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Analyzing the world's 12 biggest handset makers in Q4 2012 (and full-year 2012 commentary)

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The numbers are in, and it's time to make sense of the data. ABI Research's Michael Morgan analyzes the world's 12 largest branded cell phone makers in the fourth quarter of 2012, providing sales data as well as insight into their strategy and competitive position in the market.

Though most research firms only list the market's top five handset makers, ABI lists a full top 12 (and the firm is providing shipment numbers for all of the vendors listed).

Further, as 2012 closes Morgan agreed to look back over the full-year 2012 to evaluate the momentous changes that affected the cell phone industry. Morgan shows exactly which firms managed to rise above the noise during last year and which did not.

A few notes: ABI's numbers represent "sell in," or phone shipments into the retail channel, rather than "sell out," or sales to consumers. Further, ABI's ranking only counts phones that carry the manufacturer's brand. Therefore, phones that bandy a carrier's logo without a hint of which company actually built the device are not counted.

And see ABI's first quarter 2009 rankingssecond quarter 2009 rankings , third quarter 2009 rankingsfourth quarter 2009 rankingssecond quarter 2010 rankingsthird quarter 2010 rankingsfourth quarter 2010 rankingsfirst quarter 2011 rankingssecond quarter 2011 rankingsfourth quarter 2011 rankingsfirst quarter 2012 rankings, second quarter 2012 rankings and third quarter 2012 rankings.

(And click here for a look at the fourth quarter earnings season.)

Fourth quarter 2012 market share by OEM

Overall smartphone shipments vs. non smartphones

Fourth quarter analysis from ABI's Michael Morgan

Vendor 4Q 2012 shipments in millions Analysis
Samsung 106.5 In Q4 Samsung has continued to remain on top of the top 10 list with 106.5 million handset shipments and over 63 million smartphone shipments.This record quarter for Samsung comes as no surprise considering it has 23% share of all smartphone shipments and 42% share of Android smartphone shipments.
Nokia 86.3 Of Nokia's 86.3 million handset shipments, only 6.6 million were smartphones…and of those 6.6 million only 4.4 million were Windows Phone devices. ABI Research believes that Nokia's Windows Phone strategy is in  need of a serious change if it wants to remain in existence past 2013. However Nokia is finding some sucess in the feature phone space with its Asha line of 'smart feature phones' that shipped 9.3 million units in Q4.
Apple 47.8 Despite a record Q4 of 47.8 million iPhone shipments, Apple's stock price has taken a large hit because it missed analysts expectations for growth. ABI Research believes that Apple will continue to show slowed growth as it has already reached any consumer that can afford the high cost of its smartphones. The slowing growth has continued to put pressure on Apple to release a low cost iPhone to drive its market share growth into the rapidly growing low cost smartphone market.
ZTE 20.8 With a respectable 20.8 million handset shipments in Q4, ZTE remained in 4th place. Although ZTE's Q4 YoY shipment growth was a mere 4%, the Chinese star is experiencing very strong growth in the sales of its smartphones which reached 11.2 million in Q4. Compared to most of the established top handset OEMs, ZTE's has continued to rapidly purge its dependence on the stagnating feature phone market.
LG 15.4 On a yearly basis LG continues to show a decline in both shipments and market share. However LG has gradually released smartphones that have been increasingly desired by consumers. In Q4 LG shipped  8.6 million smartphones; however LG's purge of feature phone dependence has not come fast enough and the handset unit continues to flirt with profitability.
TCL (Alcatel) 13.4 TCL(Alcatel) continues to come into its own with 13.4 million handset shipments in Q4. As predicted last quarter, TCL has displaced Huawei and become the No. 6 handset OEM in Q4. Furthermore as the Alcatel brand grows in recognition, LG may soon become the next OEM to wonder why it is looking at TCL's back.
Huawei 11.5 It appears that Huawei has reached the limit of its classic low cost handset strategy with a YoY decrease in shipments of 30%. Over the past year Huawei has aggressively focused on the smartphone market and has continued to release increasingly powerful smartphone devices at higher price points. Although it is natural for a sucessful business to move up the value chain, Huawei may have lost its focus on the low end which is increasing ending up in the laps of local competitors such as Lenovo, Yulong and ZTE.
Lenovo 9.5 New to the top ten list and coming in at No. 8 for Q4, Lenovo has experienced breakout shipment growth in 2012. Lenovo has only been making handsets in earnest for about two years and it primarily sells these handsets in its home market of China. Formerly a laptop division of IBM, Lenovo has expanded its expertise and strategy into mobile internet devices and has become a top 3 smartphone OEM in China. The 80% market growth of smartphones in China will give Lenovo another year of strong shipment growth.
Sony Mobile   8.7 With the launch of the iPhone 5 and the continued dominance of the Samsung Galaxy line of smartphones, Sony's smartphone efforts may have been lost in the fanfare of others success. Sony remains in the top ten list at number 9, while others such as HTC and Motorola have lost their ranking for the forseeable future. ABI Research believes that Sony's sequential shipment decline in Q4 signals a need for Sony to immediately bring something new to the table or its position in the top ten will not last through 2013.
Blackberry (RIM) 6.9 Much has been said about BlackBerry's problems and potential as we have waited for the new BlackBerry 10 line of devices. ABI Research believes that the sequential drop in Q4 is more a factor of consumers waiting for the BB10 devices that were released in Q1 2013. While the future success of BlackBerry will depend on the uptake of these new devices, it is expected that a return to strong shipment growth will take some time as BlackBerry  replaces its older BB OS devices with newer, more expensive BB10 handsets. 
HTC 6.1 With shipments continuing to drop, HTC may not be on the top 11 or even the top 12 in Q1. HTC has offered little reason to believe that it has figured out the solution to its rapidly declining market share and shipments. ABI Research believes that HTC's One devices are technically competitive, but without the brand cache of a Samsung or Apple, HTC will have a tough time capturing consumer mindshare. 
Motorola 5.3 As Google continues to make staff cuts to the Motorola brain trust, Motorola continues to disappoint Google shareholders. In hindsight it was inevitable that a hardware company being acquired by a software company would never yield the margins that software investors are accustomed too. Unfortunately, until Google learns the hardware game, Motorola will increasingly become a Verizon dependent brand. 

