Nokia continues to hemorrhage Smartphone market share to RIM and Apple

Rough morning for Nokia. After having its trio of new music-oriented handsets leaked, Gartner goes and releases a set of unflattering sales figures related to Nokia's beleaguered smartphones. While smartphone sales overall increased 3.7% in Q4, Nokia's share slid from 50.9% to "just" 40.8% on 15.6 million units. While many, including Samsung and HTC gained, it was RIM and Apple that made the biggest advances. RIM increased its share of the lucrative market to 19.5% (7.4 million units) from 10.9% while Apple more than doubled its share, up from 5.2% to 10.7% (4.1 million units). Keeping things in perspective: smartphones accounted for only 12% of all mobile device sales for the quarter. There's a method to Nokia's mid- to low-end handset madness.

[Alex Terry @ Mar 11th 2009 6:48AM]

I'm waiting for the N97 release. And I'm sure a lot of other N95 users are as well.

The big N will bounce back

[trickards @ Mar 11th 2009 7:07AM]

Nokia's are slow and unresponsive - the N95 was, the N96 is and I'm damn sure the N97 will be too. Call me when things speed up a bit.

[Geeker @ Mar 11th 2009 8:39AM]

The E71 is anything but slow. If they can capture the E71 performance & speed in the N97, Nokia will rebound in no time.

[Blastar @ Mar 11th 2009 3:22PM]

My slow N95 works just fine..
I love all the apps that I have, actually pretty amazed about has smart are all designed and I speak more about the software part as well as for the hardware but.. little more speed wouldn't harm.

[Mark Anderson @ Mar 11th 2009 9:01AM]

The big N don't have to bounce back because - as a lot of the people predicting Nokia's demise appear to have missed - these figures only relate to one quarter's sales. One quarter where Apple has strong sales of the iPhone (but decreased from the previous quarter) and RIM launched the Storm, new Curve and promoted the Bold.

Nokia on the other hand released... um... err... maybe the N85 I suppose and yet still managed to keep 40% of the total sales market.

So here we are (again) comparing sample statistics as opposed to population statistics without taking reference to product launch cycles. This would be a bit sad if it wasn't unexpected.

Now here's a prediction for you: I'm going to bet that with the launch of the 5800 and the N97 over the next two to three quarters Nokia will pull back significant levels of market share because, as pointed out, the iPhone has a limited target market which is pretty much saturated and probably won't have a viable new product launch for another nine months to a year and RIM have kind of thrown all their goodies out last year.

Watch and learn, folks.

[Mark Anderson @ Mar 11th 2009 9:37AM]

Oh yeah, and if we are going to be doing snapshot analysis on one quarter's data, when can I expect to see Engadget's article headlined "Windows Mobile eats the iPhone's lunch"?

You know, because in the quarter measured it actually did and, since you guys posted an article when Apple took the number three spot, it's only fair, isn't it?

Hmm?

[Shank @ Mar 11th 2009 11:21AM]

Proof once again that iphone, has revolutionized smartphone industry. In just 1.5 years has already killed motorola,sony, n now nokia is on the chopping block. Palm might be next if pre doesnt sell 1 million in first week. I was right when i said nokia should stick to lowend cells, just look at their release of new xpress music phones,,,Now that is pathetic,,,keep nokia on other side of pond please, dont bring usa cell technology down with you, the plague...ive spoken n silenced everyone

[Aaron @ Mar 11th 2009 11:54AM]

@Mark Anderson
Q1 2009 should be interesting. The 5800 XM is Nokia's big seller at the moment and it didn't hit most markets until January.

[JS @ Mar 11th 2009 12:13PM]

N97 has performance issues in video playback.

The N97's video playback sucks. If you look at videos of the N97 playing videos you will see that it has redraw issues when there is fast motion or scene changes. People dismiss this as a beta issue .. it's not .. the software is pretty close to release and it has that issue.. some people may find those scene change redraw things OK especially if they aren't looking for it but compared to the rock solid stable smooth video playback of other smartphones (i wont mention names) it sucks.

