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Tuesday, May 20, 2008

Flattening Symbian shipments - user apathy about smartphones becoming apparent?

I've written before that I had my doubts about the supposed conversion of the world's mobile population to smartphones. And in particular, that many supposed "smartphone shipment" graphs include the use of locked-down smartphone OS's in places like Japan, and smartphones bought just because the user liked the looks of a device, rather than caring about the software.

(Note to US readers: many people buy smartphones in Europe because they're Nokia's or high-end SonyEricssons and have nice design / camera / music functions - but neither know nor care that they're "smart". Many Nokia N95 owners would rather eat their own shoes than look for and downloads apps to their phone). Michael Mace's coruscating post about Nokia's weird attempts to stimulate interest in downloadable apps for handsets in the US is right on the money).

So there's only a small proportion of mobile enthusiasts/geeks who actually WANT smartphones because of applications. Obviously there are people who want (or are given) a particular capability for business use (step forward BlackBerry and some Windows devices), or who buy iPhones because, well, they're iPhones.

So against that backdrop it's interesting to scrutinise Symbian's sales, which look pretty lacklustre to me. It's latest results press release talks up its cumulative 200m deployments, but that hides a less pretty picture looking at shipments:

Q108 - 18.5m
Q407 - 22.4m
Q307 - 20.4m
Q207 - 18.7m
Q107 - 15.9m
Q406 - 14.6m

In other words, sales are down not just seasonally since Xmas, but are even below the level of mid-2007. Against continued shipment growth of the overall market to above 1.1bn phones a year, that's not looking too promising for some observers' expectations of 30% penetration of smartphones in a few years' time.

My personal expectation is that a ceiling of 15%-ish is probably more realistic, with some grey-area definitional fuzziness around what exactly constitutes a smartphone - for example, if it's got a Linux kernel buried down in the guts of the device.

What's behind the fall? I suspect a number of factors. The Wow factor of the iPhone is one. The shift by European operators to 18 month contracts is almost certainly another. I'm not sure on shifts in the mix of OS's in DoCoMo's sales recently. But the main answer has to be that Nokia doesn't seem to be pushing the open OS harder down into the mid-tier. Put simply, customers would rather have that extra $4 of software spent instead on a better camera, or more memory.

7 comments:

Rich said...

I don't agree with your conclusions.

How many new Symbian models has Nokia introduced in 2008? 1? That's why Symbian's numbers are down. It's that simple.

Dean Bubley said...

The question then is "Why has Nokia only introduced just one Symbian model in 2008"?

Possible options are:

- it's just natural lumpiness in their product release cycle
- some Symbian phone projects got delayed / cancelled
- less emphasis on Symbian phone projects vs others

If it's the 3rd option, that would suggest that Nokia sees more profitable places to puts its engineers/money.

Any thoughts?

Anonymous said...

"Why has Nokia only introduced just one Symbian model in 2008?

Any thoughts"

Well, today the local media over here in Finland is reporting that Nokia is planning to release Linux-based phones. I should add that these aren't rumours. One of Nokia's big chiefs said so.

That propably has something to do with your question.

Dean Bubley said...

Interesting, thanks for that. Wouldn't surprise me.

A couple of years ago at 3GSM I casually (half-joking) asked someone on the S60 stand whether the UI could be ported to Linux - he went pale, and suggested I ask someone more official.

Also, there's a big problem with S40 in that it can't do multitasking & background apps very well - rather important for things like push email, music, presence, multi-window IM etc.

... and it's not obvious that Symbian is cheap/easy enough to push really far down into S40 phone territory.

Dean

Marc said...

Dean...

I know all the European guys are gaga over Nokia, but if you have really used an iPhone for any period of time, you can see why Nokia's sales are flattening. Once the most useable and phone-like smartphone platform, S60 is now an also-ran, but still better than Windows Mobile.

The key to iPhone's success was and is usability. Apps are nice, but if they are not usable, then nobody cares if there are 5 or 500,000 apps or whether they are free or not.

With the ever increasing availability of the iPhone in the world, Nokia is in trouble.

RIM is slightly different because they are more of a US phenomenon, and their handsets are very usable. They have a well developed service and service provider channel. Apple will have a tougher time with RIM than with Nokia.

Ram said...

Dean,

I agree with some of the comments here. Symbian is so yesterday. The US market just reported that the only silver lining is the tremendous growth in smart phone shipments courtesy RIM, Apple etc. With RIM upping the ante on its consumer phone lines, Nokia better watch out!

Dean Bubley said...

The mistake is in thinking that Symbian's main competition comes from other smartphone platforms, particularly RIM's.

This is wrong, because most people outside the US do not go out to buy *a smartphone*. They go out to buy *a phone*.

Nokia's principle competition for its Symbian Series 60 devices comes from two sources:

- top-end featurephones from SonyEricsson, LG & Samsung (SE K850i, LG Viewty, Samsung Soul etc)
- Nokia Series 40 devices

BlacbkBerry's are (usually) second phones given to employees who still keey a "personal" handset as well.

One issue that both Apple and RIM need to addess (that Nokia does get right) is that of sales through non-carrier channels. You can't buy an "unlocked" BlackBerry. Mind you, it's possible that Nokia is focusing on this angle *too much* at the moment, to the detriment of its operator relationships.