CanalPDA

Garmin retains global PND lead, smart phones become the new battleground

Reading (UK) – Monday, 16 March 2009 – North America overtook EMEA (Europe, Middle East and Africa) as the largest regional market for PNDs (portable navigation devices) in the final quarter of 2008, according to the latest research from Canalys. In Q4 2008, the US alone accounted for 52% of the worldwide PND shipment total, compared to 36% for EMEA. “The US has continued to deliver unit growth year-on-year, despite the economic situation, but this is supported by very aggressive pricing – especially for holiday promotions,” said Chris Jones, Canalys VP and principal analyst. “Shipments in the US were up 20% in Q4, and 44% for the whole year. In contrast, EMEA was down 26% in the quarter, bringing global shipments for Q4 down 4%.”

Garmin retained its worldwide PND lead, increasing its market share in the quarter to 37%, up from 35% in Q3 and from 30% in the year-ago quarter. TomTom kept second place, also increasing its share, taking 30% of the market in Q4 2008. The combined shipments of Mio and Navman put MiTAC in third with 6% share, narrowly ahead of Nextar.

For the whole of 2008, PND shipments globally grew 18% over 2007, to around 41 million units, but the value of those shipments fell 16%, highlighting the price war that has been raging in the industry. Canalys estimates that more than three-quarters of the PNDs that shipped in Q4 were priced below €200 (US$250) before tax, and that connected PNDs, which are typically at the higher end of the price range, represented less than 1% of the total shipments in Q4. “One of the challenges facing vendors of the new breed of connected PNDs is that the market has been educated to expect very low prices,” said analyst Caroline Chow. “These devices offer useful live information for the driver, but come at a premium that few are willing to pay, especially in the current climate.”

A consumer survey run by Canalys in November revealed that more than a third of PND owners described real-time traffic as a ‘must have’ in their next device – above any other feature listed. A fifth of the 2,400 consumers surveyed said that, in the previous six months, they had got stuck in traffic and wished they had taken a different route more than six times – 10% said it had happened more than 10 times.

“The need for traffic information is clear, but vendors need to work on changing people’s perceptions of what a GPS navigation device is for and hence the value it delivers,” Jones added. “Over 80% of users surveyed said they ‘never’ or ‘rarely’ use their device on their regular journey to work. When asked the main reason they bought the device in the first place, 70% gave an answer related to use on unfamiliar routes, while only 8% mentioned the daily problems of avoiding traffic or to get warnings about safety cameras.”

The need for dynamic information, combined with current perceptions of PNDs and device costs, will be good news for the smart phone vendors who are also focused on providing connected navigation and other location-based services. Canalys research indicates that over 4 million phone-based navigation solutions shipped in Q4 – more than double the figure of a year earlier. But this area is led by companies such as Nokia, TeleNav and NIM – who combined account for three-quarters of the market – rather than the likes of Garmin, TomTom and Mio. With more than 70% of smart phones now coming with GPS built in, this part of the market is destined for substantial growth over the next few years. Garmin will hope its alliance with Asus and recently unveiled nüvifones will help it break into the very competitive smart phone world, but, as others have found, getting devices ranged and subsidised by mobile operators will be a huge challenge.

http://www.canalys.com/staff.

Nokia retains lead, but Apple moves into number two position

Reading (UK) – Thursday, 6 November 2008

* Total worldwide smart phone shipments hit new peak of 39.9 million in Q3 2008
* US market more than doubles, but decline in Japan contributes to 18% year-on-year fall in Asia Pacific
* EMEA growth at 21% helped by 43% rise in Central and Eastern Europe, but Western Europe also strong
* Nokia retains market lead, but share reduced as Apple and RIM make large gains
* Microsoft share of smart phone market increases despite being overtaken by Apple

Highlights from the Canalys Q3 2008 research

Despite the gloomy economic picture and the problems being experienced by some of the leading mobile handset vendors, global shipments of smart phones hit a new peak of just under 40 million units in Q3 2008, according to the latest estimates from leading analyst firm Canalys. This means smart phones now represent around 13% of the total mobile phone market, up from 11% last quarter.

The introduction of the iPhone 3G in July and Apple’s expansion into many more countries helped propel the vendor to second place globally, taking it above RIM in the quarter and resulting in higher shipments than for all the Microsoft-based smart phones combined.

