Android and iOS Scream as BlackBerry Turns to Toast

Kantar Worldpanel ComTech has just released its latest market report for smartphones, and the numbers are, well…to be expected. Apple and Android continue to jockey for position relative to the numbers of different devices that are globally available while BlackBerry now appears to be moving into a strong fourth position to Windows Phone’s third place grab – making BlackBerry a strong last among the players that count. Keep in mind that we are only referring to devices here by way of their operating systems. Kantar has specific manufacturer survey numbers as well, but we are not covering them here, so the Android numbers include LG, HTC and Samsung, among others – no, Android and Samsung are not quite that interchangeable.

Kantar runs its research activities in 12 countries: UK, France, Italy, Germany, Spain, USA, China, Japan, Australia, Argentina, Brazil and Mexico. From among them, Kantar Worldpanel ComTech USA runs the largest continuous consumer research mobile phone panel of its kind in the world, and manages to conduct more than 240,000 interviews per year in the U.S. alone. We’re big fans of research panels with particularly large numbers attached to them – the reliability and confidence levels are quite trustworthy for getting an accurate pulse on whatever is being surveyed.

The surveys track many different variables, including mobile phone behavior and the customer journey –which covers the purchasing of phones, mobile phone bills/airtime, purchase sources and phone usage. It is important to note that the data is exclusively focused on the sales within a given 3 month period rather than on general market share figures. Kantar believes that sales shares embody more forward focused trends. Kantar believes that these trends, in turn, most accurately project future market share for the brands covered in any given report.

That said, when Kantar is ready to deliver on a report, we await it with a fair amount of anticipation. Typically these reports cover three months but are not always on a calendar year quarterly cycle. The newest, just-released report, for example, covers a period ranging from December 2012 to the end of February 2013.

For the most part we like to think of it as a way to justify our own thoughts and opinions, and we more often than not expect Kantar’s numbers to fall in line with our own thinking. We suppose one can think of that as the tail wagging the dog, but on occasion the dog reasserts itself and takes back some control. This time around we can safely note that the results of the most recent Kantar survey on mobile device and mobile operating system distributions on a world-wide basis aren’t all that surprising, but – surprises…there were a few.

iOS and Android Roll, BlackBerry Doesn’t

Below is a chart that provides Kantar’s numbers for the four mobile operating systems that currently matter to us. We’ve included China (more specifically urban China) as it represents a starting point for the country, and we’ve included Italy for no other reason than it looks to be the case it is embracing Windows Phone, though we couldn’t tell you why.

Before we get to the two we all want to know most about, note that although BlackBerry has done quite well with its UK-based Z10 launch – BlackBerry itself - keep in mind that until it launched BlackBerry 10 and the new Z10 on January 30, 2013 the company was stilled branded as Research in Motion, hence RIM in the chart - is down a significant 11.7 percent in the UK year over year. BlackBerry had hoped to maintain a relatively strong presence in Britain but it has taken a huge hit.

Clearly, even the UK couldn’t hold on for the extended period of time it took BlackBerry to get the Z10 out the door. It’s true that the Z10 only accounts for some small percentage of sales for the period shown as it was only available in the UK in February but we very much doubt we’ll see any change in the BlackBerry numbers next quarter for the better. A solid amount of that business looks to be going to Windows Phone as it spiked from three to 6.7 percent.

China certainly falls exactly where we have expected it to. Given the number of available Android devices from multiple players – though of course Samsung holds the aces here for the moment, it is no surprise that initial numbers are pushing close to 70 percent there. iOS numbers won’t change unless Apple makes a move to introduce a low end device – the interesting thing we don’t know is what the numbers look like in head to head high end competition – our guess here is that Apple dominates when the low end devices are factored out of the equation.

