphone Value Chain .......................................................................................................32
Key Players in the Value Chain ......................................................................................................... 35

Smartphone Vendors .............................................................................................................37
Market Share of Smartphone Vendors............................................................................................... 37
Regional Market Share of Smartphone Vendors ............................................................................... 38
Nokia.................................................................................................................................................. 41
Apple.................................................................................................................................................. 47
Research in Motion ............................................................................................................................ 53
HTC Corporation ................................................................................................................................ 62
Samsung............................................................................................................................................ 68
Motorola ............................................................................................................................................. 72
Sony Ericsson .................................................................................................................................... 76

Operating Systems ................................................................................................................81
Market Share of Operating System Vendors ..................................................................................... 81
Regional Market Share of Operating System Vendors ...................................................................... 82
Symbian OS....................................................................................................................................... 84
Apple iPhone OS ............................................................................................................................... 87
BlackBerry OS ................................................................................................................................... 90
Microsoft OS ...................................................................................................................................... 93
Android OS ........................................................................................................................................ 96

Applications and Content Market .......................................................................................101
Apple App Store ............................................................................................................................... 102
BlackBerry App World ...................................................................................................................... 104
Nokia Ovi Store ................................................................................................................................ 105
Google Android Market .................................................................................................................... 106
Symbian Horizon.............................................................................................................................. 107
Windows Marketplace ...................................................................................................................... 108
Positioning of Applications Stores .................................................................................................... 109

Summary and Conclusions .................................................................................................112
Positioning of Smartphone Vendors................................................................................................. 113
Positioning of Operating System Vendors ....................................................................................... 115

Appendices ...........................................................................................................................121
Glossary ........................................................................................................................................ 122
Portio Research Classifications ..................................................................................................... 134
Companies Mentioned in this Report ............................................................................................ 135
About the Authors.......................................................................................................................... 138
Also available from Portio Research Limited ................................................................................. 139


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List of Figures
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Handset Shipments – Worldwide (In Million, 2009 – 2015F) ............................................ 9
Worldwide Handset Shipments — Regional Contribution (In Percent, 2010) ................. 10
Worldwide Handset Shipments — Regional Contribution (In Percent, 2015F) ............... 11
Handset ASPs of Leading Vendors (In USD, Q3 2009 – Q4 2010) ................................ 11
Handset Revenues – Worldwide (In USD Billion, 2009 – 2015F) ................................... 12
Market Share of Handset Vendors – Worldwide (In Percent, 2007 – 2010).................... 14
Market Share of Handset Vendors – Worldwide (In Percent, 2007 – 2010).................... 15
Smartphone Shipments as a Percentage of Total Handset Shipments – Worldwide ( In
Percent, 2007 – 2010) .................................................................................................... 17
Smartphone Shipments Growth and Smartphone Share Growth as a Percentage –
Worldwide (In Percent, 2007 – 2015F) ........................................................................... 18
Contribution to Total Worldwide Handset Shipments and Smartphone Shipments – Asia
Pacific (In Percent , 2007 – 2010) ................................................................................... 18
Contribution to Total Worldwide Handset Shipments and Smartphone Shipments – North
America (In Percent , 2007 – 2010) ................................................................................ 19
Worldwide Subscriber Growth – BlackBerry vs. iPhone (In Millions) .............................. 21
OS Shipments (In Millions, 2009-2010) .......................................................................... 23
Smartphone Shipments as a Percentage of Handset Shipments – Worldwide (In Million,
2009 – 2015F)................................................................................................................. 27
Smartphone Shipments – Worldwide (In Million, 2009 – 2015F) .................................... 28
Worldwide Smartphone Shipments — Regional Contribution (In Percent, 2010) ........... 29
Worldwide Smartphone Shipments — Regional Contribution (In Percent, 2015F) ......... 30
Smartphone Value Chain ................................................................................................ 33
Market Share of Smartphone Vendors – Worldwide (In Percent, 2010) ......................... 37
Market Share of Smartphone Vendors – Worldwide (In Percent, 2015F) ....................... 38
Smartphone Market Share — North America (In Percent, Q3 2010) .............................. 38
Smartphone Market Share — Asia Pacific (In Percent, Q3 2010)................................... 39
Smartphone Market Share — Europe (In Percent, Q3 2010).......................................... 39
Smartphone Market Share — Rest of World (In Percent, Q3 2010) ............................... 40
Revenue by Business Segments — Nokia (In USD Billion, 2008, 2009 & 9M 2010) ...... 42
Regional Break-out of Smartphone Shipments — Nokia (In Percent, Q3 2010) ............. 43
Nokia’s Business Development during September 2009 – September 2010 .................. 44
SWOT Analysis – Nokia .................................................................................................. 45
Revenue by Business Segments — Apple (In USD Billion, FY 2008 – FY 2010) ........... 48
iPhone Shipments – Worldwide (In Million, Q2 2007 – Q3 2010) ................................... 49
Growth in iPhone Users (In Million, Q2 2007 – Q3 2010) ............................................... 49
Regional Break-out of Smartphone Shipments — Apple (In Percent, Q3 2010) ............. 50
SWOT Analysis – Apple .................................................................................................. 51
Revenue by Business Segments — RIM (In USD Billion, FY 2009 – H1FY 2011) ......... 54
Growth in BlackBerry User-Base .................................................................................... 57
Regional Break-out of Smartphone Shipments — RIM (In Percent, Q3 2010)................ 58
RIM’s Business Development During March 2006 – September 2010 ........................... 59
SWOT Analysis – RIM .................................................................................................... 60
Revenue — HTC (In USD Billion, 2008 – 9M 2010) ....................................................... 63
Regional Break-out of Smartphone Shipments — HTC (In Percent, Q3 2010) ............... 64
HTC’s Evolution from ODM to OEM................................................................................ 65
SWOT Analysis – HTC ................................................................................................... 66
Revenue by Business Segments — Samsung (In USD Billion, 2008 – 9M 2010) .......... 69
SWOT Analysis – Samsung ............................................................................................ 70
Revenue by Business Segments — Motorola (In USD Billion, 2008 – 9M 2010)............ 73
SWOT Analysis – Motorola ............................................................................................. 74
Revenue — Sony Ericsson (In USD Billion, 2008 – 9M 2010) ........................................ 77
SWOT Analysis – Sony Ericsson .................................................................................... 78
Market Share of OS by Shipments – Worldwide (In Percent, 2010) ............................... 81
Market Share of OS by Shipments – Worldwide (In Percent, 2015F) ............................. 81
Market Share of OS by Shipments — North America (In Percent, Q3 2010) .................. 82



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Market Share of OS by Shipments — Asia Pacific (In Percent, Q3 2010) ...................... 82
Market Share of OS by Shipments — Europe (In Percent, Q3 2010) ............................ 83
Market Share of OS by Shipments — Rest of World (In Percent, Q3 2010) ................... 83
Regional Break-out of Symbian OS Shipments (In Percent, Q3 2010) ........................... 85
Regional Break-out of Apple iPhone OS Shipments (In Percent, Q3 2010).................... 88
Regional Break-out of BlackBerry OS Shipments (In Percent, Q3 2010)........................ 91
Regional Break-out of Microsoft OS Shipments (In Percent, Q3 2010) ......................... 94
Regional Break-out of Android OS Shipments (In Percent, Q3 2010)............................ 97
Apple’s App Store Growth (July 2008 – October 2010) ................................................ 102
Break-out of Available Applications by Type – Apple App Store (In Percent, October
2010)............................................................................................................................. 103
Break-out of Available Applications by Type – BlackBerry App World (In Percent, October
2010)............................................................................................................................. 104
Break-out of Available Applications by Type – Nokia Ovi Store (In Percent, October
2010)............................................................................................................................. 105
Break-out of Available Applications by Type – Google Android Market (In Percent,
October 2010) ............................................................................................................... 106
Break-out of Available Applications by Type – Windows Marketplace (In Percent, October
2010)............................................................................................................................. 108
Break-out of Available Mobile Applications by Free and Paid Application Type – The US
(In Percent, July 2010) .................................................................................................. 110
Positioning of Smartphone Vendors.............................................................................. 114
Positioning of OS Vendors ............................................................................................ 115


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List of Tables
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6