“It was expected that Apple would figure among the smart phone leaders this quarter, with that huge initial new product shipment, it was just a question of how high up it would be – and this is impressive,” commented Pete Cunningham, Canalys senior analyst. Despite RIM being nudged into third place, its growth of over 80% shouldn’t be overlooked either. “This is also a tremendous performance, especially considering the delays it experienced in rolling out the Blackberry Bold,” Cunningham added. “Some customers will also have been waiting for the Storm to arrive. With these new products and the clamshell Pearl 8220 available in Q4, it is quite feasible that RIM will return to the number two position.”

The success of Apple and RIM, as well as fifth-placed HTC with its Windows Mobile devices, has eaten into Nokia’s share of the smart phone market – a market it has led consistently for several years. Nokia’s broad portfolio of models, and the wider audience it attracts, does leave it more exposed to the trends affecting the overall handset market. Year-on-year its smart phone shipments fell in Q3 for the first time. “Nokia is also transitioning from some very successful volume drivers, like the N95 and E65, to a number of successors, such as the flagship N96, and shipments of these new models have not yet ramped up,” noted Canalys analyst Tim Shepherd. “And Nokia has taken time to bring a touch screen product to market in the wake of the iPhone’s success, despite having had the experience of producing the Series 90-based 7710 four years ago. Conversely, vendors such as HTC with its Touch Diamond have capitalised on customer demand for this type of product.”

Through its Consumer Mobility Analysis service Canalys has surveyed over 13,000 European mobile phone users on a wide range of mobility topics. Having identified strong underlying acceptance of using touch screens on phones back in April 2007, another survey in early 2008 revealed that three-quarters of consumers in countries where the iPhone had launched expressed interest in having a touch screen on their phone. Touch screens also proved to be the most popular device design when users considered their future mobile usage of applications such as playing music, using maps and web browsing. Nokia is focusing on these applications, for example through Nokia Maps and Ovi, and has led in including technologies such as GPS, but other vendors are doing a good job of conveying the impression of having innovative devices optimised for such usage.

“With competition in the smart phone space heating up, being able to introduce technology and user interface enhancements quickly is critical,” added Shepherd. “You also need to be able to integrate them seamlessly into the device to provide a great total user experience. And that means having sufficient control of development of the operating system, which Apple and RIM clearly have already. Nokia’s acquisition of Symbian should help it in this regard, regardless of what other Symbian Foundation members choose to do.”

Motorola, currently holding onto fourth place in smart phones thanks largely to its Linux-based models, recently announced it would move away from using the Symbian OS and focus more on Android. With T-Mobile’s G1 now shipping in the US and the UK, Android will appear in the Q4 smart phone numbers, but more vendors and a wider range of device designs will be needed to achieve significant global shipment levels. “While they will appeal to some, particularly professional users, research suggests that devices with large, slide-out keyboards just don’t resonate as well in the consumer market as pure touch screen designs,” Shepherd added.

Looking at the Q3 smart phone market by operating system, things have got particularly interesting with the decline in shipments of Symbian devices by the key Japanese vendors, and each of the top five hardware vendors largely allied to a different OS.

Despite being overtaken by Apple globally in Q3, Microsoft has increased its share of the smart phone market year-on-year, helped by the volumes being achieved by vendors like HTC and Samsung in particular. With Android about to be thrown into the mix, Canalys expects that 2009 will see Symbian remain on top, but that it will be fairly closely fought between the other major smart phone operating systems, presenting operators and application developers with some challenges around where they deploy their resources.

The new edition of Canalys’ smart phone and mobile navigation trends report is now available. It investigates the key global market trends, looks at regional differences and the performance of the leading hardware and software vendors, emerging technologies, user behaviour and other factors to deliver a broad picture of the state of the market and its direction. This unique work, now in its seventh successful year, is specifically designed to help companies formulate their strategies in this fast changing environment.

http://canalys.com

• Battery life must improve to enable users to get the most from their devices
• EMEA smart phone shipments reached 12.6 million in Q2 2008, up 28% on the figure one year ago
• Growth slowed from Q1 2008, when it was 44%, to the lowest figure seen for 18 months
• Despite this, it was the second biggest quarter on record for smart phone shipments in the region
• 38% of these smart phones had built-in GPS, 58% had integrated Wi-Fi
• Devices with touch screens represented 13% of the smart phone market

Highlights from the Canalys Q2 2008 research

Growth slowed in the smart phone market in EMEA in Q2, but total shipments of 12.6 million still made it the second biggest quarter ever in volume terms. Canalys estimates that smart phones represented 13% of all mobile phone shipments. Nokia remained the market leader by some margin, but the other vendors in the top five posted much higher than average year-on-year growth, with second-placed RIM closing the market share gap by several points, and HTC, Motorola and Samsung more than doubling their shipments.

