Symbian

When mobile platforms are discussed, the conversation frequently turns to market share battles between Android and iOS. I've pointed out before that the problem with this reasoning is that market share in a market that's growing at 90% is a false measure of performance.

The more important measure is how much of the non-smartphone market is being taken by smartphones and how fast the whole phone market is growing. Competition with non-consumption is very different from platform warfare.

But even when discussing the rivalry between current platforms, the Blackberry and Symbian are often overlooked as contenders. Windows Phone and iOS come in and out of discussion only on the basis of press releases. The truth is however that Symbian, Windows, Blackberry are not going to disappear anytime soon.  Why is that?

The reason is that when you stop framing the market as rivalry between platforms, you see that many buying decisions are driven by specific device value propositions or jobs that the products are hired to do. For many years smartphones were purchased because they had the best cameras or the best keyboards and users never downloaded any apps or even used data plans.

Later, smartphones were purchased because they allowed for browsing and gameplay. Very rarely did buyers opt for "iOS" or "Symbian". Most buyers don't even know what these words mean. Phones are rarely advertised according to their platforms. (As an aside, the mention of Windows in a PC ad is made possible by Microsoft funding, the same as "Intel Inside." So for platform recognition, someone needs to fund the promotion and that implies some revenue to justify it.)

To illustrate, consider the Blackberry: A product that continues to grow despite a completely different basis of competition from the large screen touch competitors. It comes down to being good at some very specific jobs. RIM continues to grow in certain markets like Latin America and the Middle East on the basis of BBM (RIM’s sales outside the U.S. climbed 94 percent last quarter from a year earlier.)

“A 15-year-old boy who likes a 15-year-old girl, sends her a BBM and he’s able to measure how important he is to her based on the speed of response after the letter turns to an R,” meaning it’s been read, he says. “No one else runs an end-to- end service plan like we do. That’s killer and is why it’s almost a social phenomenon.”

or

BBM is also popular in socially conservative Saudi Arabia where its speed -- messages are typically sent in less than two seconds, according to Morgan Keegan -- has made it a way for teenagers to communicate in a country where religious police bar unmarried couples from meeting in public.

You could argue that the other platforms also allow for free messaging (through free texting apps) but the combination of a low cost device, a data plan and attention to detail (like Message Read notification) gives the Blackberry an edge.

The general purpose smartphone that Google and Microsoft and Apple promote is still not the prevailing view of mobile usage for most buyers. One could also argue that many if not most Nokia smartphones are still being "hired" to do feature phone jobs.

The fact that all these devices are classified as smart and therefore competing misses the point that they are hired for different things.

None of this should come as major surprises, but Gartner's data allows for a bit more granular detail in the overall view of the market. Here are new points derived from Gartner's sell-through data:

• The smartphone market is growing at nearly 100% (96%).

• The overall market is growing at 35%.
• The non-smartphone market is growing at 25%.
• Android grew at 1,340% y/y. iOS grew at 92%, Symbian at 61% and RIM at 40%.
• Platform market shares (below) shows a more even distribution of platform volumes between four main platforms:

• Non-branded mobile phones grew to 33% of the market, with 141% unit growth. This is an alarming figure for the low-end of the market. The unbranded market excludes ZTE and Hauwei which grew below the overall market growth (9.8%, 27% respectively). The implications were most dire for Motorola (-36% units growth), Sony Ericsson (-23%) and LG (-14%). Nokia grew but, at 3.5%, well below market growth.
• In 3Q 2009 41 million smartphones were sold. In 3Q 2010 80.5 million were sold. If we were to split the growth among platforms, nearly half the growth was Android. 27% of the additions were Symbian and 16% were iOS. Only 8.3% of the growth was RIM devices.
• Windows Mobile and Linux were the only smartphone platforms to shrink volumes. However, even though the platform is deprecated, 2.2 million Windows Mobile devices were still sold last quarter -- more than Android sold a year earlier.

Several readers pointed out that in my discussion on the market share of modular vs. inter-dependent market shares for smartphones, Nokia was incorrectly classified as having an inter-dependent software architecture since the Symbian platform is/was a modular component.

