Mobile 2014 and the Future

The numbers are in now and so we can look at the top suppliers into the mobile market for 2014, and then a look out to what the future might bring. Before getting to the companies it is worth looking just how dominant the Chinese market is, at 32% of the entire world market compared to, for example, US’s 9%. China Mobile alone has more subscribers than the entire US population. Android continues to be dominant on the OS front, although with Apple resurgent this quarter the percentage is down slightly. But for the first time ever, over 1B Android phones were shipped last year out of a total of 1.3B phones, the rest being mostly iPhones.

At the top of the table are Samsung at #1 with 314M and Apple at #2 with 193M. Although Apple and Samsung were neck and neck in Q4 that is an anomalous quarter, just after Apple’s annual new product introduction. Going forward I expect Samsung will move ahead of Apple again as the impact of the new iPhone 6s wears off. Probably the most amazing statistic is that in Q4 Apple made 93% of the profits of the smartphone industry and Samsung made 9%. Some other companies such as Sony and Xiaomi have announced that they are profitable. So there must be a lot of companies losing a lot of money.

At #3 is Lenovo/Motorola with 95M. As you probably know, Lenovo acquired Motorola Mobility from Google last year. People were skeptical when Lenovo acquired IBM’s laptop business but they have made a success of it. I expect them to make a success of the Motorola acquisition too. Unlike with IBM, Lenovo can keep the Motorola name indefinitely so it will be interesting to see how they market themselves. My guess is that they will use the Motorola name in US, the Lenovo name in Asia, and who knows in the rest of the world.

Huawei snuck ahead of Xiaomi for #4 and #5, with 61M and 59M units respectively (so almost a tie anyway). Xiaomi is an amazing story, coming out of nowhere to be #1 in the #1 market in the world, which is the only market in which they sold until recently (they have started to sell in India too). Huawei have built up their business without acquisition which is impressive; they weren’t in the top 10 five years ago.

Bringing up the rear:

• LG (Korea)
• Coolpad (China)
• TCL-Alcatel (pure China, despite the little bit of a French name due to history)
• Sony (Japan)

Sony announced that they were profitable last quarter for the first time for several quarters. But they have also announced that the division is up for sale. They are the only Japanese company that is serious about the market, all the other Japanese manufacturers squabble over the Japanese market and ignore the rest of the world. Controversially, just before Christmas, Palo Alto networks announced that they had found a backdoor in 24 models of Coolpad’s phones which appears to have been installed by Coolpad when they modify Android.

Notable for not being in the top 10 are three famous companies. US/Finland’s Microsoft/Nokia which continues to lose share and is now below 3%. Canada’s Blackberry which is down around 1%. There are rumors (denied) that Samsung is trying to buy them. And Taiwan’s HTC which, as recently as 5 years ago, was #4 ahead of Samsung.

Going forward, assuming Sony is sold, it looks like there are only going to be three countries seriously in the mobile business: Korea (Samsung and LG), US (Apple, and Motorola if you want to count them separately) and China (everyone else).