EMEA smart phone market

Both HTC and RIM have been making steady progress toward the one million shipments per quarter mark in EMEA and are now very close to each other in market share terms, but it is possible that they will be overtaken by Apple in Q3 following the launch of the iPhone 3G in many countries in the region.

The smart phone market continues to be boosted by user demand for high-end features. This is unlikely to be dramatically affected by the economic situation in the short term, though operators will likely become even more unwilling to heavily subsidise high-end devices without adequate proof of return, and contract lengths and the time between upgrades are expected to increase. Canalys estimates that 58% of the smart phones that shipped in EMEA in Q2 had integrated Wi-Fi, 13% had stylus or finger-driven touch screens and 38% had integrated GPS.

“Today, many owners are not making full use of their smart phone’s features,” said Canalys senior analyst Pete Cunningham. “Concern over usage costs is still a big barrier, though wider availability of flat rate data plans will help, and usability still needs to improve for certain applications on many devices. People are also wary of draining their battery and not being able to make calls. Battery life isn’t helped by having GPS and Wi-Fi turned on, nor by having a large, bright screen for navigation or web browsing. But there is clear demand for those features and applications, and advances in battery technology would enable quite substantial changes in usage patterns, with all the service revenue benefits that would bring.”

Recent consumer research conducted by Canalys in several European countries reinforces the importance of balancing features against power consumption. In a survey of over 4,000 mobile phone users in March, battery life came out as the aspect of their phone they were least satisfied with. Another survey of 3,000 consumers in June showed that having better battery life than current mobile phones and notebooks would make two-thirds of respondents “more”, or “much more”, likely to purchase a Mobile Internet Device (MID) – a device designed for web browsing on the move. This registered as a stronger influence than the inclusion of features such as GPS, mobile TV or the ability to make phone calls.

As the number of GPS-equipped phones rises, adoption of location-based services (LBS) becomes a more realistic prospect. Canalys’ European consumer surveys also reveal interest in a variety of such services. The most popular are those that relate to driving, such as getting information on local road traffic, speed cameras, open petrol stations and current fuel prices. The services that fewest respondents thought would be useful were those that delivered information on local cinemas and programme times, and local retail price comparison and stock searches.

“Something that stood out in the latest survey was that those who already owned a Portable Navigation Device (PND) showed only a slight preference toward paying to have these services on their PND rather than on their mobile phone,” commented Canalys analyst Tim Shepherd. “There is already quite high acceptance in principle that even key driving-related location services would be delivered to the phone.”

With 4.8 million PNDs shipping in EMEA in Q2, and 4.7 million integrated GPS smart phones, it is clear that PND vendors will have to adapt quickly to the rising threat posed by phone-based navigation solutions and location-based services, even if most of those GPS phones today are not being used for vehicle navigation.

Location, map-based applications and the future of navigation will be key topics of the EMEA Canalys Navigation Forum, being held in Budapest, Hungary on 8–10 September 2008. Sessions will look at location-based mobile advertising, the role of dynamic and location-aware content, the future of connected devices and services, and PND differentiation. Presentations will also analyse the navigation value chain in more depth and explore the interaction needed between mobile operators, vendors and content owners.

To find out more about this key industry event, please visit http://emea.canalysnavigationforum.com.

Singapore and Reading (UK) – Tuesday, 5 February 2008

Annual highlights

• Converged device shipments (smart phones and wireless handhelds) rose 60% to hit 115 million in 2007
• Shipments of handhelds fell 47% to 3.0 million, from 5.6 million in 2006
• APAC is the largest region by volume – 47.9 million units in 2007, ahead of EMEA at 45.9 million
• North America is growing fast – shipments doubled to 20.9 million, from 10.3 million in 2006
• Nokia remained global market leader, shipping 60.5 million smart phones
• RIM shipments grew 112% year-on-year to 12.2 million, strengthening its second place position
• By OS provider, Symbian leads on 67% share, followed by Microsoft on 13%, with RIM on 10%.

Q4 highlights – converged devices

• Converged device shipments rose 72% year-on-year in Q4 2007, the highest growth seen all year
• Nokia and RIM retained their number one and two positions
• Apple achieved third place despite its limited geographic coverage, with 7% share
• APAC converged device shipments rose 23%, EMEA 79%, and North America 222%
• Symbian leads with 65% share, ahead of Microsoft on 12%, RIM on 11%, Apple on 7%, and Linux at 5%

Highlights from the Canalys research

The latest market data from analyst firm Canalys shows how much the converged device market (all smart phones and wireless handhelds) has grown over the past year. These, typically high-end, devices represented around 10% of the global mobile phone market by units in 2007, with annual growth of 60% making them one of the fastest growing segments of the technology industry. Year-on-year growth climbed every quarter throughout 2007, to reach a peak of 72% in Q4.