Handset Shipments — Worldwide (In Million, 2009 – 2015F) ............................................. 9
Market Share of Handset Vendors — Worldwide (In Percent, 2007 – 2010) ................... 15
Emergence of the Smartphone.......................................................................................... 16
Regional Break-out of Smartphone Shipments — Nokia (In Percent, Q3 2010) ............... 19
Regional Break-out of Smartphone Shipments — RIM (In Percent, Q3 2010) .................. 20
Regional Break-out of Smartphone Shipments — Apple (In Percent, Q3 2010) ............... 20
Regional Break-out of Smartphone Shipments — HTC (In Percent, Q3 2010) ................. 20
Smartphone Shipments — RIM & Apple (In Million, 2005 – 2010) .................................... 21
Geographical Presence — RIM & Apple (November 2010) .............................................. 22
An overview of Android and iPhone – November 2010 ..................................................... 24
Smartphone Shipments — Worldwide (In Million, 2009 – 2015F) ..................................... 28
Key Players in the Smartphone Value Chain..................................................................... 35
Smartphone Shipments and Smartphone Market Share — Nokia (2009 – 2015F) ........... 42
Smartphone Shipments and Smartphone Market Share — Apple (2009 – 2015F) ........... 48
Smartphone Shipments and Smartphone Market Share — RIM (2009 – 2015F).............. 54
BlackBerry Subscriber Base Growth (FY 2002 – FY 2006) ............................................... 55
BlackBerry Subscriber Base Growth (FY 2007 – Q2FY 2011) .......................................... 56
Smartphone Shipments and Smartphone Market Share — HTC (2009 – 2015F) ............. 63
Smartphone Shipments and Smartphone Market Share — Samsung (2009 – 2015F) ..... 69
Smartphone Shipments and Smartphone Market Share — Motorola (2009 – 2015F) ...... 73
Smartphone Shipments and Smartphone Market Share —Sony Ericsson (2009 – 2015F) ..
..................................................................................................................................... 77
OS Shipments and OS Market Share — Symbian (2009 – 2015F) ................................... 84
OS Shipments and OS Market Share — Apple iPhone (2009- 2015F) ............................. 87
OS Shipments and OS Market Share – BlackBerry (2009 – 2015F) ................................. 90
OS Shipments and OS Market Share — Microsoft (2009 – 2015F) .................................. 93
OS Shipments and OS Market Share — Android (2009 – 2015F) ................................... 96
Android OS-based Smartphone Releases in 2010 (As of October 2010).......................... 98
Most Popular Paid and Free Applications, Apple App Store (The US, October 2010) .... 103
Most Popular Paid and Free Applications, BlackBerry App World (The US, October 2010) .
................................................................................................................................... 104
Most Popular Paid and Free Applications, Nokia Ovi Store (The US, October 2010) ..... 105
Most Popular Paid and Free Applications, Google Android Market (The US, October 2010)
................................................................................................................................... 106
Most Popular Paid and Free Games, Google Android Market (The US, October 2010) . 107
Most Popular Paid and Free Applications, Symbian Horizon (Worldwide, October 2010).....
................................................................................................................................... 107
Most Popular Paid and Free Applications, Windows Marketplace (The US, October 2010) .
................................................................................................................................... 108
Application Downloads for Major Application Stores ....................................................... 109
Strategies of the top smartphone vendors ....................................................................... 112
Key Weaknesses to Top Smartphone Vendors ............................................................... 113
Total Number of Smartphones by Vendor ....................................................................... 114
Comparison of Smartphone Vendors based on Selected Parameters ............................ 118



Chapter 1
Introduction


7


Introduction
Handset Market Summary
Handset Shipments
Handset shipments are influenced by different factors, such as mobile penetration in a given
geography, subscriber additions in a given period, and handset replacement rates 1. Rising
mobile penetration increases the subscriber base, which fuels the demand for handsets; and
higher penetration rates also impact replacement rates.
However, an increase in subscriber base does not always translate to an upward trend in
handset shipments, as was the case during the recent recession. During a recessionary
period, there is typically a downward trend in replacement rates, as subscribers do not
replace their existing handsets as fast as they otherwise would.
During 2009-2010, the total worldwide handset shipments recorded an impressive growth of
12.2 percent year-on-year. Customer spending on handsets is expected to increase in the
coming years, primarily due to:
•
•
•
•

Implementation of new technologies (3G, 4G/LTE) in key geographies including North
America, Europe and Asia Pacific.
Availability of new devices with better features and designs. There have been numerous
product launches in the last year from key vendors including Apple, RIM, Nokia, HTC,
Samsung, Sony Ericsson and Motorola – at varying price points.
Availability of wide device portfolios across different markets, as vendors enter into
region-wide partnerships with MNOs to launch their products across multiple
geographies.
With the increasing popularity of Android OS, there has been rising demand for Androidbased handsets.

With a combination of the above factors, handset shipments are expected to grow at a CAGR
of 6 percent during the period 2010-2015 to reach 1,752.4 million handset shipments by end2015.
The next figure provides worldwide handset shipments for the period 2009-2015.

1

8

Replacement rates: This is the frequency at which mobile subscribers substitute their old handsets with new ones.
Higher replacement rates result in growth in demand. An average replacement rate of 50 percent means average
replacement time for handsets is 2 years.


During 2009-2010, the total
worldwide handset shipments
recorded an impressive
growth of 12.2 percent yearon-year


Figure 1: Handset Shipments – Worldwide (In Million, 2009 – 2015F)

2

2,000
1,687.5

Handset Shipments
(In Million)

1,600.3
1,600

1,375.4

1,307.9

1,752.4

1,481.7

1,165.6

1,200
800
400
0

2009

2010

2011F

2012F

2013F

2014F

2015F

Year
Source: Portio Research Ltd.

F – Forecasted

Handset shipment forecasts for different regions are given in the table below, as are
respective Compound Annual Growth Rates (CAGR). The Rest of World region will witness
the highest growth in handset shipments during 2010-2015, followed by Europe.
Table 1:

Handset Shipments — Worldwide (In Million, 2009 – 2015F)

3

Handset Shipments (In Million)
2009

2010

2011F

2012F

2013F

2014F

2015F

CAGR
(In Percent,
2010-2015F)

Asia
Pacific

521.4

580.9

587.4

614.1

670.5

705.8

740.7

5.0

Europe

226.5

275.0

306.2

338.4

363.5

377.3

379.3

6.6

North
America

143.0

174.7

188.2

202.5

213.0

221.1

228.6

5.5

Rest of
World

274.6

277.3

293.7

326.7

353.4

383.3

403.7

7.8

Total

1165.6

1307.9

1375.4

1481.7

1600.3

1687.5

1752.4

6.0

Region


Regional contributions to worldwide handset shipments during 2010 are given in the next
figure. Asia Pacific is the largest market—accounting for 44.4 percent of 2010 shipments.

2

Note: This report was written in the fourth quarter of 2010. As such, quoted full year 2010 figures throughout this
report use data collected from the first three quarters of 2010 and estimations for the fourth unavailable quarter.
3
Note: The total may not be equal to sum of regional numbers due to rounding-off errors.


9


Figure 2: Worldwide Handset Shipments — Regional Contribution (In Percent, 2010)

21.0%
13.4%

44.4%

Asia Pacific

21.2%

Europe

North America

Rest of World

Owing to a large subscriber base, Asia Pacific is expected to be the region with the highest
contribution towards worldwide handset shipments during the period 2010-2015. However, its
share in total shipments is expected to decrease from 44.4 percent in 2010 to 42.3 percent
by-end 2015. The major reasons associated with the decline include slowing growth in the
subscriber base, lower regional handset replacement rates, and the increasing popularity of
dual/triple-SIM handsets. In India, for example, the share of multiple-SIM handsets increased
to 38.5 percent of total handset shipments in Q2 2010, up from under 1 percent in Q2 2009. 4
Between 2010-2015, handset shipments in Europe and North America are expected to grow
at CAGRs higher than that for Asia Pacific: 6.6 percent and 5.5 percent respectively. The
main drivers for this higher growth are new network technologies in the market, which are
boosting the demand for high-end handsets and are increasing replacement rates (compared
to Asia Pacific). The arrival of Android OS has resulted in increased sales of Android-based
handsets by vendors including Motorola, HTC, Samsung and Sony Ericsson.
Rest of World—comprising Latin America, the Middle East and Africa—is expected to grow at
a CAGR of 7.8 percent during 2010-2015. Growth will be driven primarily by an increase in
the subscriber base, coupled with a wide availability of handsets from leading vendors,
including Apple and RIM.
The forecasts for regional contributions to worldwide handset shipments during 2015 are
given in the following figure.

4

Source: http://teck.in/multi-sim-mobile-phones-38-5-of-total-handset-sales-in-india.html

10


Between 2010-2015, handset
shipments in Europe and
North America are expected to
grow at CAGRs higher than
that for Asia Pacific: 6.6
percent and 5.5 percent
respectively


Figure 3: Worldwide Handset Shipments — Regional Contribution (In Percent, 2015F)

5

21.6%
13.0%

42.3%

23.0%

Asia Pacific

Europe

North America

Rest of World

F – Forecasted

Handset Revenues
Worldwide handset revenues are derived from handset shipments and their Average Selling
Price (ASP). Higher ASPs are attributed to increasing shipments of high-end handsets.
The overall ASPs of leading handset vendors are depicted in the graph below.

Figure 4: Handset ASPs of Leading Vendors (In USD, Q3 2009 – Q4 2010)
240.8

250
223.0

230
208.9

ASP (in USD)

210

192.0

190

150
130
110

207.0

169.0

170

90

104.0

70

80.9
Q3 2009

Nokia

200.0

174.9

148.8
124.0
119.0

198.7

148.8
115.0
106.0
82.2
Q4 2009

Motorola

116.0
108.0

117.0
107.0
79.6

80.9
Q1 2010

Q2 2010

Samsung

125.0

122.0
109.0

112.0

83.9

86.0

Q3 2010

Sony Ericsson

Q4 2010

LG


By end-2010, worldwide handset revenues rose by 19 percent year-on-year, due to factors
including an increase in ASPs of key vendors, rising smartphone shipments, increasing sales
of Android-based handsets, and successful launches of high-end devices by prominent
vendors. Revenue growth is forecast to stabilise during 2010-2015, with ASPs anticipated to
fall in the long-run because of saturation in the handset market.
5

Note: The total may not add up to 100 percent due to rounding-off errors.


11

Revenue growth is forecast to
stabilize during 2010-2015,
with ASPs anticipated to fall in
the long-run because of
saturation in the handset
market.