Then there is Italy. We are surprised by the strong showing of Windows Phone here. From the numbers it isn’t necessarily clear if it is taking some market share from iOS or Android, though more likely it’s iOS that may be taking the hit. We suspect Nokia is behind this dynamic. Germany brings up the rear guard for Windows Phone, and again Nokia should be benefiting here. Android is the significant top dog in Germany as it actually managed to crack the 70 percent barrier – rising a huge 12.2 percent to 71 percent of all smartphones sold there during the survey period.

Finally we return to the United States. Although other research firms have traced a strong upward movement with iOS recently, the Kantar numbers show that Android – no doubt driven by Samsung, has managed to recapture the lead in total market share. There was a significant 9.3 percent swing here as iOS share declined 3.5 percent. Windows Phone registered market share gain and it clearly took share from BlackBerry. BlackBerry only began to ship the Z10 in the United States on March 22, 2013, so it had no impact on the “RIM” numbers shown.

Samsung of course just launched the Galaxy S4 and Apple is beginning to entre that nebulous period when potential buyers of the iPhone 5 are beginning to wonder what’s around the corner on new devices. That means we can expect Android to increase its share when Kantar issues its next report. There are no surprises here, but it will likely not be until the holiday season that Apple will find iOS going through its annual period of resurgence. Did anyone expect anything else here?

Carriers and Brands

Although we haven’t provided any carrier and brand numbers in charts, we can note a few things here that are relevant to the overall numbers presented above. Verizon Wireless remains the top US carrier, with 35 percent of smartphones sold for the same three month period shown above. AT&T remained in second place as is typical, but the company lost some ground to Sprint, which surprisingly increased overall smartphone sales by 2.1 percent, reaching total market share of 15 percent.

Although one might want to attribute this growth to demand for the iPhone from subscribers whose contracts precluded them from getting in on the initial Sprint iPhone launch, it turns out this is not the case. Kantar analyst Mary-Ann Parlato says that “Last month we saw that Android’s increases were thanks to a large increase in Samsung sales within Sprint. This month, though the increases for Samsung are less pronounced, we are still seeing a strong increase in uptake of the brand, which is now definitely impacting on Sprint and its overall share in smartphone sales. Samsung’s own price drops at the back end of 2012 led various smartphone and feature phone users to upgrade to Samsung devices.”

Kantar points out that unlike in other countries, and especially in China, where low cost Samsung device sales have dominated this hasn’t been the case in the United States over the survey period. Samsung’s higher end devices led the sales increase. Kantar notes that among Samsung device buyers over the last year, 52 percent purchased a Galaxy S III, 21 percent bought a Galaxy S II and five percent bought the more recently released Galaxy Note II.

Parlato continues, “It is clearly apparent that Samsung is taking user share from across the competitor set and not just gaining from their own fans –though overall loyalty towards and satisfaction with Samsung continues to grow as well. Of those who changed their phones over the last year to a Samsung device, 19 percent had previously owned a Samsung feature phone, 15 percent had owned HTC devices, 14 percent had owned LG feature phones, 10 percent owned a Samsung smartphone, and 9 percent had owned a BlackBerry.” That qualifies Samsung to be classified as being on a roll.

Finally, Kantar notes that both Motorola and Nokia saw very slight increases in smartphone sales. Motorola is in that same nebulous state the Apple contingent is entering – will Google deliver some “super smartphone” out of Motorola’s group? We don’t know, and Motorola fans may be reluctant to buy until they do know more of what the near term future holds for them. Nokia of course increased sales relative to the growth of Windows Phone in the United States – which as shown in the chart above moved from 2.7 to 4.1 percent. For the most part any market share increases in Windows Phone in the United States will likely be Nokia-driven.

All in all, the results were more or less what we expected. But clearly there were a few interesting twists along the way. Would it be safe to make a little prediction here and to say that we should anticipate Android continuing to add market share? Well, no, we won’t. We do hope BlackBerry makes a positive dent with the Z10 and we’ll repeat what we’ve stated elsewhere – what a damn shame it is that the BlackBerry Q10 is still nowhere to be seen. That’s as far as we’ll go today.