 

2011 to 2012 change in market share by OEM

2012 analysis from ABI's Michael Morgan

The largest shifts in market share are from Samsung and Nokia. In terms of market share, Samsung's growth has been able to absorb nearly all of Nokia's losses in both handset and smartphone shipments.

The Chinese OEMs (Huawei, ZTE, TCL and Lenovo)  have continued to chip away at the market share losses of OEMs such as BlackBerry and HTC. In total these Chinese OEM have captured 10% of the smartphone market in 2012, which collectively makes them about as successful as Samsung.

Apple only gained 1% market share in 2012 meaning that in terms of shipments, its growth was barely above the growth of the overall market. ABI Research believes that if it is going to continue to outperform the slowing smartphone market, it will need to expand into low cost smartphone that have helped the Chinese OEMs capture a large portion of the market in 2012.

For most OEMs, there remains two paths to growth :
1.) Capture market share from the Chinese OEMs with low cost smartphones
2.) Capture market share from the highly integrated behemoths of Samsung and Apple with differentiated premium smartphones.

ABI Research believes that neither path will be easy for those OEMs that are trapped in the middle.

 

The raw data

 

2012 Q4 Handset Shipment Market Share by OEM
Samsung 23.5%
Nokia 19.0%
Apple 10.5%
ZTE 4.6%
LG 3.4%
Blackberry (RIM) 1.5%
Huawei 2.5%
Motorola 1.2%
TCL (Alcatel) 3.0%
Sony Mobile 1.9%
HTC 1.3%
Lenovo 2.1%
Other 27.5%

 

 

Handset Shipments by Vendor World Market in millions: 1Q-2011 to 4Q-2012
Vendor 1Q 2011 2Q 2011 3Q 2011 4Q 2011 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 2012
Nokia 108.5  88.5 106.5 113.5 417.0  82.7  83.7  82.9  86.3 335.6
Samsung  70.0  74.0  85.0  93.5 322.5  93.8  94.2 102.6 106.5 397.1
LG  24.5  24.8  21.1  20.0  90.4  13.7  13.1  14.4  15.4  56.6
Sony Mobile   8.1   7.6   9.5   9.0  34.2   7.3   7.4   8.8   8.7  32.2
Motorola   9.0  10.6  12.9  10.3  42.8   8.8   8.1   7.3   5.3  29.5
BlackBerry  14.9  13.2  11.8  14.1  54.0  11.1   7.8   7.4   6.9  33.2
Apple  18.7  20.3  17.1  37.0  93.1  35.1  26.0  26.9  47.8 135.8
HTC   9.7  12.1  13.2  10.1  45.1   6.7   8.3   7.1   6.1  28.2
Huawei   9.1  11.9  14.2  16.3  51.6  10.5  10.8  12.1  11.5  44.9
ZTE  15.2  19.6  18.9  20.0  73.6  18.9  19.7  17.6  20.8  77.0
TCL (Alcatel Mobile Phones)   7.7   8.9   9.4   8.1  34.0   7.8  10.8  10.5  13.4  42.5
Lenovo   0.8   0.9   0.9   1.1   3.6   2.3   6.8   6.9   9.5  25.5
Others  71.8  88.0  74.3  70.3 304.3  63.8  81.8  91.1 114.9 351.6

 

 

2011 vs. 2012
  Handset Share Smartphone Share
  2011 2012 change 2011 2012 change
Nokia 27% 21% -6% 16% 5% -11%
Samsung 21% 25% 4% 20% 32% 12%
LG 6% 4% -2% 4% 4% 0%
Sony Mobile 2% 2% 0% 5% 5% 0%
Motorola 3% 2% -1% 4% 4% 0%
BlackBerry 3% 2% -1% 11% 5% -6%
Apple 6% 9% 3% 19% 20% 1%
HTC 3% 2% -1% 9% 4% -5%
Huawei 3% 3% 0% 4% 5% 1%
ZTE 5% 5% 0% 2% 5% 2%
TCL (Alcatel Mobile Phones) 2% 3% 1% 0% 1% 1%
Lenovo 0% 2% 1% 0% 6% 5%