Average Selling Price
Nokia has seen an increase in ASP mainly due to the growth of sales from high-end handsets
launched during 2010.
The ASPs of Motorola and Sony Ericsson have seen rapid increases since late 2009
primarily due to their focus on high-end handset shipments based on Android OS – including
the Droid series (Motorola) and Xperia series (Sony Ericsson)
Samsung’s ASP has also increased, for the most part due to strong smartphone sales on the
back of more high-end smartphone launches.
Apple and RIM are excluded from this analysis of overall handset ASPs, as they are only
present in the smartphone segment.
Worldwide handset revenues for 2009-2015 are shown below.

Figure 5: Handset Revenues – Worldwide (In USD Billion, 2009 – 2015F)

Handset Revenues
(In USD Billion)

200
160

140.3

149.0

169.1

158.6

6

175.9

180.2

2014F

2015F

118.0
120
80
40
0
2009

2010

2011F

2012F

2013F

Year

F – Forecasted

After a sharp year-on-year decline of 18.5 percent during 2008-2009, handset revenues are
expected to show a CAGR of approximately 5.1 percent between 2010 and 2015.
Handset Market Evolution and Emergence of Smartphones
Mobile services have transformed from an era of only providing voice and messaging
services to a new generation of value-added services including games, video messaging and
location–based services to name a few. This evolution is attributed to factors including:
•
•
•
•

6

Increase in demand for mobile connectivity
Product availability through vendors, MNOs
Evolution of network and handset technologies
MNOs promoting value-added services that can increase their ARPUs

Assumptions: Handset revenue forecasts have been calculated based on the handset shipment forecasts and
expected Average Selling Price for handsets.

12



Handset vendors, according to the varying needs of subscribers in different markets, have
launched handsets with appropriate features and at different price points. Based on pricing
and accompanying features, handsets can be classified into the following categories:
•
•
•

Low-end handsets: These are targeted at subscribers who require basic
functionalities, such as voice and SMS (text messaging).
Mid-range handsets: In addition to basic features, these handsets have functionalities
such as a mid-resolution camera, music player, MMS capability (multimedia
messaging), and provision for external memory.
High-end handsets: This segment includes the following:
o Feature phones: Feature-phones are handsets with a browser (primarily based on
embedded J2ME and BREW platforms) to enable access to web based e-mail, and
sometimes have embedded applications for social networking, instant messaging
(IM) and mobile banking. These phones often come with high resolution cameras,
GPS and innovative multimedia features.
o Smartphones: The major differentiating factor between a smartphone and a
feature phone is the presence of an Operating System (OS). The OS, through its
Application Programming Interface (API), enables subscribers to install and remove
third-party applications. Smartphones generally have large displays and faster
processors, and their operating systems are better integrated with the handset's
User Interface than Java applications.

Handset vendors worldwide are looking to make their products more appealing by enhancing
them with more features. Some features of high-end phones are now available in mid-range
handsets as well; and some features of mid-range handsets are being embedded in low-end
handsets. As a result, boundaries are blurring. And, as we’ve written before, with handset
vendors and MNOs planning to provide more features at affordable prices, moving to featurephones and smartphones might prove to be a natural progression.
Smartphones have been developed to address the growing consumer demand for seamless
PC-like Internet experiences, and requirements for better processing capabilities to support
multi-tasking. Value added and Internet-based services cannot realise their full potential on
mobile handsets without a capable smartphone manufacturing ecosystem with the ability to
provide rich user-experiences. Providing rich user-experiences is significant because the
services launched over smartphones have generally been seen and used before on PCs, and
if the user’s experience does not match or come close to their prior PC-based experience, the
services might not gain traction over mobile handsets.
Furthermore, there are incentives attached with the launch of these services on mobile
platforms and this drives players to invest in research and development for smartphones.
The primary driving factors are as follows:
• Better margins in selling high-end handsets
• Addition of features and capabilities to handsets increases the replacement rate and,
as a result, the demand for new handsets (this factor is more important for pushing
sales in saturated markets)
• Adding differentiating factors keeps handsets ahead of the competition
• Additional revenue generation channels by embedding applications onto the handsets
Key Observations
Significant developments in the worldwide handset market over the past few years have
radically changed the shape and future course of this industry. Developments that have
fundamentally altered market dynamics include the gaining prominence of iPhone and now
Android-based devices, as well as Nokia’s declining smartphone market share. The following
section briefly discusses such developments and their impact.


13

Smartphones have been
developed to address the
growing consumer demand for
seamless PC-like internet
experiences and requirements
for better processing
capabilities to support multitasking


Restructuring of the Mobile Handset Market
With the emergence of new players, the market has undergone major changes in terms of
key vendor positioning. Over the years, these new players emerged as a major threat to
incumbents by increasing their market shares through, for example, new product launches,
exploring geographies, and strengthening application portfolios; vendors who remained static
amidst these market changes lost market share. The section below lists vendors who lost/
gained market share during 2009-2010.
Handset Vendors Losing Market Share
Motorola and Sony Ericsson have seen sharp decreases in market share during the period
2007-2010, with Motorola’s share falling from over 13.9 percent in 2007 to 2.7 percent by the
end of 2010. Market leader Nokia has been facing intense competition from Apple and RIM in
the high-end handsets segment, and other new and existing players for their mid and low-end
handsets.

Figure 6: Market Share of Handset Vendors – Worldwide (In Percent, 2007 – 2010)
45

37.0

38.6

38.4

36.3

Market Share
(In Percent)

36
27
18

13.9
8.3

9

4.9
8.7

8.0

4.7

0
2007

2008

2009

3.4
2.7
2010

Year
Motorola

Nokia

Sony Ericsson

Handset Vendors Gaining Market Share
Samsung, RIM and Apple experienced steadily increasing market share during the period
2007-2010. Samsung has the second largest handset market share worldwide after Nokia,
having held this rank since 2007 when it overtook Motorola.
RIM and Apple are expected to see further growth, driven by new product launches at regular
intervals, expansion in to new geographies, and multiple partnerships with MNOs worldwide.
Samsung’s recent decision to shift to Android-based devices is expected to support its
ongoing growth.

14


RIM and Apple are expected
to see further growth, driven
by new product launches at
regular intervals, expansion to
new geographies, and multiple
partnerships with MNOs
worldwide


Figure 7: Market Share of Handset Vendors – Worldwide (In Percent, 2007 – 2010)
24

21.2
19.5

Market Share
(In Percent)

20
16

17.6
19.6

18.6

16.1
14.2

16.2

12
10.1
8

7.1

4

1.1

0.5
2007

Samsung

2008

LG

3.7

3.0

1.9

1.2
0

9.4

8.3

3.7

2.2

Year

2009

RIM

2010

Apple

Others

The table below highlights the market shares of handset vendors during 2007-2010 and
changes in their market share from 2009 to 2010 in percentage points.
Table 2:

Market Share of Handset Vendors — Worldwide (In Percent, 2007 – 2010)
Market Share (In Percent, 2007-2010)

7

2007

2008

2009

2010

Change in Market Share
(In Percentage Points,
2009-2010)

Nokia

38.4

38.6

37.0

36.3

-0.7

Motorola

13.9

8.3

4.7

2.7

-2.0

Samsung

14.2

16.2

19.5

21.2

+1.7

LG

7.1

8.3

10.1

9.4

-0.7

Sony Ericsson

8.7

8.0

4.9

3.4

-1.5

RIM

1.2

1.9

3.0

3.7

+0.7

Apple

0.5

1.1

2.2

3.7

+1.5

Others

16.1

17.6

18.6

19.6

+1.0

Handset Vendor


7

Note: Compiled market shares may not add up to 100 percent due to rounding-off errors


15


Emergence of the Smartphone
The table below depicts the emergence of Smartphones (in terms of functionality) over the
years.
Table 3:

Emergence of the Smartphone

Vendor

Smartphone

IBM

Simon

Nokia

9000
Communicator

Launch Date

August 1994

September 1996

Description
Simon is a touch-screen phone that
combined the features of a mobile phone,
pager, FAX and PDA

Main applications include Fax, SMS, E-mail,
Digital camera connectivity, Smart
messaging, Web terminal, Contacts, Notes,
Calendar, Calculator, World time clock,
Composer

This was the first phone in North America
that came on Palm OS
Kyocera

QCP 6035

April 2001

RIM

BlackBerry 5810

April 2002

The Palm OS system benefits from the
integrated cell phone by utilizing it as an
attached modem

The most popular feature on the device is
the "Push E-mail Support”

Introduced in 2005, the N-Series platform
gave a new definition to digital media
Nokia

Apple

Google

N-Series (N70,
N90, N91)

iPhone

G1 Android

April 2005

June 2007

September 2008

Some of the prominent features include
megapixel camera, Carl Zeiss optics,
support for 3G, external memory card slot
and MP3 player

iPhone revolutionized the smartphone
industry with new takes on the touchscreen
concept, mobile browsing, and the
installation of third-party software (Apps)

The "Open-source" nature of Android
prompted handset vendors to shift to the
Android platform and launch more
"customized" devices for end users

16



Figure 8: Smartphone Shipments as a Percentage of Total Handset Shipments – Worldwide ( In
Percent, 2007 – 2010)

Smartphones as a Percentage of
Total Handset Shipments
(In Percent)

40
Android-based
phone Launched

30

20

iPhone
Launched

23.1

10
10.5

12.2

2008

2009

29.5

39.7

14.7

2007

26.3

36.1

32.8

0
2010

2011F

2012F

2013F

2014F

2015F

Year


F – Forecasted

The Aftermath of Recession
The market registered an increase in year-on-year smartphone shipments growth, from 16.4
percent in 2009 to 76.5 percent at end-2010. Factors fuelling this growth include increasing
disposable incomes, new technologies, new product launches and availability of products in
key geographies, vendors focusing on expanding their distribution networks, and subsidies
from MNOs.
In 2009, smartphones’ contribution to total worldwide handset shipments increased by 2.6
percent; in 2010 it increased by 8.4 percent. The next figure highlights smartphone shipments
growth during the period 2007-2015.