[boss-hogg @ Mar 11th 2009 12:22PM]

I really dont know what people think a 'smart phone' is. I thought i was the ability to do email, web, pim, and multi-task. The Iphone doesnt multi-task.someone help me out with this..... thank

[nicholas @ Mar 11th 2009 12:28PM]

They’ll bounce back if they take a good long look in the mirror. They have always had everything they need to succeed in the changing mobile world, they took EPOC and made Symbian, but made a crucial mistake in my mind. Instead of focusing on what people would do with their devices, instead of extending mobile to the NetBook profile, they chose to focus on smaller devices that did a nice average job. Not good enough, and the processors are simply symptomatic of the problem.

Nokia, mobility is computing. It is the future of computing. We have ranges of screens that have to work together. We need to develop quickly, because this world will change incredibly rapidly. There is no excuse for not having tools equivalent to Apple. We are developing for the iPhone. I want to build a mobile education business down the road. Why should I even consider Nokia? Just because they are in the hands of everybody around he world? Weak! No, we need excellent devices, with impressive interactions and cohesive media capabilities. Put an N and an iPhone in the hands of a 4 year old and tell me which one is dropped.

[adrian @ Mar 11th 2009 2:26PM]

Nokia phones are ugly.

[Diamamet @ Mar 11th 2009 7:30AM]

Nokia has a smartphone?

[stupid ^ @ Mar 11th 2009 9:20AM]

Diamamet has a brain?

[Tohe @ Mar 11th 2009 6:55AM]

RIM is becoming popular in emerging markets due to its messaging capabilities. Nokia has dominated these markets in the past, so it is clear there is where the battle is being fought. Nokia needs to bring new life to their devices, rethink their os and think outside the Nokia box in terms of design, less plastic more sex appeal.

[AttractedRhyme @ Mar 11th 2009 8:05AM]

^ i agree with you

Nokia doesn't make phones that'll grab others' attention

Samsung's Omnia HD is an example to look for. Apple was smart enough to make iPhone beautiful. :)

ps: I own N82 and want to upgrade but find no option at nokia :(

[chefgon_ign @ Mar 11th 2009 6:58AM]

I'm sure I'll get low-ranked by the european crowd for saying it, but I've never seen a Nokia handset that I actually liked. I'm glad to see them getting displaced by companies like RIM, Apple, and HTC who are actually making nice products.

[pk @ Mar 11th 2009 7:08AM]

Nokia used to create nice products all the time and I find it more likely that you are unaware of the good Nokia devices since you are probably in North America. I would almost agree if you say there is no interesting product in 2008 though. The E71 is the exception

[Sax25 @ Mar 11th 2009 7:05AM]

Nokia is fast asleep - this is their biggest problem. The iPhone came out - they stood on the sidelines, the G1 came out, they stood on the sidelines and now the Pre is set to launch and where will they be - the sidelines. The people at Nokia are living under a rock. Where is their so called iPhone, G1 and Pre beater? Where is the Nokia phone that will have people queueing outside their flagship stores for days? It almost seems like they have a can't do attitude or that they really don't give a crap. Month after month, they produce the same old tired looking handsets so no wonder they are losing market share - they don't do anything innovative. Like these new music phones with DRM? Yeah way to take the clock back 5 years Nokia! Sony Ericsson are in this same boat too. Both these manufacturers seem intent on just towing the current line and not trying to be innovative when they both could be considering how long they have been in the handset market. I expected much better from both of them by now. It seems the only Manufacturer that has stepped up is.. surprisingly, Palm! Nokia however must be listening to Prince and thinking it's still 1999.

RING RING .. the cluephone is ringing, and it's for you Nokia!

[Canis_Minor @ Mar 11th 2009 7:14AM]

"Where is the Nokia phone that will have people queueing outside their flagship stores for days"
Are you suggesting that they pay performance artists to queue outside their stores, like Apple did? I don't really see the point in that... ;)

[Aaron @ Mar 11th 2009 11:40AM]

"Where is their so called iPhone, G1 and Pre beater?"

In the picture at the top of this article?

"Where is the Nokia phone that will have people queueing outside their flagship stores for days?"

