Nokia and Windows Phone up in calm before iOS Christmas storm

Windows Phone continues its merry march of picking up users at the expense of mobile operating systems that are neither iOS or Android.
Written by Chris Duckett, Contributor

Kantar's latest instalment of its smartphone sales data report has reinforced what many are seeing in the mobile phone space: That Windows Phone is on a market share march and is gaining users from the also-rans of the mobile world.

The headline figure from the report is Windows Phone being within touching distance of 10 percent of all smartphone sales across the five leading Western European economies, being the UK, Germany, France, Italy, and Spain.

For Windows Phone fanatics, the good news is that in Italy, Windows Phone has overtaken iOS in sales for the three-month period that finished on September 30. This is the first time that Windows Phone has managed to overtake iOS in a Western European market.

However, Android continues to have a stranglehold on Western Europe, and has increased its share to 72 percent of sales.

Windows Phone has gained its increased sales percentages during a quiet period of the year for Apple, said Dominic Sunnebo, strategic insight director at Kantar Worldpanel ComTech.

"August is traditionally a quiet month for Apple, as consumers wait for the release of new models, and strong sales of the iPhone 5s and 5c at the end of September did not manage to make up for the lull. The full impact of the new iPhones will be seen at Christmas, when iOS is expected to bounce back strongly in Britain, the US, and Australia."

Sunnebo also pointed out that as the smartphone market in developed countries continues to mature, emerging economies will be the vehicle for growth, a sector where Nokia is better placed than many manufacturers.

"Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian, it now has an opportunity to regain the top spot," Sunnebo said. "The majority of consumers in Latin America still own a Nokia feature phone, and upgrading to an entry-level Lumia is a logical next step."

"Price is the main barrier in developing markets, and the budget Lumia 520 opens the door to smartphone ownership for many."

Lies, damned lies, statistics, and BlackBerry renewals

The beautiful thing with statistics, and especially statistics that are simply percentages with a moving window, is that it is very easy to twist them to suit any arguments.

For instance, take the full graph of Kantar data from October 2011 until now.


As a quick look can see, Android and iOS tend to mirror each other's movements, and Windows Phone is seeing a definite uptick in sales, reaching a new high of 9.3 percent for the mobile operating system in Australia.

The dance of Android and iOS numbers is particularly interesting, as despite the ebbs and flows, the collective total for the two operating systems is quite stable.

However, to produce a graph that will bring a tear to the eyes of Android fans, let's look at the Australian numbers since June this year.

Image: Chris Duckett/ZDNet

What we have here could be titled "The inexorable decline of Android in Australia", and it would look irrefutable were we not to know the context of the previous few years and recognise that Android's sales share behaves like a roller coaster.

The really fun bit, though, is removing the dominant Android and iOS lines and focusing solely on the trio of Windows Phone, BlackBerry, and others, which includes Symbian and other feature phones.

Behold, the Australian resurrection of BlackBerry as the company almost triples its share of sales in one month!

Image: Chris Duckett/ZDNet

The raw percentages are not as exciting, and show that BlackBerry went from a paltry 0.5 percent to 1.3 percent. To get a full appreciation of BlackBerry's dire situation in Australia, before Symbian was removed from Kantar's reports for August, BlackBerry had a sales percentage of 0.3 percent, whereas Symbian was close to quadrupling that number, coming in at 1.1 percent.

BlackBerry fans that need to hold onto a morsel of good news should know that since February 2013, BlackBerry has grown its sales percentage 13 times over. That's 1,300 percent growth in seven months.

This simply amazing growth, once again, lies in the fact that we are dealing with terribly small numbers here: In the three months to February 2013, BlackBerry held 0.1 percent of Australian smartphones sold.

The takeaway from these Australian numbers is that it would be best to wait another couple of months to see whether Windows Phone and BlackBerry can withstand the sales jump that will occur with iPhone 5s sales factored in — anyone who claims that BlackBerry is surging in Australia needs to have a stiff drink and a long lie-down.

Windows Phone can still take some heart; since December last year, the iOS/Android duopoly has lost 6 percent in Australia, and almost all of that flowed directly to the Microsoft-controlled environment.

Where does Windows Phone get its market share?

When comparing Australia's increase in Windows Phone share to the rest of the developed world, Australia appears to be an outlier, as the rest of the world has not experienced any change greater than two points in the percentage that Android and iOS collectively take in smartphone sales.