17

In 2009, smartphones’
contribution to total worldwide
handset shipments increased
by 2.6 percent; in 2010 it
increased by 8.4 percent


Figure 9: Smartphone Shipments Growth and Smartphone Share Growth as a Percentage –
Worldwide (In Percent, 2007 – 2015F)
90

10

75

66.7

8
8.4

Recession

60

6
45
3.2
30

3.2
22.8

15

2.6

1.6

2009

3.2

21.0

19.8

3.3

3.6

16.2

14.1

2014F

2015F

4
2

16.4

2008

19.5

3.2

Smartphone Share
Growth (In Percent)

Smartphone Shipments
Growth (In Percent)

76.5

0

0
2007

2010

2011F

2012F

Smartphone Shipments Growth

2013F

Smartphone Share Growth

F – Forecasted

A Comparison of Asia Pacific and North America
In this section, Asia Pacific, the region with the largest subscriber base, is compared with
North America, the region with the highest smartphone penetration.
The graph below analyses handset and smartphone shipments in Asia Pacific.
Figure 10: Contribution to Total Worldwide Handset Shipments and Smartphone Shipments –
Asia Pacific (In Percent , 2007 – 2010)
46.0

50
37.0

40

35.9

33.6

30

30
20

40

39.1

44.7

41.4

44.4

20

10

10

0

Share in Smartphone
Shipments (In Percent)

Share in Total Handset

50

0
2007

2008

2009

2010

Year
Share in Total Handset Shipments

Share in Smartphone Shipments

Although the Asia Pacific region has observed an increase in its share in total worldwide
handset shipments over recent years, its contribution to worldwide smartphone shipments is
declining. This is primarily due to lower replacement rates of smartphones, and slower
progress on new technology upgrades.

18



The graph below analyses North American handset and smartphone shipments.
Figure 11: Contribution to Total Worldwide Handset Shipments and Smartphone Shipments –
North America (In Percent , 2007 – 2010)
31.1

29.0

30.7

32

24
10

17.0
12.4

5

13.5

16

13.4

12.3

8

0

Share in Smartphone

Share in Total Handset

15

0
2007

2008

2009

Year

Share in Total Handset Shipments

2010

Share in Smartphone Shipments

North America witnessed relatively stagnant growth in handset shipments during 2007-2010.
However, in contrast to Asia Pacific, its share of worldwide smartphone shipments has grown
in this period. The main reasons associated with this growth include higher replacement rates
for smartphones, rapid advancement of technology, and availability of new products.
Regions of Strength
Smartphone vendors worldwide are trying to increase their share in the smartphone market.
Although each vendor is trying to maximise market share worldwide, each vendor has
created particular pockets of influence. The following section explains these pockets of
influence for the four major smartphone vendors worldwide.
Nokia
In Q3 2010, Asia Pacific was the largest smartphone market for Finland-based Nokia. Asia
Pacific accounted for 44.5 percent of Nokia’s worldwide smartphone shipments. Nokia’s
differential advantage in the region is attributed to its market segmentation and wide range of
products, and high brand perception. Unsurprisingly, Nokia tops the list of preferred
smartphone brands in several major markets of Asia Pacific.

Asia Pacific accounted for
44.5 percent of Nokia’s
worldwide smartphone
shipments

Europe is another important smartphone market for Nokia, accounting for 39.2 percent of the
vendor’s worldwide smartphone shipments in Q3 2010. Nokia’s stronghold in the region can
be attributed to its solid distribution network and highly-regarded brand image.
Table 4:

Regional Break-out of Smartphone Shipments — Nokia (In Percent, Q3 2010)

8

Regions
Vendor
Europe
Nokia

Asia Pacific

North America

Rest of World

39.2

44.5

0.8

15.5

8

Note: The regional break-out of shipments for each vendor is calculated on the basis of total shipments in the
quarter, the total shipments in the region, and other information related to market presence of each of the vendors
in different regions. This is an estimated market share


19


RIM
North America continued to be RIM’s key market contributing 46.6 percent to Q3 2010 global
BlackBerry shipments; growth in this region can be attributed to the gaining traction of
prepaid plans. The contributions from Europe and Asia Pacific also increased year-on-year
due to increasing product availability through a greater number of distribution partnerships
and expanding distribution networks.
Table 5:

Regional Break-out of Smartphone Shipments — RIM (In Percent, Q3 2010)

9

Regions
Vendor
UK
RIM

Asia Pacific

North America

Rest of World

20.7

14.9

46.6

17.9

Apple
Aided by great brand recognition, Apple enjoyed continued success with the iPhone in North
America. New product launches at regular intervals and the availability of a wide array of
applications in its App Store has helped Apple maintain market share in the region.
At the end of Q3 2010, North America contributed 43.3 percent of total iPhone shipments. To
increase its market share in Asia Pacific and Europe, Apple has been aggressively partnering
with multiple MNOs to ensure increased product availability.
Table 6:

At the end of Q3 2010, North
America contributed 43.3
percent of total iPhone
shipments

Regional Break-out of Smartphone Shipments — Apple (In Percent, Q3 2010)
Regions

Vendor
Europe
Apple

Asia Pacific

North America

Rest of World

19.9

21.3

43.3

15.6

HTC
The arrival of Android OS has boosted sales of HTC smartphones in North America. North
America contributed more than half of HTC’s total smartphone shipments in Q3 2010. The
latest move to launch Windows 7 phones might further stimulate shipments in this region.
The share of shipments from Europe and Asia Pacific is expected to increase with the gaining
popularity of Android OS. HTC’s strategy has been building and strengthening relationships
with MNOs in the regions that will help in increasing shipment volumes in these regions.
Table 7:

Regional Break-out of Smartphone Shipments — HTC (In Percent, Q3 2010)

10

Regions
Vendor
Europe
HTC

Asia Pacific

North America

Rest of World

20.6

17.6

54.4

7.4

9

Note: Compiled regional break-out of smartphone shipments may not add up to 100 percent due to rounding-off
errors
10
quarter, the total shipments in the region, and other information related to market presence of each of the vendors
in different region s. This is an estimated market share

20



Comparison of BlackBerry and iPhone Growth
BlackBerry and iPhone have achieved extraordinary growth rates since their launch. RIM
launched its first BlackBerry smartphone in 1999 and Apple its iPhone in 2007. The figure
below compares the performance of RIM and Apple through the growth of their user base
Figure 12: Worldwide Subscriber Growth – BlackBerry vs. iPhone (In Millions)

11

72
62.0

BlackBerry CAGR (2007-Q2 2011)
= 69 percent

63

50.7

Users
(In Million)

54
41.3

45
36

35.5
22.3

27
18
9

7.3
0.5
0.1

0.2

1999

2000

2001

0.9

2.2

2003

0.3

2004

4.5

14.8

12.7

iPhone CAGR (2007-Q3 2010)
= 253.9 percent

3.7

0
2002

2005

2006

2007

2008

2009

Q2
2011

Period
BlackBerry

Apple

The table below mentions the smartphone shipments for RIM and Apple during 2005-2010.
Table 8:

Smartphone Shipments — RIM & Apple (In Million, 2005 – 2010)
Smartphone Shipments (In Million)

Vendor
2005

2006

2007

2008

2009

2010

RIM

4.0

6.4

13.8

24.9

32.4

48.1

Apple

NA

NA

3.7

13.7

22.4

49.4


Geographical Presence
BlackBerry devices have been in the smartphone market for more than ten years, whereas
iPhones have been around for only three years now. While Apple out-shipped RIM in 2010,
BlackBerry presently retains a larger geographical footprint than the iPhone. As of November
2010, BlackBerry was available in over 140 countries worldwide and the iPhone was
available in 101 countries.
The geographical presence of BlackBerry and iPhone is shown below.

11
Note: Financial year for RIM concludes at end-February; FY 2010 denotes the period from March 2009 to
February 2010; Q2 FY 2011 denotes the period June to August 2010.