The problem is that the relationship between Symbian and Nokia is not that of independent modules. Nominally, the two are independent and mutually exclusive, but, in practice, Symbian has always been so heavily dependent and influenced by Nokia that it's never been possible to declare its governance fully independent.

I won't describe the full history since there are many other sources (good example here.) But I will point out that since Nokia licensed Symbian exclusively and Symbian obtained the vast bulk of license fees from Nokia, the relationship was one similar to a bilateral monopoly.

Nokia's bargaining power over Symbian was always high enough to affect its operations. "Ownership" does not only infer a formal control over equity, and many would agree that Nokia "owned" Symbian even when it held less than 50% of the equity. The relationship was so tight, that even though there were other members of the consortium with board seats, the licensing by Nokia's competitors was always very limited. The only significant non-Nokia revenue for Symbian came from Japan where Nokia did not have a presence.

After Symbian was effectively acquired by Nokia, the ownership became both de jure and de facto. The open sourcing of the Symbian code made it no less a Nokia operation than the open sourcing of Android makes it no less a Google operation.

So for all intents and purposes, the relationship between Symbian and Nokia makes Nokia's smartphone hardware inter-dependent on Symbian's software.

Now, given that the way the products are built in practice may be far from integrated, it would seem that Nokia's management captured the worst of both worlds: Modular implementation of an inter-dependent business. Nokia captured all the downside of modularity (poor integration and polish) without any of the benefits (e.g. flexible supply chain or lower R&D.)

A complete market overview will follow when all the top tier vendors report the last quarter, but in the mean-time here are some data that are available:

Smartphone volumes for Nokia, Apple and RIM:

Whereas Nokia is often criticized for being weak in smartphones, the fact is that they have grown at a decent rate over the last two years. In fact, they've opened a gap with RIM. Apple has increased share but it will take quite a while to overtake Nokia.

So why is Nokia's smartphone performance so under-valued? Partly it's because ASPs have been dropping. A lower price and lower margin is sometimes seen as a sign of weakness. But Nokia has had a strategy of expanding into more price brackets in their core markets (i.e. outside the US). Half of Nokia's smarpthones are sold through distributors not operators and probably end up being sold unlocked and unsubsidized. Price matters in those markets.

The other problem that Nokia takes a beating over is that their products don't get used as smartphones. Many are sold without data plans at all which makes one wonder what exactly makes their phones "smart". So many of these 100+ million/yr.  smartphones are really hired to do a feature phone job. They're "overqualified" and thus underutilized. The statistics in terms of app downloads, browser and ad impressions all lag as a result. The ecosystem suffers.

Lastly, they are all but absent from the US. Due to accidents of history (CDMA) and various mistakes, Nokia never got a foothold in what turned out to be the most important mindshare market. A decade ago the US was a mobile data backwater, with lower data ARPU than Nigeria. It was not a market Nokia felt particularly deserving of investment. In hindsight, this was a big mistake.

But these knocks against Nokia still should not detract from the fact that they do sell a lot of Symbian phones. Distribution still matters as does having 600 operator customers. And in many parts of the world, Nokia is synonymous with mobile phone. Many of those buyers will migrate to future Symbian devices.

My mobile platform thesis has been that as long as penetration is not 80% and as long as operators are still in the value chain, mobile platforms will remain fragmented and split shares. The graph above shows exactly how that has evolved among the top three smartphone vendors.

Apple's "Back to the Mac" was a clever play on words. Everyone expected it to mean that the event was going to focus back on new Mac products.  As we had been so steeped in iDevice news the Mac was feeling neglected. It was time to take the discussion "back to the Mac."

Instead Apple told us that the Mac and OSX were going to become more like Devices and iOS. iOS innovations were what's going "back to the Mac"

So it wasn't "back to talk about the Mac" it was "OSX went to iOS and iOS is going back to OSX." The strategic upshot of it is that "the Mac is an extension of the device portfolio." Heady stuff. We'll need to chew on this for a while.

