What is the Latest in Mobile?

Most of the results are in for mobile for last quarter, plus the earnings calls are all over. The picture is not pretty. The big picture is that low-cost Android-based suppliers, primarily in Asia, are starting to eat a lot of market share from Samsung (#1) and Apple (#2). There were about 295M smartphones shipped in Q2, a measly 2% up from Q1.

Samsung just reported their worst quarterly profit for a couple of years and gave a guarded outlook for the rest of the year. Samsung probably has the most to lose from cheaper suppliers since they are supplying Android phones and have to be cost competitive with other almost identical phones being made by cheaper suppliers. In the quarter they shipped 74.1M units for about 25% market share. This is down from last quarter in unit terms since they shipped nearly 90M in Q1 (a huge drop) and, given their poor financial results, probably down a lot more in dollar terms due to margin pressure. They also stated that the outlook for the second half of 2014 is “challenging”.

Apple shipped 35.2M units for a market share of 11% down from over 13% last quarter although up slightly in units. It is hard to know if this is problematic or not since Apple’s once a year product release schedule means that it is always weak at this time of year when they have to get rid of all the old inventory and buyers are all holding out for the shiny new model. But Apple has been losing market share (despite slight increases in units shipped) for some time now. But they remain differentiated from Android and the Apps/iTunes is a powerful disincentive to jump ship. Apple remains highly profitable, of course, taking a large part of the entire industry’s profits. With Samsung presumably losing money Apple could be making more profit that the entire industry, just as Samsung and Apple together used to.

Talking of which, Apple has announced an iPhone related press event on September 9th. However there are plenty of rumors all over the web that the release of iPhone6 will not actually happen until October, but I have no idea if any of these are truly reliable. Also, Apple are supposedly pushing for a $100 price increase for iPhone6 that the carriers don’t like, at least in the US where phones are typically subsidized. I guess all will be revealed in a month.

Next are the Asian premier league: Huawei, LG and Lenovo (without Motorola, see below). Different analyst houses have these in different orders, they are pretty close each with around 5% market share, 14-15M units.

Then the Asian first division with Xiaomi, Coolpad and ZTE, also too close to call with around 4% each, around 11M units each.

Xiaomi is 11M units for 4% market share (they claim over 5% and 5th place but that doesn’t seem to match anyone else, although they know their numbers better than the analysts). Not bad for a company that didn’t exist 3 years ago. Their sales are entirely in China, I believe, but they now plan to broaden out into Europe and other parts of Asia. Their trajectory is up and to the right and clearly they have a strong chance to end up several places higher.

Sony is 9th, the lone Japanese entrant with about 8M units and 3% market share.

Motorola had a great Q2 and crept into the top 10 at 10th place, which means that Microsoft/Nokia slips out to 11th. And just to remind you, Google sold Motorola to Lenovo but this result is just for Motorola since the deal has not finally closed yet due to regulatory review. When the deal closes Lenovo/Motorola should be #3 behind Samsung and Apple.

I wouldn’t be surprised if the numbers in a few quarters time are:
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