Monday, January 5, 2009

So Nokia is world's biggest computer maker in 2008

So yes, its time for yet another instance of mobile phones taking surprising victories in the digital convergence battle. I reported the general trend in my previous posting, and the conclusion that when only considering "smartphones" - even by that tight measure of these new "pocket computers" - the numbers have tilted this year, and now for 2008 the world's biggest computer maker is no longer Hewlett-Packard or Dell, it is Nokia.

Today I dug up the various numbers as best as I could (using Gartner, Analsys, IDC, Apple). I included all PC sales, all smartphone sales, all stand-alone PDA sales, and estimated also mainframe and mini computer sales into the total, and arrived at a total computer sales figure for the last four quarters (from October 2007 to September 2008) of 465 million. Note that PCs account for 300 million of those, so when we add the smartphones we are going about 50% bigger in the overall picture. But I think it is a fair measure to include smartphones (see below).

So here is the breakdown according to my analysis of the biggest computer makers in the world in 2008:

Nokia 64.1 Million units 13.8% market share
HP 55.2 Million units 11.9% market share
Dell 43.8 Million units 9.4% market share
Apple 35.0 Million units 7.5% market share
Acer 30.8 Million units 6.6% market share
Lenovo 22.1 Million units 4.7% market share
RIM 19.8 Million units 4.2% market share
Toshiba 12.9 Million units 2.8% market share
Others 181.9 Million units 39.1% market share

Total 465.5 Million units 100.0%


First note on Apple. I also was very generous with Apple, I not only added their official numbers for Macintosh PC and notebook sales, and iPhone sales, but also the iPod Touch is another equivalent "pocket computer" and could be considered a PDA just as easily as a media player. Because it includes the ability to download applications and otherwise is a valid computer, only very small, I am including it.

But Apple does not release iPod breakdowns in sales, and no analyst is supplying them either. So I made a very rough estimate - and simply because there are four models of iPods available (Touch, Classic, Nano and Shuffle) - I attributed one quarter of all iPod sales to the Touch. I am pretty sure that is way too much, considering that the Touch is at the top end of the price range and costs nearly five times as much as the cheapest Shuffle - but with these numbers Apple would be fourth biggest computer maker. It is relatively close to Acer, so if my math is badly of, then Apple may fall down one peg. The distance to Dell is too much that its extremely unlikely that Apple would be the third biggest.

Second, a note on Nokia

Nokia numbers are only the smartphone sales as reported by Gartner and Analys. So the mainstream Nokia phones, from low cost phones to featurephones, are excluded. The above count is only for smartphones. Also I have not included the Nokia non-phone devices (their media players and internet tablets) even though these could also be included, because I don't find those numbers reported. With them the Nokia number would be marginally bigger still.

Third on the full 2008 year numbers

Note that my analysis can only include reported numbers so obviously I cannot report on the current quarter until those numbers are formally released. But I believe the actual numbers will be very similar to these, because of the overall economic downturn. So it is very likely that the actual fourth quarter 2008 numbers are not as much above their 2007 numbers, as the earlier part of the year has been. With companies the need to slash budgets has been severe, so its likely that corporate purchases of PCs is particularly hard-hit this fourth quarter. With residential purchases, the laptop or PC is quite an expensive gift, so my gut says, that types of gifts are going to suffer more in Christmas sales than smaller gifts. And this is likely also to affect smartphones. So at least the percentages will be very similar after the fourth quarter 2008 numbers are released, the aggregate number may end up a couple of percentage points higher (or not) for this year. None of the companies will move significantly on their rankings based on fourth quarter performance and Nokia's lead is now insurmountable for this year.