But some implications are easy to foresee. For example, the consequences for competitors. When Apple launched the iPhone, competitors followed suit, powering their phones with a variety of "open" operating systems. When Apple launched the iPad, competitors followed suit, powering their devices with a variety of "open" operating systems. These reactions to Apple's initiatives by dozens of "open-wielding" competitors are all being touted as the inevitably winning strategies.

So, as we've observed all of Apple's strategies being copied, I can't wait to see the competitors follow its "back to the Mac" strategy:

• It won't be long before Dell takes UI and hardware design elements from the Streak "back to the PC." Think of the magic that will happen when Android Froyo "hooks up" with Windows 7.  Both Android and Windows being "open", if I squint hard enough I can just visualize the tweet from Andy Rubin of the command line to build a new Windows  8 with Android mojo. The Android Market selling Windows Apps. It will be beautiful.
• Or perhaps we'll soon see "back to the Blackberry" as RIM takes QNX interface elements back to their core business. Not so sure about the command line make statement there.
• Or maybe Nokia will announce "back to Symbian" as they take gestures from the ultra-open MeeGo to do an evolution of their majestically open Symbian.

These initiative will surely be helped by the vast community of open developers surging to support the great open merged PC/tablet/device future.

As a clue to the sarcasm challenged: The power of Apple's integrated approach across its product lines goes deeper than the user experience.

Sony Ericsson is to stop making smartphones featuring Nokia’s Symbian operating system.

The move means that the troubled Finnish mobile maker is likely to be the only significant user of Symbian.

Analysts said Sony Ericsson’s decision confirmed the “failure” of Symbian as an open source platform, given that it was supposed to be used by several large mobile makers.

via FT.com / Technology - Sony Ericsson to stop using Symbian system.

While Android and Windows Phone continue with a licensing model, the list of abandoned licensed mobile operating systems grows:

• First there was the original PalmOS/Garnet OS (from Access), licensed in its day by several vendors including Samsung.
• Then came SavaJe that was dead on arrival.
• Then there was Windows Mobile with over a thousand devices and hundreds of licensees. Now a fading memory.
• There's LiMo, licensed by operators but not not seen in the wild.
• And now the mighty Symbian is standing with no takers (except its own parent).

Note that MeeGo, WebOS, BlackBerry OS and Bada are not licensed.

In 2010, as Windows Phone is not yet shipping, it's clear that for any vendor without their own operating system, Android has been the only choice.

The question I have is: how long before every top tier vendor has their own OS?

With the number of active Nokia service users now reaching 140 million worldwide, the company today announced that more than 200,000 people are currently signing up daily to Ovi, and that Ovi Store has reached the milestone of 2.3 million downloads per day. Available in more than 190 countries,

via Nokia Ovi Services Continue to Grow.

Nokia updated its tally of download rates so we can put the numbers side-by-side with Apple's iTunes.

The slope of the Ovi curve does not yet compel one to get excited over the platform's prospects in the near term. However to get a true picture, one needs to not only look at absolute download numbers but also the probability of any one user or device being used to download an app.

For this we need to note how the number of devices relates to the download rate. Apple announced recently that they sold 120 million devices running iOS. Not all those devices are still in use.  If we remove 20 million from that total we get approximately 100 million iOS devices. Nokia, on the other hand, specified exactly how many devices can access the Ovi store: 140 million.

Therefore 100 million iOS devices download at a rate of 17.7 million per day while 140 million Symbian devices download at the rate of 2.3 million per day.

That puts the weekly download rate per device at 1.24 for iOS users vs. 0.12 apps (or whatever is the appropriate content item for Ovi) every week for Symbian users.

As the table below details, the rate of downloads per device for iOS is more than 10x higher. This is the more interesting number if you are a developer.

If someone can point me to Android Market download rate (historic and/or current) I can add it to the mix.

ZDNet reports Sony Ericsson are abandoning Symbian for Android, and Samsung headed down the Android and Bada road a while back. There are precious few device manufacturers remaining as foundation members, e.g. ZTE, Sharp and Compal, none of whom are exactly trend-setting industry leaders.

via The Symbian open source experiment has failed [Gartner].

I was going to ask what happened to 'Open always wins?' but decided against it.