You mean these queues... http://www.slashgear.com/nokia-5800-tube-uk-launch-prompts-queue-of-buyers-2331709/ ?

[Sax25 @ Mar 11th 2009 1:17PM]

@Aaron

Ooh yes .. a phone model we won't care to remember 2 months after launch.

..and 50 people outside their London store is hardly news compared to 1000's of people outside Apple stores all over the world.

Come back when you have something decent to say *yawn*

[Aaron @ Mar 11th 2009 2:15PM]

I think you need to chill out. You're going to do yourself some damage if you continue to stress out like this. :)

[D.Fens @ Mar 11th 2009 4:31PM]

On certain markets (in fact most of all, except North America) iPhone, G1 and Palm dont have even 5% of the market share together. On the other hand Nokia has not been popular at any time in the USA so I don't think they really care too much as long as they rule the rest of the world. 95% of the phones I see around here (Europe) are Nokia, Sony Ericsson, Samsung, LG, Motorola, Alcatel ... the three you mentioned + HTC + RIM are rare exceptions. In fact I'm sure that there are more people here having Vertu than G1. So don't judge this just from a USA perspective ... USA has just about 5% of the world population. The only non-Nokia phones who are interesting for me are Samsung (like Omnia HD) or HTC (Touch HD, Touch Pro) and maybe some Sony Ericsson. Blackberry's are pretty interesting but I'm not sure I want a phone that big ... G1 is way too ugly (and I don't trust Google that much for making phones), iPhone lacks too many things and is expensive, Palm ... haven't seen one in my life (I understand that their new phone is not yet launched). If I had to choose a phone considering only the specs I would probably choose Samsung Omnia HD. I think Samsung is the main competitor for Nokia, Apple/Google and Palm are really not that important to them.

[Canis_Minor @ Mar 11th 2009 7:11AM]

While S60 is suffering, it is not just doing so at the hands of Apple and RIM, it is also being cannabilized by S40. The latest S40 platforms offer maps, GPS, 3rd party software and hi-res cameras. Heck, S40 is "smarter" than the iPhone's so-called smart OS. This makes it harder for folks to justify buying an S60 Nokia vs. an S40 device.

If Nokia wants to regain market share, just replace S40 with S60 and voila, instant 90% smart-phone market share.

[Josee @ Mar 11th 2009 7:24AM]

Yeah, because the average Joe who doesn't know anything about Nokias S40 and S60, sits around waiting for everything to be upgraded to S60 before they decide to run to the shops and purchase a Nokia and give them back the market share ..NOT

If you think they are going to get back 90% of the smart phone market, you must be smoking the same stuff their board of directors are.

[GB @ Mar 11th 2009 7:26AM]

Could it be that you messed up S40 with S60 in your resume? Shouldn't it be "replace S60 with S40"? Or maybe I just didn't understand your post perfectly well...

[Surur @ Mar 11th 2009 7:56AM]

You guys clearly do not understand Nokia's scale. They sell something like 100 million phones every quarter, the vast majority S40.

If they replace 10% of those with S60 devices, thats an extra 10 million smartphones under their belt.

When you have such a dominant market share its all just numbers in the end.

[Jon Bendtsen @ Mar 11th 2009 7:18AM]

No chefgon_ign, i dont think you will get low-ranked, because it is true that Nokia doesnt make interresting phones. I never liked them. I used Palm Treos since 180, and now i have a Treo Pro. I long for the Palm Pre, and will be getting one once it arrives.

Even in Copenhagen where i live i see more and more people using Sony-Ericsson phones.

[superhobo @ Mar 11th 2009 7:23AM]

Nokia did with the once respected N series what Asus did with the Eee. Too much dilution.
At least it brought down the number of digits you had to remember for a model.

Also, Symbian needs a performance overhaul. The phones don't lag as much while multi-tasking, they're quite good at it in fact, but you'd think they'd speed up while running nothing.

[avis @ Mar 11th 2009 7:25AM]

the difference between mid- to low-end handset and smartphone is narrowing down very fast..we have to wait and see..

[vashah @ Mar 11th 2009 7:44AM]

Perhaps only 12% of units, but almost 2-3x that in revenue, and 5-6x that in profits.