Looking at the top five Western European economies, it's clear to see that Windows Phone is increasing its share of non-iOS or Android phone sales, but in the time since October 2011, iOS and Android have increased their collective share at the same time.

White spaces marks months denote where the roundup of the "Euro 5" was not reported
Image: Chris Duckett/ZDNet

The unique element of this graph is the large starting percentage of Symbian and BlackBerry, 10 and 12 percent each, that Windows Phone would eat into over the next two years. Android currently sits at a high of 72 percent, and iOS has dropped down to 14.6 percent from a high in December last year of 25.6 percent.

Individually, the five Western European countries have remarkably different tales to tell. Spain is an Android stronghold, where it has clocked over 90 percent of sales since March, and iOS has only fallen below the 5 percent mark, with Windows Phone rising to claim 3.7 percent and be within striking distance of Apple's operating system. Germany's pattern is similar, but Android has 78 percent, leaving iOS to claim 11 percent and Windows Phone actually decreasingly slightly in the past couple of reports to sit at 8.5 percent.

France is following its established Apple love/hate cycle, and is currently reporting only 15 percent for iOS; however, sales of iOS do move by 10 percentage points depending on iPhone releases. Android claims 68 percent in France, and Windows Phone has been steady over the past three reports, on 11 percent.

The UK has the lowest Android sales share, at 58 percent, with iOS on 27 percent and more than double Windows Phone sales, at 11 percent.

Windows Phone's new poster child, Italy, is actually an Android nation, with sales rising to 72 percent over 2013. The bigger surprise is that although Windows Phone has surpassed iOS in this latest instalment of the report with 13.7 percent, it is not the highest number that Windows Phone has reported; that peak was a flat 14 percent over the 2013 new year. Over the same time period, iOS has fallen in Italy from 25 percent of sales to 10 percent for September. Italy is another country where the iPhone 5S sales number in the next month may reverse the Windows Phone surge.

The United States tells a similar story of how Windows Phone gobbled up Symbian and BlackBerry share, but the Microsoft operating system was nowhere near as successful. The US has the largest collective iOS/Android percentage of 93 percent — that percentage has been above 90 percent since May 2012 — with Apple claiming 36 percent to Google's 57 percent. Windows Phone accounted for 4.6 percent of US smartphone sales for September.

Image: Chris Duckett/ZDNet

If you want to see why Windows Phone's global market share numbers are so low despite the impressive numbers posted in this report, then look no further than China and Japan.

China continues to choose domestic manufacturers that make use of the open-source nature of Android and are able to roll out their own operating systems. In the latest report, Android accounts for 81 percent of all smartphone sales in total, iOS is at 14 percent, and Windows Phone sits at 2.5 percent. Local phone makers in China account for 44 percent of all sales, compared to 30 percent at the same time last year.

Dominic Sunnebo said it is a case of Chinese consumers choosing the best-value devices, and consumers opting for high-end local devices over their low-end global competition.

"Chinese consumers are prepared to make a huge investment in their smartphone, with some spending up to 70 percent of their monthly salary on a new device," he said.

"The message for global manufacturers is clear — Chinese consumers demand value, and overpriced entry-levels models no longer cut it against increasingly impressive local competition."

Japan is the home of the most even split between iOS and Android in any country reported, with the pair collectively accounting for a staggering 96 percent of all smartphone sales. Android is the leader on 48.6 percent of sales, and iOS claims 47.4 percent. Windows Phone can barely get a look in, with 0.8 percent of all sales.

Having pored over these numbers, there is a clear trend: Once a customer becomes an Android or iOS user, it is very difficult for any other mobile operating system to pry them away. A user may move between iOS and Android, but the step out to Windows Phone or BlackBerry is a rare event.

Windows Phone gains have mostly resulted from taking sales away from its closest competitors: BlackBerry and feature phone makers. Now that almost all phone sales in developed countries are one of iOS, Android, or Windows Phone, the task will be harder for Windows Phone in the future.

The Australian experience shows that it is possible for Nokia to make headway at the expense of Android and iOS, but the phone maker has had a rash of recent phone releases in the country without any competing iPhone or Samsung releases.

Do keep in mind that this report only deals in percentages, not actual sales numbers. Even though Apple's share increases only once a year, you can be sure that the numbers shifted are massive compared to its competition.

Over the next three months, we will see if Windows Phone really is the next force in mobile phones or whether it was taking over that 10 percent marked as "other".

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