Apple’s entry into this market in 2007 with the iPhone sparked a lot of media attention and speculation about how much it could disrupt the status quo and take share away from companies such as Nokia, RIM, Palm and Motorola. “When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders,” said Pete Cunningham, Canalys senior analyst. “What it must demonstrate now is that it can build a sustainable business in the converged device space, expanding its coverage and product portfolio. It will also need to ensure that the exclusive relationships that got it so far so quickly do not prove to be a limit on what it can achieve. Apple’s innovation in its mobile phone user interface has prompted a lot of design activity among competitors. We saw the beginnings of that in 2007, but we will see a lot more in 2008 as other smart phone vendors try to catch up and then get back in front. Experience shows that a vendor with only one smart phone design, no matter how good that design is, will soon struggle. A broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market. This race is a marathon, but you pretty much have to sprint every lap.”

Canalys estimates that Apple took 28% share of the fast growing US converged device market in Q4 2007, behind RIM’s 41%, but a long way ahead of third placed Palm on 9%. This was also enough to put Apple ahead of all Windows Mobile device vendors combined, whose share was 21% in the quarter according to Canalys figures. In EMEA, where the iPhone officially launched part way through the quarter in only three countries, Apple took fifth spot behind Nokia, RIM, HTC and Motorola, but ahead of several established smart phone providers such as Sony Ericsson, Samsung and Palm.

For the full year 2007, as in 2006, the Asia Pacific region was the biggest in volume terms for converged device shipments. Apple has of course not yet launched the iPhone in the region, and many vendors who are successful in other parts of the world, such as RIM and Palm, have also made relatively little impact there so far. Nokia continues to lead in the region, with more than 50% share in converged devices, ahead of Japanese smart phone vendors Sharp and Fujitsu. Motorola, despite enjoying fourth place, has seen its Linux-based smart phone shipments in the region fall 28% from their high in 2006.

“The mobile Linux opportunity remains just that – an opportunity,” added Rachel Lashford, manager of Canalys in APAC, “Total Linux-based phone shipments in 2007 were almost flat on 2006. There is still too much fragmentation and not enough momentum for any single open standard around which the energy of developers, manufacturers and operators can coalesce.”

Nokia’s recent announcement of its intention to acquire Trolltech will no doubt have raised questions among some of Trolltech’s mobile phone producing partners about their Linux implementation strategy going forward. Meanwhile Google’s Android initiative, like others before it, remains an idea yet to turn into viable commercial products widely accepted by both mobile network operators and the mass market. Although off to a slow start, Canalys expects Linux will account for a significant proportion of mobile phone shipments within the next few years.

Lashford continued: “Rising consumer interest in having a rich, high-speed browsing experience on a mobile device, and the demand for visually sophisticated navigation and location applications will attract more companies into this arena. Flattening mobile data costs, and the advertising-funded possibilities generated by location-based services, will help reduce usage barriers. Improvements in the underlying technologies and innovation in user interfaces will lead to more usable devices. All these factors will help push the high-end mobile phone and smart phone segments forward. Meanwhile supply-side concerns around time to market and build and support costs will drive the industry to look for economies of scale. Mobile Linux can have a big part to play in this future, but at the moment the maturity of the other mobile operating systems puts them a long way ahead.”

In Q4 2007, Canalys estimates that Symbian had a 65% share of worldwide converged device shipments, ahead of Microsoft on 12% and RIM on 11%. By region, Symbian led in APAC and EMEA with 85% and 80% shares respectively, while in North America RIM was the clear leader on 42%, ahead of Apple on 27% and Microsoft at 21%.

About the Smart Mobile Device Analysis services

The shipment estimates discussed in this release come from the market-leading Canalys Smart Mobile Device Analysis Worldwide service. Canalys’ globally consistent smart mobile device product segmentation and definitions are used by vendors the world over to provide a coherent view of the total market for smart phones, handhelds and wireless handhelds. Clients receive quarterly market updates, regular reports, trends presentations and forecasts, and direct access to the Canalys analysts. Canalys offers services looking at the smart mobile device markets by country in Asia Pacific, North and Latin America and EMEA, as well as providing global market overviews. It also has services focusing specifically on the rapidly developing markets for mobile navigation and Linux-based mobile phones, and survey-based analysis of consumer and enterprise attitudes and preferences toward mobile applications, products and services. More information is available from the Canalys web site.

www.canalys.com