ASP's for smartphones are 2-3x those of the basic handsets that Nokia is so great at. Plus the failure of Nokia's "Ovi" suite, makes them poorly poised to build a real ecosystem to attract users.

Unless they change their gameplan quickly - e.g., acquire HTC, I think we will quickly see Nokia go the way of Motorola.

[ben @ Mar 11th 2009 7:44AM]

I've got to say, the headline and the picture there is pretty goddamned hilarious. Well struck.

But that said, Nokia is very consistent in making hardware with incredible build quality and design. It's a bit of a shame they're not doing well.

[Carniphage @ Mar 11th 2009 7:53AM]

Nokia had barely launched the N96 - and then pre announced the N97.

It wasn't ready to ship. But Nokia announced it anyway. Presumably killing the N96 stone cold dead.

Nokia needs to stop competing with itself before it can hope to take on any real competitors.

C.

[Lundmark @ Mar 11th 2009 7:52AM]

I think it has to do with the new touchscreen era that came with the iPhone. Nokia hasn't been following the trend and the latest 5800 does nothing better than the iPhone but being cheap. I hope the N97 is great.

[Canis_Minor @ Mar 11th 2009 11:17AM]

It's not so much that Nokia hasn't been following the trend. Rather, it's that they abandoned the trend, and are now trying to get back into it. Remember the Nokia 7710? The iphone is essentially a rip-off of the 7710, with improved power, UI and ergonomics.

If Nokia had continued to push development of the S90/7710 platform, instead of abandoning it and farting around with niche tablet devices, they would be very well positioned with touchscreens now.

[Malaycobra @ Mar 11th 2009 7:58AM]

I have a Nokia E-71 and I love it. Everyone who gets to play with it loves it too. No one knew it existed before I showed it to them. "Is that a blackberry?" is the what I hear most.

Until Nokia start working with carriers to get their smartphones on the store shelves, how can they expect the general public to pick them up?

Most people are technically clueless, and have no idea what "unlocked" means. I think to most it has a suggestion of hacking, or that the phone might not be acceptable to the carriers.

Ok, so the E-71 can be had for less than $300, but what company is going to authorize an employee to spend $800 to get an unlocked N97, when a blackberry can be had for $150?

[james @ Mar 11th 2009 8:16AM]

Quite.. in my opinion Nokia hasn't designed anything amazing since the 3310! wow that was a while ago... Nokia ruled the roost then.

Amazing how companies can let themselves sit on laurels.

[thedudeabides @ Mar 11th 2009 8:16AM]

A fair point to this would be what percentage the "smartphone" market is against the total cellular phone market. Nokia may be focussing on eating up more of more of the "phone" market and not looking to make a huge play against the Apples/RIMs/WinMo devices. Or attempting to combine markets by bringing smartphone features to normal handsets.

If they're profitable it may be a smart decision to let the coming "smartphone war" play out and challenge the winner.

That being said, i do find their hardware design to be, uninspiring.

[Magallanes @ Mar 11th 2009 8:26AM]

Take note that while nokia-symbian loss a noticeable percentaje but still he is the king of hill.

In my case, the only think i miss in my old and trusty n95 is a better screen (and a xenon flash).

[Cherrybomb @ Mar 11th 2009 8:20AM]

They need to get the n97 out like NEXT MONTH. If there's a few bugs they can fix them with updates. If they leave it until June too many individuals at the end of their contracts will pick a different phone, and when it does come out there will be far too much competition.

[huy @ Mar 11th 2009 8:26AM]

from what i've seen the n97 looks great... just not as great as the pre and not as trendy as the apple trend appeal and not as well regarded for messaging/mail as RIM... and now that tmoblie and soon other carriers start carrying high MP camera phones over here in the US... well that just isn't good news for the n97 at all.

[Surur @ Mar 11th 2009 9:03AM]

Ignoring Nokia for a bit, another thing Gartner noted is that Windows Mobile outsold the OSX Mobile by 16% in Q4, reversing the much crowed result in Q3 when Apple lauched with much fanfare the iPhone 3G. Basically WM sales went up, and iPhone sales went down.