21


Table 9:

Geographical Presence — RIM & Apple (November 2010)
Geographical Presence (Number of Countries, Nov 2010)

Smartphone
Europe

Asia Pacific

North
America

Rest of
World

Total

BlackBerry

41

22

2

75

140

iPhone

36

14

2

49

101


During mid 2008, Apple announced a shift in its distribution strategy to focus on tying up with
multiple operators in key geographies. This ongoing strategy is set against a backdrop of
increasing competition from Android devices. Though RIM scores higher than Apple with
regard to distribution tie-ups, Apple is expected to reduce the lead in the coming years.
Some examples of such multi-operator agreements include:
• Australia: Vodafone and Optus
• Austria: Orange and T-Mobile
• Canada: Rogers Communications, Fido Mobile, Bell, Telus Mobility
• France: Orange, Bouygues Telecom, SFR
• Italy: Telecom Italia and Vodafone
• North America: AT&T, Verizon Wireless (Verizon deal is effective from January 2011)
• Portugal: Orange and Vodafone
• Switzerland: Orange and Swisscom
• UK: O2, T-Mobile/Orange (UK operations of Deutsche Telekom and France Telecom
merged in November 2009)
The switch from the one-operator-per-country model has worked well for Apple. A case in
point is France, where iPhone sales increased significantly after launching with Bouygues
Telecom and SFR in April 2009; Orange had previously been the sole French MNO offering
iPhones.
The Growth of Android OS (Operating System)
The growth stories of Android-based devices and iPhone are quite similar with respect to
phenomenal increases in handset shipments after launch.
The iPhone provided a fresh dimension to the mobile experience by building an App Store
consisting of a wide array of applications. Android has given this space a further boost by
building an open source platform where developers can build and upload applications without
stringent filtering rules.
The open source nature of Android has been highly successful, and has led prominent
vendors to alter allegiances from their existing OS (most notably Symbian) to the Android
platform. The growth of Android has come at the expense of other leading OS vendors’
market shares – including Symbian, RIM and Microsoft.
The figure below shows Android OS shipment growth, compared to other leading OS
vendors.

22


Apple announced a shift in its
distribution strategy to focus
on tying up with multiple
operators in key geographies.
This ongoing strategy is set
against a backdrop of
increasing competition from
Android devices


Figure 13: OS Shipments (In Millions, 2009-2010)

2009

80.9

2010

121.3

Change in Market
share percent 20092010
Symbian

32.4

48.1

-7.1

BlackBerry

22.4

49.4

-3.0

Apple iOS

3.3

Android

8.1

42.7

9.4

Windows

15.1

12.6

20.6

20.5

-2

-0.6

Others


As observed from the figure, Android OS shipments have grown at the expense of leading
OS vendors including Symbian, RIM and Windows.


23


Comparison of Android and iPhone Growth
The table below compares Android and iPhone on a set of features including market
dynamics, growth, SWOT analysis and future outlook.
Table 10: An overview of Android and iPhone – November 2010
Android

iPhone

Owner

Google

Apple

Entry Strategy

Through acquisition of Android in 2005

Building on success of key product
portfolio including iPod, Mac and
iTunes

Total Shipments

42.7 million (end 2010)

49.4 million (end 2010)

Popular Vendor
Tie-ups

HTC, Motorola, Sony Ericsson,
Samsung, LG

Exclusive to Apple

Popular Handsets

Motorola Droid, HTC Desire, Samsung
Galaxy, Sony Ericsson Xperia X10

iPhone 4, iPhone 3GS

Mobile
Applications

109,415

341,997

Strengths

Weaknesses

Opportunities

24

•
•
•
•

Google brand
Choice of a wide variety of devices
Open source platform
Over 109,415 applications in a short
time (from launch till date)
• Developer-friendly OS (in terms of
submitting new applications)

• Multimedia Support: unlike the
popular iTunes application and
market place, Android doesn’t have a
central or cohesive source of
multimedia support
• Reliance on hardware makers for
upgrades: though OS updates are
available from Google, it is up to the
vendors to test the functionality of the
upgrades on their devices
• Lack of Enterprise support

• Multi-vendor tie-ups
• Huge opportunity in Tablet and Ebook reader space
• Smartphone market has a huge
growth potential owing to technology
advancements

• Ability to integrate complete value
chain of design, OS development,
hardware, application software,
and services to come up with
innovative and appealing products
• Brand loyalty to Apple, and large
base of users of other Apple
devices, such as Apple iPod, iPad
and MacBooks, who might be
potential iPhone purchasers
• Lack of product diversification and
high pricing compared to the
competition
• Low penetration in the enterprise
segment
• Delay in product availability across
regions, as exclusive partnerships
might hamper the growth

• Departure from the singleoperator to multi-operator
distribution in some countries is
expected to increase its market
share
• Leveraging expertise in the
consumer segment to tap the
emerging consumer-centric
applications market



Threats

• Platform fragmentation: numerous
customised versions depending on
vendors
• A change in iPhone’s distribution
strategy (wide network of MNOs in
key geographies) might have a huge
impact on the market

Market Dynamics

Android has been gaining OS market
share at the expense of Symbian, RIM
and Microsoft, since its launch in 2008

iPhone has been facing intense
competition from RIM and Android

Distribution
Strategies

Built on an open source platform,
Android is available to a wide network of
vendors and developers.

iPhone’s distribution started on the
basis of “exclusivity”. Currently, the
phone is available with multiple
operators across geographies

• Additional vendors are expected to
release Android-based phones
Future Outlook

• The recent decision of Samsung and
Sony Ericsson to shift from Symbian to
Android has further fuelled the market
for Android phones

• Stringent norms for developers
might force them to shift to
Android
• Expansion of direct sales is
affecting the distributor business

• The number of competitors is
expected to markedly increase.
Apple’s new releases of iPhones
over the years have only been in
terms of software upgrades and
new features, but no new
products.
• Apple might need to diversify
their product portfolio to
withstand the competition from
Android and other smartphone
vendors.

The following chapters cover the developments in the smartphone market. We have
discussed the current market size and expected growth in the smartphone market during
2009-2015 in Chapter 2. The evolution of the smartphone market and the changing scenario
of the smartphone value chain have been discussed in more detail in Chapter 3.


25


Chapter 2
Smartphone Market

26



Smartphone Market
Despite the worldwide economic slowdown, the smartphone market registered a modest
growth rate of 16.4 percent during 2008-2009. In 2010, smartphone shipments grew at an
impressive rate and were the growth driver for the rebound in 2010’s total handset shipments.
The worldwide handset market witnessed a year-on-year growth of 12.2 percent during 20092010, primarily driven by 76.5 percent y-o-y growth in smartphone shipments during the
same period.
This massive growth in smartphone shipments is a result of increasing demand for
smartphones in the western markets of North America and Europe. Also, the emerging
markets of Asia Pacific and Latin America are seeing rising smartphone demand, due to the
wide availability of affordable smartphone devices and supported applications.
The share of smartphones as a percentage of total worldwide handset shipments is showing
an upward trend, as depicted in the figure below.

Figure 14: Smartphone Shipments as a Percentage of Handset Shipments – Worldwide (In Million,
2009 – 2015F)

Share of Smartphone Shipments
(In Percent)

39.7%
40%

36.1%
32.8%

35%

29.5%

30%

26.3%
23.1%

25%
20%

14.7%

15%
10%
5%
0%
2009

2010

2011F

2012F

2013F

2014F

2015F

Year

F – Forecasted

Smartphones accounted for 23.1 percent of worldwide handset shipments during 2010. This
share is expected to grow to 39.7 percent by end-2015.
Smartphones now have a wide appeal to users worldwide, with their attractive features and
availability of innovative applications. These high-end smartphone applications and services
can provide higher ARPU to operators, and hence MNOs are teaming with leading vendors to
bring new smartphones into the market. Prominent examples of such partnerships include
RIM and Apple who are associated with leading mobile operators worldwide to launch their
handsets. The market is expected to witness more of these types of launches from other
leading players including Nokia, Samsung and Sony Ericsson in the coming quarters.


27

Smartphones accounted for
23.1 percent of worldwide
handset shipments during
2010. This share is expected
to grow to 39.7 percent by
end-2015


Smartphone shipments during 2010-2015 are expected to grow at an impressive CAGR of
18.1 percent, compared to a CAGR of 6.0 percent for total handset shipments worldwide.
Smartphone shipments from 2009 to 2015 are given in the figure below.

Figure 15: Smartphone Shipments – Worldwide (In Million, 2009 – 2015F)
800

Smartphone Shipments
(In Million)

695.1
700

609.3

600

524.3

500

437.6
361.7

400

302.6

300
200

171.5

100
0
2009

2010

2011F

2012F

2013F

2014F

2015F

Year

F – Forecasted

The table below provides the regional split of worldwide smartphone shipments.
Table 11: Smartphone Shipments — Worldwide (In Million, 2009 – 2015F)

12

CAGR
(In Percent,
2010-2015F)

Smartphone Shipments (In Million)

Region
2009

2010

2011F

2012F

2013F

2014F

2015F

Asia Pacific

61.5

101.8

124.5

148.6

184.4

217.4

254.1

20.1

Europe

44.4

83.0

107.5

140.9

170.8

192.4

210.3

20.4

North
America

53.3

93.0

101.6

111.4

121.6

130.4

139.2

8.4

Rest of
World

12.3

24.8

28.1

36.7

47.5

69.0

91.5

29.8

Total

171.5

302.6

361.7

437.6

524.3

609.3

695.1

18.1


12

Note: The total may not be equal to the sum of individual components due to rounding-off errors.

28



In 2010, Asia Pacific recorded the largest share – with 33.6 percent – of worldwide
smartphone shipments. The growth in the Asia Pacific region is expected to be driven by
China, where the major operators are involved in the deployment of 3G and above networks.
North America amassed the second highest contribution with 30.7 percent of 2010 worldwide
smartphone shipments.
Regional contributions to worldwide smartphone shipments during 2010 are given in the
figure below.

Figure 16: Worldwide Smartphone Shipments — Regional Contribution (In Percent, 2010)

13

27.4%
30.7%

33.6%

Asia Pacific

8.2%

Europe

North America

Rest of World

Asia Pacific is forecast to be the dominating market in terms of smartphone shipments during
the period 2010-2015, with the market anticipated to grow at a CAGR of 20.1 percent during
this period. The European region is also expected to sustain steady growth during 20102015, with a CAGR of 20.4 percent.
The Rest of World region will help drive smartphone shipments uptake with the strongest
growth rate of 29.8 percent, during 2010-2015, as Internet-based services on mobile
handsets begin gaining traction in the region. North America, although having the highest
smartphone penetration, will witness the slowest regional growth with a CAGR of 8.4 percent.