What I will say is that open sourcing Symbian was not a new beginning for the platform but the beginning of the end. I don't think anybody seriously considered it a viable multi-vendor platform, least of all Nokia.

Following up on survey data showing that up to 25 percent of Americans have moved to smartphones, here is another survey (Comscore) which shows that US smartphone users are at about 23 percent.

Comscore also surveyed European countries, and we can compare the popularity of smartphones vs. the US.

I also indexed the share to population to show the relative populations of smartphone users across these countries.

It may come as a surprise to some that smartphones are more popular in the UK, Spain and Italy than in the US. Considering that these are countries with lower levels of disposable income, and that in Italy and Spain pre-paid plans are overwhelmingly more popular. Buyers in those countries are much more likely to pay full, unsubsidized prices plus 20% or more VAT. Overall the price differential for an Italian buying a smartphone vs. an American is likely to be a factor of 5. It gets even more peculiar when you consider that many Italians have more than one phone, with overall phone line penetration above 100%.

The explanation for this remarkable appetite for smartphone goodness is the early lead that Symbian had in Europe. Buyers who entered the phone market ten years ago became accustomed to upgrading their Nokia phones. Symbian phones were aspirationally positioned as feature-rich camera and messaging devices. Many were also purchased without data plans and were thus used as high-end feature phones. In other words, consumers in those countries were comfortable paying full price for unlocked Nokia devices and using them with multiple SIM cards.

This can be seen in the share of Symbian in these charts:

The data points to how normative behavior evolved and how different that can be even among culturally aligned Western nations. When looking at Asia and South America, it gets even more interesting.

Whereas in Europe it was Symbian, in the US RIM got the ball rolling.

The contribution of these platforms in shaping expectations, not to mention pricing, for the iPhone and Android should be noted.

Gartner in 2006 predicting mobile OS future.

"Interest in Windows Mobile 5.0 has grown steadily, and it now attracts far more developers than any rival mobile operating system. This should improve the likelihood of IT directors being able to buy line-of-business mobile applications for the Microsoft platform. More than 10,000 developers are currently working on applications for Windows Mobile 5.0. Part of the reason for this developer momentum is Microsoft's programming model. Nick Jones, vice-president at analyst firm Gartner, said, "Every device using Windows Mobile 5.0 has the same interfaces, but that is absolutely not the case with other operating systems, such as Symbian."

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via Gartner Says WM Can Empower Your Developers.

A piece by Gartner that has a typical Gartner conclusion: WM 5 is going to grow the WM Developer community because of device-by-device similarities, and more freedom than RIM or Nokia devices can give.

Love the "every device using Windows Mobile 5.0 has the same interfaces" dig at Symbian. That was four years ago. This week Gartner predicts the fragmented but magically open Android will dominate four years from now.

I had to do some digging to find this to contrast to the recent Gartner prediction that Symbian will be the market share leader in 2014.

The following article appeared in 2003:

Symbian will lose smartphone battle

By Rob Jones at Gartner Symposium ITxpo, Cannes [07-11-2003]

Microsoft's standardised handsets will win the day, says Gartner

Analyst Gartner has warned that, without a concerted effort by Symbian and its backers, Microsoft will sweep them aside in the smartphone business.

Redmond's ability to offer standardised handsets which are easier for businesses to support and use will help the software giant win corporate approval, the market watcher predicted.

Nick Jones, vice president and research fellow at Gartner, said that, while Microsoft did not have a good corporate smartphone today, he believed it would do by the end of 2004.

The analyst predicted that Microsoft will ship a phone boasting strong integration of a range of packages, such as Exchange and Outlook.

Symbian, he added, needed to resolve a number of issues to be a credible, corporate alternative. Its platform and menus differ slightly on various handsets, which means that they often do not have the same user interface.

"Symbian is not very committed to fixing this problem. So Microsoft is getting stronger and Symbian is not addressing the corporate market," explained Jones.

"This is unattractive for chief information officers. They need standard systems and that's what Microsoft will provide.

"If by the end of next year Symbian hasn't solved its problems, Microsoft will be a very strong competitor for a standard corporate smartphone.

"Symbian could lose the battle and at the moment I'd have to say it will probably happen."