WorldWide Smartphone Market - some observations
2015 was a record year for Smartphone sales. According to IDC some 1.43B - yes billion devices were sold in 2015. That is a 10.1% growth over the 1.3B devices sold in 2014.
Just as a quick comparison - The PC market according to IDC in 2015 was 276M total units sold, interestingly a 10.4% decline from 2014 - where some 308M devices were sold.
That means today that the mobile market is 5.1 times the size of the PC market - a staggering factor considering that in 2006 - smartphones only sold about 64M units and PCs sold 240M units. So the complete reverse where the PC market was 3.75 times the size of the smartphone market.
If anything reinforces the impact of mobile on the worldwide computing market then this is it.
From a vendor perspective - Samsung is the worldwide leader in smartphones, finishing 2015 with nearly 325M units shipped and a 22.7% market share. Apple was 2nd with a 16.2% market share and some 231.5M units shipped - followed by Lenovo, Huawei and Xiaomi. Those top 5 vendors account for 56.4% of the total market with a huge heard of some 100+ vendors accounting for the remaining 43.6% of the market.
So think about that for a second. Samsung alone sold more smartphones than the entire PC market and Apple came close.
From an OS perspective - Android dominates the market with a nearly 83% market share followed by Apple at 14%. MS is a very distant 3rd at 2.6% worldwide.
So again putting this all in perspective - with Android + Apple having a nearly 97% market share in mobile - no wonder the mobile application market is dominated by these two platforms. Any potential application on those two platforms has the potential to reach 1B+ users in nearly no time.
So now - let's look at PC vs Mobile in terms of operating system. MS Windows dominates the PC market with a 90% share. So just looking at the last two years of data - that means that 525M MS Windows devices where sold. In comparison there were nearly 2.3B Android devices sold. So for Android developers their market is 4.3 times greater than the Windows OS market and that's desktop Windows - not Windows mobile. Similarly the iOS market in the last two years was nearly 440M units or about 83% of the Windows OS market and that does include tablets.
So while MS absolutely dominates the PC market - the combination of declining PC sales and an exploding smartphone market that MS has very little market share in and you can see the challenge.
For me this reinforces the approach that MS took with Windows 10 and free upgrades. MS took a look at their total EUC market - PCs, Phones, etc and compared it to what was happening from a total OS perspective and realized that they had to do something to A) try and bolster PC sales and B) provide a new platform that would interest ISVs to develop apps for the platform. MS's attempt to establish a mobile presence has in effect failed.
Microsoft's growth through the 1980's, 1990's and 2000's was based on their ability to develop Operating Systems with good APIs that allowed the ISV community to build and sell applications. When combined with their OEM agreements to have Windows pre-installed on new devices - that was a killer combination that allowed MS to experience the market share that they still hold today.
But the market has changed. You now have billions of new devices that don't run Windows and that are attracting the ISV community. And even though many of the device makers have to pay patent royalties to MS for their non-Windows devices it pales in comparison to the revenue that the OEM Windows market used to generate.
Even the app model has changed. Now many apps are free and revenue is generated either via ads or post installation fees to add features, characters, etc. Few people or even companies today will pay the hundreds of dollars they used to pay for an app.
Microsoft has tried to create presence in this new market reality by making many of their apps available to Android and iOS users but I don't think they are really making a ton of money on it. There are simply too many free or alternative apps out there and MS apps often rank low on the Android and iOS store download counts. Even with corporate stalwarts like Office.
Additionally there is a huge portion of the world population where a PC is a major luxury that they will probably never buy - but they will buy a smartphone. In many cases they can perform many of the main computing tasks they need to do with that phone - so why even buy a PC.
If the current trends continue with smartphone sales growing at 10% and PC sales shrinking 10% per year, in 2020 that means that there will be 2.3B smartphones sold in 2020 and only 163M PCs. So the current 5.1 times market will be a 14.1 times market.
Bottom line is - we in fact are in the post-PC era and have been for a few years now. Certainly yes PCs will still be around - but I expect to see more Intel NUC style devices or smartphones that plug into laptop-like devices. Any with many corporations moving towards a VDI model or what I would even call a VCA (virtual corp access) model - there will be less and less demand to buy PCs.