13



29

Asia Pacific is forecast to be
the dominating market in
terms of smartphone
shipments during the period
2010-2015, with the market
anticipated to grow at a CAGR
of 20.1 percent during this
period


Forecasts for regional contribution to worldwide smartphone shipments during 2015 are given
in the figure below.
Figure 17: Worldwide Smartphone Shipments — Regional Contribution (In Percent, 2015F)

14

30.3%
20.0%

36.6%

Asia Pacific

13.2%

Europe

North America

Rest of World

F – Forecasted

14


30



Chapter 3
Smartphone Value Chain


31


Smartphone Value Chain
The smartphone market value chain consists of the following stakeholders:
• Device and network component manufacturers
• Operating system (OS) vendors
• Smartphone vendors
• Third-party application developers
• Mobile network operators
The increasing demand in the Smartphone market has led to the entry of new players across
the value chain and has intensified market competition. In addition to the new market
entrants, existing players expanded their horizons by venturing into new areas of business
(e.g., ZTE and Huawei launching handsets, HTC planning to launch their App Store etc.).
•
•
•
•
•
•
•

Original Design Manufacturers (ODMs) are looking to become Original Equipment
Manufacturers (OEMs). HTC is a case in point
MNOs and Equipment Manufacturers are launching their own branded handsets either
on their own or through tie-ups with handset vendors. This trend has been observed in
the key markets within Asia Pacific and Europe.
OEMs associating themselves with multiple OS providers to provide more choice to the
end user
With Apps taking centre stage, OEMs and OS vendors are looking at pre-sales
integration of third-party applications and content by embedding them into their
smartphones
MNOs expanded their role from “Service providers” to “Solution Providers”; they are
partnering with OS vendors to launch their own App stores
OS vendors are providing more freedom to the developer community by way of
transparent procedures for selecting or rejecting an app, easing stringent rules etc
Due to the above activities, the role of developers is slowly transforming from being
“mere contributors” to “business partners”

With the arrival of Android OS, the smartphone value chain has seen cosmetic changes in
terms of OEM and OS partnerships. The figure below depicts the role performed by players in
the smartphone value chain.

32


The increasing demand in the
Smartphone market has led to
the entry of new players
across the value chain and
has intensified market
competition


Figure 18: Smartphone Value Chain

Development of Device and Network Components
Network Equipment
Manufacturer

Content Providers

Integration

OEM (Smartphone
Vendors)/ODM

Operating System
Vendor

Pre-sales
Integration

Pre-sales
Integration

Chip Vendor

Third Party
Software/Applications
Developer

Development of
Customised Applications

Partnerships
with MNOs
MNO

Customised OS App Store
for MNO’s Subscribers
MNO App Store

Direct Sales

Direct Download
Subscriber
(Consumer/Enterprise)


The salient features of the smartphone value chain and the scenario at various levels of this
value chain are explained below:
•

Device and Network Components Manufacturers
o The handset industry is primarily vertically integrated. Vendors control the steps in
the production and distribution of products and services and intend to increase their
influence in the market. With the emergence of specialists for various production
and distribution steps, the industry is looking to move out of the vertical integration
paradigm.
o OEMs are tending to outsource components of the phone to specialised companies
called ODMs.
o Hardware innovations alone do not have the ability to provide adequate product
differentiation and hardware is likely to be commoditised quickly in the current
market scenario. Systems integration and supply chain efficiency are likely to
become the effective differentiators in the quickly changing market environment.


33

Hardware innovations alone
do not have the ability to
provide adequate product
differentiation and hardware is
likely to be commodotised
quickly in the current market
scenario


•

Smartphone Vendors
o To increase their shipment share in the highly competitive market, Smartphone
vendors are providing more choice to customers by partnering with multiple OS
vendors.
o The success of Android OS, the launch of the latest OS from Microsoft – Windows
7, and the launch of an updated Apple iOS has indeed helped vendors in
expanding their product range.
o With the help of these OS partnerships, vendors are focusing on providing more inbuilt applications on their handsets as a key differentiating factor in the highly
competitive environment.
o Smartphone vendors intend to leverage their expertise in developing handsets and
Application Programming Interfaces (API) to provide rich mobile user experiences.
o While iPhone has succeeded in providing a new dimension to the mobile web,
Android is helping smartphone vendors by offering ‘customisation’ as a
differentiating factor.

•

MNOs
o The role of MNOs has become vital in the face of increasing competition in the
smartphone market.
o Smartphone vendors are trying to strengthen their distribution network by
partnering with prominent MNOs across all major geographies.
o Some MNOs have expanded their role by introducing more products and services
under their brand. They are launching their own app stores, as this arrangement
enables them to exercise greater control over the service delivery and
management process, and to strike better revenue sharing deals for sales through
their networks.
o Saturated markets (in terms of mobile penetration) have resulted in MNOs
transforming themselves from ‘service providers’ to ‘service enablers’.

•

•

34

Operating System Vendors
o The evolution of OS to ‘open-source’, with Android OS, has removed the barriers
for handset vendors, and now they can launch products on multiple operating
systems.
o To tap the revenue generating potential of applications and services, there is a
need for openness when developing operating systems in the mobile space.
o The open source approach is already being followed by the LiMo Foundation
(supporting Linux-based operating systems for mobile devices), Android and the
Symbian Foundation for platform and applications development.
o The open-source approach is gaining prominence in the market due to the
customisation factor, expected availability of a greater number of apps, and
partnerships with vendors to create new revenue models.
o The emergence of Android has significantly altered the ecosystem, with more and
more handset vendors partnering with Google, for Android OS.
o The operating system and user interface components are separating, and the user
interface is emerging as a key differentiator for the user experience. Therefore, the
importance for developing compelling user interface components is increasing and
there is a need for separating it from the operating system.
Application Developers and Content Providers
o The role of developers is transforming from ‘Contributors’ to ‘Business Partners’,
mainly due to the intense competition in the market.
o Currently, one of the key differentiators between Apple OS and Android OS has
been on the quality of apps. While the market perceives Apple App store to provide
high quality apps (due to the stringent filtering rules), Android is yet to attain a
similar standing. Though Android is slowly catching up with Apple in terms of total
number of applications, it still has a long way to go in terms of gaining popularity as
a preferred app store. Developers have a key role to play in this.
o With easing restrictions in open source platforms, developers can now submit
higher numbers of applications to the OS.


Smartphone vendors are
trying to strengthen their
distribution network by
partnering with prominent
MNOs across all major
geographies


o

o

o

With the increasing success of Android OS, MNOs are directly partnering with OS
providers to launch their own brand products and to provide customised app store
websites for their customers.
The smartphone application market is expected to a play a much bigger role in the
future in terms of
 Defining new revenue sharing models
 Developing new categories of applications according to demand and usage
 Providing more customisable features
Players in the smartphone value chain—such as Apple, RIM, Google, Nokia,
Microsoft, Samsung and HTC—are increasing their efforts for content development
and are facilitating development and distribution of applications. They provide
software development kits to the developers to develop applications compatible
with their platforms. They then make applications available for download through
their ‘Application Stores’.

Key Players in the Value Chain
Table 12: Key Players in the Smartphone Value Chain

Smartphone Vendors

Operating System (OS)
Vendors

Applications Stores

Nokia

Symbian OS

Apple App Store

Research In Motion (RIM)

BlackBerry OS

BlackBerry App World

Apple

Apple iPhone OS

Nokia Ovi Store

HTC Corporation

Microsoft OS

Android App Market

Motorola

Android OS

Windows Mobile Market
Place

Samsung

Linux OS

Symbian Horizon

Sony Ericsson


35


Chapter 4
Smartphone Vendors

36



Smartphone Vendors
Market Share of Smartphone Vendors
The phenomenal growth of the smartphone market has been driven by the ever increasing
popularity of smartphone devices in the developed markets of the US and Europe, along with
increasing penetration in the developing markets of Asia Pacific and Rest of World regions.
The market is witnessing intense competition among smartphone vendors, particularly after
the arrival of Android-based phones. In order to differentiate themselves from the
competition, vendors are focusing on product innovations, to offer attractive and unique
features in their devices, along with aggressive marketing to increase device uptake. New
smartphone launches from leading vendors including Nokia, Samsung and LG are driving
smartphone prices down towards mid-tier price points, further promoting market growth.
Nokia, Apple and RIM are the current top-3 vendors in the smartphone market. The market
share of smartphone vendors during 2010 is given below.

15 16

Figure 19: Market Share of Smartphone Vendors – Worldwide (In Percent, 2010) ,

15.9%
16.3%

8.2%
7.6%

4.4%
33.9%

Nokia

Apple

13.6%

RIM

HTC

Samsung

Motorola

Others


15
16

Note: Market shares of Palm and Sony Ericsson are included in ‘Others’.


37


The forecast market share of smartphone vendors during 2015 is given in the chart below.