I guess the iPhone phenomenon is now well and truly over. Apple would have to drop its price by 50% again to double sales, like they did previously.

http://wmpoweruser.com/?p=3578

[loosely_coupled @ Mar 11th 2009 6:59PM]

hahah.. the iPhone phenomenon is "over"? LOL. Windows mobile ships on dozens of devices available on nearly every carrier in the world, not to mention major corporations have standardized on the platform for a decade. The fact that the iPhone can even get within an order of magnitude of the unit sales is incredible. Just wait until CDMA/LTE iPhone is available on all major carriers...

[Nokia Sux @ Mar 11th 2009 9:14AM]

The internet confirms it, S60 is dying. Talk about an OS that needs an overhaul... this simply cannot compete with the iPhone, Bold or G1. I know because I've owned all three and am currently using an E71.

Don't get me wrong, the design and build quality on the E71 is sick, but they need ANDROID on there!

[Paul @ Mar 11th 2009 9:12AM]

i love nokia

[Bill @ Mar 11th 2009 2:37PM]

I seriously doubt that Nokia will fade away anytime soon. However, now that Symbian (S60) is being open sourced, other manufacturers will be chomping away at their market share. Samsung has been doing this for awhile, with it's feature packed and very stylish phones, and they'll continue to do so. Hell, I just bought a Samsung S60 smartphone myself, and I came from a Nokia - Yeah, I know. I'm a traitor! ;)

I feel that Nokia really needs to wake up and get away from the dual slider design that was established with the N95. It's a bit old now and not really exciting to consumers any more.

Consumers like new form factors and different build materials. It keeps them interested, even if the phone is essentially the same as the previous generation. Yes, from a technical standpoint these things don't matter. However, in terms of consumer perception, new forms and different materials translate to new, better and more desirable. And, that translates into interest, which translates into sales, which translates into maintaining and/or increasing market share.

[Canis_Minor @ Mar 11th 2009 11:52AM]

I'm not sure what you mean by new, different form factors. You can pick up a Nokia smart phone in just about any form factor you want. Just off the top of my head:

- Dual Slider (N95/N96/N85/N86)
- Std Slider (N81/E66)
- Candybar (N79/N82)
- Qwerty slider (E75/5730/N97)
- Qwerty candybar (E71/E63)
- Flip (6555)
- Qwerty Butterfly (E70)
- Touch only (5800)

And then there are some funky S60 XpressMusic shapes. Definitely not a question of shapes.

[bdotwoods @ Mar 11th 2009 9:26AM]

i could go for a new os on my e71. I feel like it's been the damn same since the days of the 3650 (wasn't that the first phone that could record video?)

nonetheless... Nokia's smartphone demographic (at least in the U.S.) had always been users who aren't trying to subsidize phones (you can thank your local gsm carriers for always picking up the SHITTY phones for that), but now that that every competitor has at least one phone that can be subsidized via a carrier, the market has tightened up, because.... people are starting to save their money. Nokia's best phone right now (said e71), can be subsidized by going through best buy, but 1. Who wants to deal with the devil, and 2. If you're already in best buy and looking at the unlocked phones, you're prolly part of the demographic that would buy a high end nokia anyways. Brand awareness is another thing. I'm sorry, but the only one that i can remember being a big deal would be the 3650... and i've had wayy too many nokia phones (the real touchscreen phone, the 7710, is still around here).. so until westerners stop associating nokia with those cheap ass entry level phones that they got for their grandparents, the connotation lies with the basic ass phones.. where on a horrible day, the worst bb (let's just say the storm is the new sidekick) smashes the 5310 that tmobile beats into the ground in various colors.

Nokia knows where they make their money. They've already gotten their demographic, and their followers, it's just more people playing the "smartphone" game. (insert copy/paste comment).

[D @ Mar 11th 2009 9:48AM]

For so long Nokia was the only smartphone around. Now that there is competition they will have to lose market share but they will get better and remain a dominant player, but not at over 50% of the market.

They also need to make their prices lower. True that most Nokias are contract free and hence more expensive but still over $600 for an unlocked Nokia vs a $200 iPhone is no comparison for most consumers.