Some might argue that every mobile phone is a computer (as its guts are of course managed by microprocessor) and that can be justified. Almost all modern (non-smartphone) mobile phones do have a browser and far more than half of new phones this year have Java and can accept downloads of content and things such as games. Those who use this defintion will probably know that Nokia became the world's biggest computing device manufacturer back in the early parts of this decade, selling more phones (ie "computing devices") than all PC makers put together. But by this definition should we also consider the Playstation a computer and our home DVR/PVR (hard disk drive recorder for our TV, like TiVo or Sky+). We could then add our microwave and coffee maker while we're at it..

I think basic mobile phones should not be considered computers. But smartphones - that is a totally different matter. In my long posting for the holidays, I celebrated 50 years of computers in Finland and in it I also made comparisons of the performance of computers and that of smartphones. A modern smartphone has all the elements traditionally considered key parts of a true computer. It has a CPU, memory, storage, an input and output system. A smartphone has a standard operating system which allows users to download and install applications (software). Not just content, but actual applications.

The dictionary definition of a computer says the device can be programmed, and the common usage today means it can accept applications to be installed by the user (this was not the common usage in the 1970s, in the era of the mainframe when the PC emerged; at that time common usage was a programming language compiler and all programs were coded in something like Fortran or Cobol or Pascal etc. None of us normal users bother to use a programming language today on our PC). The definition says can be programmed and a normal phone does not accept user-installed applications, but every smartphone - by definition - does. It fits the definition just as well as a supercomputer.

And if you're thinking "but the phone is a toy, its not a "proper" computer, then do recognize that the top end smartphone of today (like my Nokia E90 Communicator or N82) has the specifications that match essentially all critical components of a supercomputer from only some 20 years ago, the Cray 2. For example the processing speed of these top smartphones runs roughly in the 1,000 MIPS range (millions of instructions per second). That was the speed of the Cray 2. Its earlier sibling, the Cray 1, had a speed of 150 MIPS. A top end Nokia managed that speed three years ago.

Note I am not arguing that we have a "real supercomputer" in our pocket. But I am arguing, that the smartphone fits all the definitions of a computer by what it is, and what it can do. And by its performance, it will match the performance of the most powerful computer on the planet from two decades ago. Or more close to everyday people, will match the performance of an entry-level laptop only five years ago.

There are smartphones that use the Windows operating system (modified for mobile phones) and the Apple iPhone uses a variant of the Macintosh OS/X operating system. There are smartphones that use Linux the third of the main computer operating systems. I think it is perfectly valid to consider smartphones as computers today. They may be small, but they are computers in every way. To discriminate against them, to me is as dumb, as if someone in the 1980s had said that we should not count the personal computer as a "real computer" and only mainframe computers should be included in statistics of computers.


So then you might say, ok, it has the performance of an old computer, maybe, but its use is as a phone, so it should be considered a phone, not a computer. I think this is a tricky angle. What if you have an old desktop computer that sits at home, connected to the broadband, but you have your newer laptop on which you do all of your regular computer activities. And you have reconfigured your desktop with Skype to be your phone, and you only use it as a phone. Did the computer stop being a computer now because its primary use is as a phone? No, it is still a computer.

But consider this. The most common use, the so-called killer application for a PC today is internet access. Do we use a smartphone for internet access? Yes we do. Look at an iPhone, massive internet access, both over 3G and on WiFi. The smartphone is USED like a computer is used. For many iPhone users, the internet access is the most desired feature, far more important than voice calls, so it is, for those users, primarily a wireless internet access device. Totally replicates computer use, and there is even the study earlier this year that about half of iPhone users are migrating computer use away from their laptops and onto their iPhones. Its no fantasy of mine. An iPhone is for many of its owners, a partial (or even complete) replacement of a computer. If it replaces a computer, and it fits the computer's definition perfectly, should it not be called a computer then?

And take a common application used on personal computers today, email. Now a smartphone, Blackberry. Across most of its users, the Blackberry is the preferred and primary email device. The first evidence of email usage shifting away from laptops to Blackberries was reported back in 2001 and has been consistenty reported this whole decade. Another computer use, that is clearly perfectly capable of being done on a smartphone. Its not just that it is capable of performing like a "real computer", a smartphone is so good at it, that many people are shifting their computing use away from desktops and laptops to smartphones like the iPhone and the Blackberry.