Figure 20: Market Share of Smartphone Vendors – Worldwide (In Percent, 2015F)

15.8%

11.0%
10.0%

18.8%

5.9%
4.0%
9.0%

25.5%

Nokia

Apple

RIM

HTC

Samsung

Motorola

Sony Ericsson

Others


F – Forecasted

Regional Market Share of Smartphone Vendors
In some cases, the regional market shares of the leading smartphone vendors vary
significantly from their worldwide market shares. Regional leadership is dependent on several
factors, including consumer purchasing behaviour and purchasing power in a particular
geography, distribution agreements between vendors and regional operators, and the range
of mobile services available to customers etc.
The figures below depict the market share of leading smartphone vendors in North America,
Asia Pacific, Europe and Rest of World.
17 18

Figure 21: Smartphone Market Share — North America (In Percent, Q3 2010) ,

15.9%
0.9%

24.2%

33.0%
26.2%

Apple

RIM

HTC

Nokia

Others

17

Note: The market share for different vendors in the region is calculated by the total shipments in the quarter in the
region and shipment data as available for different vendors. This is an estimated market share.
18

38



Figure 22: Smartphone Market Share — Asia Pacific (In Percent, Q3 2010)

12.8%
7.7%
5.1%
10.7%
50.4%
9.0%
4.3%

Nokia

Apple

RIM

HTC

Sharp

Fujitsu

Others


19 20

Figure 23: Smartphone Market Share — Europe (In Percent, Q3 2010) ,

14.3%
12.8%

7.1%
53.1%
12.8%

Nokia

Apple

RIM

HTC

Others

19

Note: In Figures 22 and 23, the market share for different vendors in the region is calculated by the total
shipments in the quarter in the region and shipment data as available for different vendors. This is an estimated
market share.
20


39


Figure 24: Smartphone Market Share — Rest of World (In Percent, Q3 2010)

14.6%

21

3.4%

14.9%

39.3%

27.8%

Nokia

Apple

RIM

HTC

Others

21

Note: The market share for different vendors in the region is calculated by the total shipments in the quarter in the
region and shipment data as available for different vendors. This is an estimated market share.

40



Nokia
Company Overview

Headquarters: Keilalahdentie 2-4, Nokia Group, Finland
Phone: +358-718-008-000
Fax: +358-718-038-226
Website: www.nokia.com
st

Financial year-end: 31 December
Revenue: USD 13.2 billion (Q3 2010)
Revenue growth: 3.0 percent (Y-o-Y in USD, Q3 2010); 5.0 percent (Y-o-Y in EUR, Q3 2010)
Smartphone Market Share: 32.7 percent (Q3 2010)

•
•
•
•
•

Founded in 1865, Nokia entered the telecom equipment market in 1960.
Nokia delivered its first GSM network in 1989. It launched its first GSM handset in
1992.
In collaboration with Hewlett Packard, the company launched the Nokia Communicator
line in 1996.
Nokia is the world’s largest manufacturer of mobile handsets. Through Nokia Siemens
Networks, it also provides infrastructure and associated services in conjunction with
Siemens. Since its acquisition of Navteq in July 2008, Nokia has provided digital maps.
At the end of Q3 2010, the company had around 128,237 employees across 120
countries worldwide.

Business Segments
Nokia’s business operations are categorised into the three segments as mentioned below:
• Devices and Services: The division is responsible for managing the mobile device
portfolio of Mobile Phones, Smartphones and Mobile Computers, besides developing a
world class suite of internet services under the Ovi brand.
• Navteq: Through Navteq, Nokia acquired a strong position in digital map information
and location-based services for:
o Automotive navigation systems
o Mobile navigation devices
o Internet-based mapping applications
o Government and business solutions
• Nokia Siemens Networks: Formed in April 2007, ‘Nokia Siemens Networks’ (NSN) is
a business entity that combines Nokia’s network business with Siemens’ carrier-related
operations, for both fixed and mobile networks. NSN provides:
o Wireless and fixed network infrastructure
o Communication and network services platform
o Professional services to operators


41

Through Navteq, Nokia
acquired a strong position in
digital map information and
location based services.


Revenue
Nokia’s revenues for 2008, 2009 and 9-months 2010 are given in the figure below:

Figure 25: Revenue by Business Segments — Nokia (In USD Billion, 2008, 2009 & 9M 2010)

Revenues (In USD Billion)

80

0.5

70
22.5

60

0.9

50

17.5
0.9

40

11.5

30

51.6

20

38.7
27.2

10
0
2008

2009

9M 2010

Period
Navteq

NSN

Devices and Services

Worldwide Smartphone Shipments and Smartphone Market Share
Table 13: Smartphone Shipments and Smartphone Market Share — Nokia (2009 – 2015F)
Smartphone Shipments and Smartphone Market Share (2009-2015F)
Nokia
2009

2010

2011F

2012F

2013F

2014F

2015F

Shipments
(In Million)

67.7

102.5

116.5

139.5

151.7

168.2

177.1

Market Share
(In Percent)

39.5

33.9

32.2

31.9

28.9

27.6

25.5


•

In Q3 2010, Nokia shipped a record 26.5 million smartphones worldwide, an increase of
62.6 percent year-on-year.
Nokia’s smartphone market share for 2010 is 33.9 percent—a decrease over its market
share in 2009. 22
Smartphone shipments are expected to grow at a CAGR of nearly 11.6 percent from
102.5 million in 2010 to 177.1 million in 2015.

•
•

Nokia had a worldwide smartphone shipment market share of approximately 32.7 percent
during Q3 2010, down from 37.8 percent in Q3 2009.

22

Note: In our previous report – “Smartphone Futures 2009-2014”, Nokia’s 2008 market share was mentioned as
36 percent, as this figure was given by one of the data sources we used. However, we have since determined
that Nokia’s 2008 smartphone shipments of 60.5 million translated to a 2008 market share of 41.1 percent.

42


Smartphone shipments are
expected to grow at a CAGR
of nearly 11.6 percent from
102.5 million in 2010 to 177.1
million in 2015.


This market share decline is expected to continue during the forecast period to 2015 primarily
because of increasing competition from leading vendors including Apple and RIM, and the
rising popularity of Android-based phones across different regions.
Nokia continued to dominate the Asia Pacific and Europe smartphone markets during Q3
2010. The figure below provides the shipment break-out for all regions

Figure 26: Regional Break-out of Smartphone Shipments — Nokia (In Percent, Q3 2010)

23

39.2%

0.8%

44.5%
15.5%

Total Shipments = 26.5 million
Asia Pacific

Europe

North America

Rest of World

23

quarter, the total shipments in the region and other information related to market presence of each of the vendors
in different region. This is an estimated market share.


43


Nokia’s Emergence as a Smartphone Vendor and a Service Provider for the Enterprise
Segment
The figure below depicts Nokia’s business development during 2009-2010, highlighting its
efforts to expand its presence at various levels of the smartphone value chain.

Figure 27: Nokia’s Business Development during September 2009 – September 2010

FY 2009 (Sept 2009-December 2009)

Development of Products and Services

 Nokia launches Nokia Messaging in Indonesia (Telkomsel), Poland (Orange),
Hungary (T-Mobile)
 Nokia partners with SAP and Giesecke & Devrient to establish a new global
business providing brand protection services
 Nokia launches 5330 Mobile TV edition
 New product launches: X6, 7230, 6700 Slide, N900 (US), E72
 Nokia launches its first TD-SCDMA mobile handset - 6788 - in China

FY 2010 (Jan 2010-Mar 2010)
 Completes the acquisition of Novarra
 Skype was made available for Nokia Smartphones at Ovi Stores
 Nokia launches Nokia Messaging in Turkey (Turkcell),
 Nokia forms Wireless Education venture with Pearson in China

FY 2010 (Apr 2010-Jun 2010)
 Enters into a partnership with Yahoo! to bring integrated web services to customers
across the globe
 Launches Ovi Life Tools in China
 Announces the launch of the N8 smartphone on the new Symbian 3 platform
 Acquires Metacarta Inc.

FY 2010 (Jul 2010-Sep 2010)
 Starts shipment of N8 smartphones
 Global alliance with Intuit to create Mobile Marketing services for small businesses
 Completes the acquisition of Motally Inc.
 Sells Wireless Modem business to Renesas Electronics
 Launches “Touch and Type” design with X3


44



SWOT Analysis

Figure 28: SWOT Analysis – Nokia

Strengths
• Strong awareness of the ‘Nokia’
brand worldwide
• Market leader in the worldwide
smartphone market (33.9 percent for
2010)
• Leader in the Asian and European
markets; highest market share in
handset shipments worldwide
• Efficient distribution network,
especially in emerging countries

Opportunities
• The success of N8 can determine the
future of the Symbian 3 platform
• Growth in emerging countries, where it
has an unrivalled presence
• Capitalise on brand and market share
to establish interactive relationships
with consumers

Weaknesses
• Infrastructure business: merger with
Siemens has not produced the
expected results
• Low influence in the US and Japan
• Decreasing popularity of Symbian OS
• Facing component constraint from
component providers
• No plans to partner with Android OS

Threats
• Fierce competition from Android OS
• Vendors dumping Symbian for Android
• Carriers constantly lobbying to reduce
subsidies in order to stay competitive
• Convergence of Mobile and PCs has
led to competition from new quarters;
prominent players in this segment
include Apple, RIM and Dell


Strategies and Future Outlook
•
•
•

Nokia has responded to the competition from Android-based devices with the launch of
its N8 smartphone, which was developed on the Symbian 3 platform. Nokia is planning
to launch more phones based on Symbian 3.
To support the expansion of the Ovi Suite, in April 2010, Nokia acquired MetaCarta Inc.
(geographical intelligence technology and expertise) and Novarra Inc. (Mobile browser
and Services platform).
In a significant move to bolster the presence of Ovi on the Web, in May 2010, Nokia
entered into an alliance with Yahoo! to leverage Yahoo’s strength in the areas of Email, Instant messaging, Maps and Navigation services.