Just as a quick comparison - The PC market according to IDC in 2015 was 276M total units sold, interestingly a 10.4% decline from 2014 - where some 308M devices were sold.
That means today that the mobile market is 5.1 times the size of the PC market - a staggering factor considering that in 2006 - smartphones only sold about 64M units and PCs sold 240M units. So the complete reverse where the PC market was 3.75 times the size of the smartphone market.
If anything reinforces the impact of mobile on the worldwide computing market then this is it.
From a vendor perspective - Samsung is the worldwide leader in smartphones, finishing 2015 with nearly 325M units shipped and a 22.7% market share. Apple was 2nd with a 16.2% market share and some 231.5M units shipped - followed by Lenovo, Huawei and Xiaomi. Those top 5 vendors account for 56.4% of the total market with a huge heard of some 100+ vendors accounting for the remaining 43.6% of the market.
So think about that for a second. Samsung alone sold more smartphones than the entire PC market and Apple came close.
From an OS perspective - Android dominates the market with a nearly 83% market share followed by Apple at 14%. MS is a very distant 3rd at 2.6% worldwide.
So again putting this all in perspective - with Android + Apple having a nearly 97% market share in mobile - no wonder the mobile application market is dominated by these two platforms. Any potential application on those two platforms has the potential to reach 1B+ users in nearly no time.
So now - let's look at PC vs Mobile in terms of operating system. MS Windows dominates the PC market with a 90% share. So just looking at the last two years of data - that means that 525M MS Windows devices where sold. In comparison there were nearly 2.3B Android devices sold. So for Android developers their market is 4.3 times greater than the Windows OS market and that's desktop Windows - not Windows mobile. Similarly the iOS market in the last two years was nearly 440M units or about 83% of the Windows OS market and that does include tablets.
So while MS absolutely dominates the PC market - the combination of declining PC sales and an exploding smartphone market that MS has very little market share in and you can see the challenge.
For me this reinforces the approach that MS took with Windows 10 and free upgrades. MS took a look at their total EUC market - PCs, Phones, etc and compared it to what was happening from a total OS perspective and realized that they had to do something to A) try and bolster PC sales and B) provide a new platform that would interest ISVs to develop apps for the platform. MS's attempt to establish a mobile presence has in effect failed.
Microsoft's growth through the 1980's, 1990's and 2000's was based on their ability to develop Operating Systems with good APIs that allowed the ISV community to build and sell applications. When combined with their OEM agreements to have Windows pre-installed on new devices - that was a killer combination that allowed MS to experience the market share that they still hold today.
But the market has changed. You now have billions of new devices that don't run Windows and that are attracting the ISV community. And even though many of the device makers have to pay patent royalties to MS for their non-Windows devices it pales in comparison to the revenue that the OEM Windows market used to generate.
Even the app model has changed. Now many apps are free and revenue is generated either via ads or post installation fees to add features, characters, etc. Few people or even companies today will pay the hundreds of dollars they used to pay for an app.
Microsoft has tried to create presence in this new market reality by making many of their apps available to Android and iOS users but I don't think they are really making a ton of money on it. There are simply too many free or alternative apps out there and MS apps often rank low on the Android and iOS store download counts. Even with corporate stalwarts like Office.
Additionally there is a huge portion of the world population where a PC is a major luxury that they will probably never buy - but they will buy a smartphone. In many cases they can perform many of the main computing tasks they need to do with that phone - so why even buy a PC.
If the current trends continue with smartphone sales growing at 10% and PC sales shrinking 10% per year, in 2020 that means that there will be 2.3B smartphones sold in 2020 and only 163M PCs. So the current 5.1 times market will be a 14.1 times market.
Bottom line is - we in fact are in the post-PC era and have been for a few years now. Certainly yes PCs will still be around - but I expect to see more Intel NUC style devices or smartphones that plug into laptop-like devices. Any with many corporations moving towards a VDI model or what I would even call a VCA (virtual corp access) model - there will be less and less demand to buy PCs.
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