And I haven't even started on the Developing World, where mobile phone based internet access outnumbes PC based internet access by as much as 10 to 1. Where a smartphone is often the only way to have any computing ability at all, within a reasonable budget - and where landline based broadband is non-existent, or intermittent, and often frightfully expensive. Talk to users in the Philippines or India or Kenya or South Africa, that can a smarphone be a computer, and they'll mostly say, that it not only can be, it is.


And please don't misunderstand me. I'm not singing alarms of the "end of the PC". Just like the fact that mobile emerged as a new mass media channel, did not end the previous six media, just like the internet did not end the previous five or TV end the previous four mass media. They all just adjusted for the newest form. The same is true of smartphones and bigger computers. We will not stop using laptops and big government etc uses will not stop with mainframes and supercomputers.

What the smartphone now allows, is for some computer use to migrate to it. It really does make sense, that heavy email users love their Blackberries. It is better for many uses of basic email, than a PC. The same will happen with many other uses, like the iPhone which is a particularly well used camera to upload pictures to Flickr, ahead of many major digital camera brands with their SLR versions; and ahead of all other cameraphones. Its particularly good at both easy capture of pictures - and easy uploading (to Flickr in this case). With a digital camera, we usually have to go the extra step of moving the pictures to our PC, and from there upload to Flickr. But it can be done direct from a smartphone, and apparently iPhone users are very prone to doing so.

This kind of usage will be seen on smartphones. Probably lots of videos, so YouTube watching (and uploading videos from smartphones, in particular those with DVD quality videocameras like my N82) will be very suited for smartphone use. But note, its not a particularly pleasant environment for editing pictures (no mouse for example, and in editing pictures you can never have too large a screen ha-ha). So for editing our images, if we have one, we will prefer to do that on a PC.

So please don't misunderstand me, even though some users of the Blackberry or iPhone are shifting behaviour away from the PC, that is not going to shift the majority of PC users to smartphones. It took laptops 23 years to replace desktops as the most sold form of PC this year, and even so, the installed base is predominantly desktops still in 2008, and will continue to be for a few more years. The PC has at least a decade, proably two, before the smartphone could hope to reach it in size of the installed base.


Also this is not something only "Silly Tomi" would think of. Nokia has been calling its N-Series not mobile phones, but since 2005 already - for three years - they've called them "multimedia computers." Apple calls its iPhone their variant of the netbook. And that is also what the Economist concluded in its big celebration of the Personal Computer anniversary issue. So this is becoming an accepted view, that smartphones are indeed small, pocketable palmtop sized computers. But real computers, yes.

It is a question of size only. The smartphone is the most personal of computers, it fits in our pocket, we carry it everywhere. It should be counted in the total numbers of computers. And with that change to how computers are counted, yes, this year for the first time, Nokia becomes the biggest maker of computers in the world, Apple jumps to fourth place, and RIM hits the seventh biggest maker slot, ahead of Toshiba who invented the laptop. You can quote me on that..


If you new to the mobile space and want to understand the scale of the mobile telecoms industry (of which the smartphone is a major growth element), I have released my widely referenced annual review of the industry size. It was also given the (tied for) best blog recognition by the last Carnival of the Mobilists for the year.

If you're already headed into the smartphone space, in a post-iPhone era, and need to understand how to build compelling services for mobile, I have a good primer for you, including the seven unique competitive advantages of mobile in the article on the 7th mass media channel.

And if you are dubious of this claim, or unsure how to feel about smartphones - should they, or should they not be considered computers, for that I wrote an update to this story, examining five eras in computers with a good comparative table, which may help you understand what the trends are, and how consistent (or inconsistent) the smartphone is in those trends.


No comments:

eXTReMe Tracker

Add to Technorati Favorites