Competitive Landscape
•
•

In addition to fierce competition from Apple and RIM, Nokia is facing serious
competition on the operating system (OS) front, with a steady growth in Android-based
handsets.
Samsung and Sony Ericsson have also announced their plans to end their association
with the Symbian platform, to instead support Android.


45


The table below highlights the performance of Nokia across different criteria.
Evaluation Parameter

Nokia

Popularity in enterprise segment
Popularity in consumer segment
Success in distribution of service and applications

46



Apple
Company Overview

Headquarters: 1 Infinite Loop, MS 301-4IR, Cupertino, USA
Phone: +1-408-9961010
Fax: +1-408-9960275
Website: www.apple.com
th

Financial year-end: 27 September
Revenue: USD 20.3 billion (Q4 FY 2010)
Revenue growth: 66.4 percent (Y-o-Y for Q4 FY 2010)
Smartphone Market Share: 17.4 percent (Q3 2010)

•
•
•

Apple was established in Cupertino, California in April 1976 and incorporated in January
1977.
Apple and its wholly-owned subsidiaries design, manufacture, and market Mac
computers, portable digital music players, and mobile communication devices; and sell a
variety of related software, services, peripherals, and networking solutions.
The company distributes its products worldwide through its online stores, its retail stores,
its direct sales force, and third-party wholesalers, resellers, and value added resellers. It
sells to consumers and enterprises, educational institutes, and government enterprises.

Business Segments
Apple’s revenues are generated through sales of its products and services in different
consumer categories, such as computers, music devices and smartphones, and related
services and software. Its products and services are given below:
• Devices
o Mac Computers and Accessories – Includes desktop products (iMac, Mac
mini, Mac Pro, Power Mac, and Xserve product lines) and portable products
(MacBook, iBook, MacBook Air, MacBook Pro, and PowerBook product lines)
o iPod – Includes iPod Classic, iPod Nano, iPod Shuffle, and iPod Touch
o iPhone – Includes iPhone (launched in June 2007), iPhone 3G (launched in July
2008), iPhone 3GS (launched in June 2009) and iPhone 4 (launched in June
2010)
o iPad – Tablet (launched on 27 January 2010)
o Apple TV – A set-top video device aimed at pushing sales of content from
iTunes to high-definition (HD) TVs
• Software: Includes Apple-branded operating system and application software, thirdparty software, AppleCare, and Internet services.
• Other content related products and services: This segment focuses on providing
content related products and services, such as iTunes and iPod services and Apple
App Store.


47


Revenue
Apple’s yearly revenues for FY 2008, FY 2009 and FY 2010 are given below. 24

Figure 29: Revenue by Business Segments — Apple (In USD Billion, FY 2008 – FY 2010)

25

Revenues (In USD Billion)

70
9.3

60

5.0

50
40
30
20
10

7.9

0.0

7.2
1.8
9.2

0.0

25.2

6.8

8.3

8.1

14.3

13.9

17.5

FY 2008

FY 2009

FY 2010

0

Period
Mac Computer

iPod

iPhone

iPad

Other products and services

Worldwide Smartphone Shipments and Smartphone Market Share
Table 14: Smartphone Shipments and Smartphone Market Share — Apple (2009 – 2015F)
Smartphone Shipments and Smartphone Market Share (2009-2015F)
Apple
2009

2010

2011F

2012F

2013F

2014F

2015F

Shipments
(In Million)

22.4

49.4

61.5

76.1

95.4

113.3

130.7

Market Share
(In Percent)

13.1

16.3

17.0

17.4

18.2

18.6

18.8


•
•

Apple had shipped 14.1 million smartphones at end-Q3 2010, an increase of 90.5 percent
year-on-year.
Apple’s smartphone shipments are expected to grow at a CAGR of approximately 21.5
percent during 2010-2015.

24

Note: Financial year for Apple ends on 27 September; FY 2010 denotes the one year period ending on 27
September 2010.
25
Note: Other products and services include: music related products and services, Apple-branded and third-party
displays, wireless connectivity and networking solutions, hardware accessories, Apple-branded OS and application
software, third-party software, AppleCare, and Internet services.

48



Uptake for Apple iPhone
Worldwide shipments for iPhone since its launch are given in the figure below.

Figure 30: iPhone Shipments – Worldwide (In Million, Q2 2007 – Q3 2010)
16

14.1

14

Shipments
(In Million)

12
10

8.8
6.9

8
6

4.4

4
2

2.3
1.1

0.3

1.7

8.4

Q1
2010

Q2
2010

7.4
6.0

5.2
3.8

0.7

0
Q2
2007

Q3
2007

Q4
2007

Q1
2008

Q2
2008

Q3
2008

Q4
2008

Q1
2009

Q2
2009

Q3
2009

Q4
2009

Q3
2010

Quarter

The figure below depicts the growth of Apple iPhone users since its launch in June 2007.

Figure 31: Growth in iPhone Users (In Million, Q2 2007 – Q3 2010)
70

Launch of iPhone 4
(Jun-2010)

iPhone Users
(In Million)

60

40

Launch of iPhone
3G (Jul-2008)

30

10

62.0

50.1

50

20

26

Launch of iPhone
(Jun-2007)
0.3

1.4

3.7

14.8

Launch of iPhone
43.0
3GS (Jun-2009)
33.3
28.3
18.6

20.9

10.4
6.1

5.4

0
Q2-07

Q4-07

Q2-08

Q4-08

Q2-09

Q4-09

Q2-10

Quarter

26

Note: The calculation of the iPhone user base incorporates the factor of replacement of previous versions of the
device after the launch of new versions.


49


North America continues to be the major market for iPhones. Europe, Middle East and Africa are
the other major markets in terms of shipments.
Apple also made significant strides in Asia Pacific, which has long been a Nokia stronghold.

Figure 32: Regional Break-out of Smartphone Shipments — Apple (In Percent, Q3 2010)

27, 28

43.3%

19.9%

15.6%
21.3%

Total Shipments = 14.1 million
Asia Pacific

Europe

North America

Rest of World

27

Note: Financial year for Apple ends on 27 September; FY 2010 denotes the one year period ending on 27
September 2010.
28
Note: The total may not add up to 100 percent because of rounding-off errors.

50



SWOT Analysis
Figure 33: SWOT Analysis – Apple

29

Strengths

Weaknesses

• Ability to integrate complete value
chain of design, OS development,
hardware, application software, and
services to come up with innovative
and appealing products

• Lack of product diversification and high
pricing compared to the competition

• Brand loyalty to Apple, and large base
of users of other Apple devices, such
as Apple iPod, iPad and MacBooks,
who might be potential purchasers for
iPhone

Opportunities
• Departure from the single-operator to
multi-operator distribution in some
countries is expected to increase its
market share
• Leveraging expertise in the consumer
segment to tap the emerging
consumer-centric applications market
• Reselling refurbished iPhones might
be an area of potential opportunity*

• Low penetration in the enterprise
segment
• Delay in product availability across
regions, as exclusive partnerships might
hamper the growth

Threats
• Strong growth in Android-based
handsets has intensified competition
• Expansion of Apple’s direct sales is
perceived to be negatively affecting
distributors’ business
• Patent infringement for the product and
features used by iPhone may cause a
leakage in revenue flow for Apple


Strategies and Future Outlook
•
•

Focus on retail business: The shift in focus from single operator to multi-operator (in
a country) is seen as a significant move to attract more retail customers.
Packaging of products and solutions: Apple App store is equipped to offer a wide
selection of third-party hardware, software, and various other accessory products and
peripherals to complement Apple’s own products. At present, Apple is offering more
applications than any of its competitors. In addition to being a differentiator, the App
Store is also contributing significantly to Apple’s revenue.

Competitive Landscape
•
•
•

29

Apple has been successful in making inroads in to the market share of leaders, such as
RIM in North America, and Nokia in Europe and Asia Pacific.
With the success of Android-based phones from vendors including Motorola, HTC and
Samsung, Apple is witnessing a slight stagnation in sales and the market shares of
iPhone. Android-based phones are posing a threat to iPhone in the near to long term.
Apple has successfully launched new products from time-to-time, in a bid to cross sell
its products and thus strengthen its position in the market. Recent offerings include the
iPad, which generated ‘record sales’ after its launch at the beginning of 2010.

*Note: Refurbished Apple products are returned to the company for quality testing and are then resold at a lower
cost. In China, Reuters notes that prices for major refurbished products range from USD 44 (308 Yuan) for an
iPod Shuffle to more than USD 2,047 (14,000 Yuan) for an iMac.


51

Apple has been successful in
making inroads in to the
market share of leaders, such
as RIM in North America, and
Nokia in Europe and Asia
Pacific.


•

Apple has successfully pushed Apple-branded software and apps, generating new
sources of revenue through iPhones. With easing of regulations on developers and
following transparent procedures for selecting or rejecting the apps, the iPhone App
Store is expected to drive the revenues in the highly competitive market.

The table below highlights the performance of Apple across various criteria.
Evaluation Parameter

Apple

Popularity in enterprise segment
Popularity in consumer segment
Success in distribution of service and applications

52


Smartphone futures 2011 2015

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