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Smartphones and Tablets Who will be the Winners and Losers?

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IDC May-11 1

Smartphones and Tablets:

Winners and Losers?
Francisco Jeronimo
Research Manager European Mobile Devices

Eszter Morvay
Research Manager IDC EMEA Personal Computing
May 26, 2011
Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Content

- Western European Phone Market

- Smartphone Operating System Trends

- Vendor Performance - Tablet Market Trends - Competitive Analysis - Conclusion - Q&A
IDC May-11 3

What is a Smartphone?

A smartphone is a handset that runs a high-level operating system

IDC

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11

Western Europe Smartphone Market

Western Europe
300

250

10M
SMP

Financial Crisis

No. 1

72%
Smart Phones

200

150

iPhone

176M SMP
iPad

100

4% SMP

50

0 2004
IDC

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11

Western Europe Mobile Phone Market

Total WE Mobile Phone Shipments by Device Type
300

202

148

200

171

185

189

186

196

250

105

211

220

230

238
76
2014

150

159

170

156

100

179

142

147

124

106

95

125

0 2004
IDC

2005

2006

2007

2008

2009

2010

2011

2012

2013

2015

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11

70

50

85

145

162

176

39

72

246

Smartphones

Feature Phones

Smartphone Penetration
300

Smartphone Penetration:

63%
250

72%

11% 4%

50%
Smartphones:

200

150

100

Total Market Growth:

+20%*

* CAGR 20102015

+5%*
50 0 2004
IDC

Feature Phones:

-11%*
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: IDC European Quarterly Mobile Phone Tracker, May 2011
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Smartphone Penetration by Country

U.K.
b)

82%

France

b)

Germany

b)

79%

70%

50%

42
43%

30
3 11% 10
4 12% 10
2015
b)

4 12%
2007

20
2010 2015
b)

33%

29
2015
b)

2007

2010

2007

2010

Italy

60%

Spain
33%

56%

Netherlands

83%

26%

18

14
1 16%
2015 2007

51%

3
IDC

9%

2
2007

12%

7
2010

4
2010 2015

2007 2010 2015 Notes: a) Shipments in millions of units, per country in 2007, 2010 and forecast for 2015. b) Percentage of smartphones of total shipments per country for 2007, 2010 and forecast for 2015.

Smartphones

Feature Phones
8

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11

Winners and Losers

IDC

May-11

Winners and Losers: Total Phones

Vendor Market Shares
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2004
IDC

35%

11% 15% 16%

12%

2% 4% 16% 15% 4% 6% 12% 11% 8% 10% 4% 9% 8%

25%

20%

11%

9%

13%

12%

12%

8% 10% 5% 31%

6%

Others

HTC
RIM Apple Sony Ericsson Motorola Samsung Nokia

22% 26% 28%

9%

15% 16%

27%

34% 35% 35% 40% 40% 37% 34%

28%
1Q11

2005

2006

2007

2008

2009

2010

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11 10

Winners and Losers: Smartphones

Vendor Market Shares
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2004
IDC

17%

15%

16%

7% 7% 4% 10%

7%

3%

9% 12% 15%
12%

8% 6%

4% 9%

2% 7%

5% 10%

8% 12%

16% 22%

17%
21% 6%

Others

21% 7% 6%

HTC
RIM Apple Sony Ericsson Motorola Samsung Nokia

71% 66% 65% 61%

53% 50% 33%

14% 20%
1Q11

2005

2006

2007

2008

2009

2010

Source: IDC European Quarterly Mobile Phone Tracker, May 2011 May-11 11

Smartphone Operating Systems

IDC

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Shipments by OS: Smartphones

Millions

200 180 160 140 120 100 80 60 40

WinMob/WP7
iOS Symbian Linux BlackBerry OS Android
2%
15% 24% 13%

44%
20 0

2004
IDC

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015
May-11

Source: IDC European Quarterly Mobile Phone Tracker, May 2011

Media Tablet Trends

Eszter Morvay Research Manager IDC EMEA Personal Computing

Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Tablets Are Not New ... Or Are They?

Source: IDC EMEA PC Tracker and IDC EMEA Media Tablet Tracker IDC May-11

Media Tablet Definition

Media tablets are multifunction electronic devices designed and marketed to enable access to and creation of a wide range of digital content and services including media and communications. They are typically more portable and leverage lighter-weight hardware than portable PCs. Media tablets are tablet form factor devices with color displays larger than 5.0in. and less than 14in.; they run lightweight operating systems such as Apple's iOS and Google's Android OS and can be based on either x86 or ARM processors. This distinguishes them from tablet PCs, which run full PC operating systems and are based on x86 processors. Media tablets support a broad range of applications, which differentiates them from single-purpose-focused devices such as ereaders, and can support multiple connectivity technologies. Media tablets may support cellular voice connectivity as a secondary feature. Media tablets do not include built-in hardware keyboards, but typically use a finger for navigation and data input.
IDC May-11

From Smartphones to Notebooks: Expansion of the Mobile Computing Space

Notebook Ultraportable Netbook

Media tablet
eReader MID Smartphone

CONSUMPTION
IDC

CREATION
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Multiple Usage Scenario: Multiple Devices

It's not a question of whether it's just how many

One type does not preclude another

Different needs for different people Unique needs, unique biases, unique preferences

IDC

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Winners and Losers

IDC

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Can They Beat Apple? Yes, They Can!

Western Europe Media Tablet Forecast By OS
30 iOS 25 20 Android webOS BlackBerry OS

M Units

15 10 5
0 2010 2011 2012 2013 2014 2015

Source: IDC EMEA Media Tablet Tracker IDC May-11

Competitive Analysis
Brand awareness Rapid pace of innovation Ecosystem Price Resistance from B2B although evaluating

Plethora of devices Aggressive price points Broader routes to market

Lack of differentiation between brands Resistance from B2B although evaluating

Large PC footprint: both consumer and commercial Synch across various webOS devices Lack of leverage from Palm acquisition Costly R&D: huge risk

Large smartphone footprint Leverage from enterprise installed base Weak consumer footprint Uneven geo coverage, strong reliance on a few markets

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What About Windows?

Source: IDC EMEA PC Tracker and IDC EMEA Media Tablet Tracker IDC May-11

Competitive Analysis
Media Tablet
Instant on All day battery life User interface Applications

Slate Tablet PC
Compatibility across a huge Windows installed base Security Manageability Price Lack of applications User experience

Product design
Mostly content consumption, limited content creation Lack of security

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Cannibalization?
Units, Millions

250

Media Tablets Smartphones

21% 21% 20%

46 42

200

19% 15% 7%
29
19 125

150

37

100

5
50

145

162

176

105 72

0 2010
IDC

2011

2012

2013

2014

2015
May-11 24

Conclusion
1. Smartphones will account for 72% of total handset market by 2015. 2. Smartphones will grow at a CAGR of 20% from 2010 to 2015.

3. Android will be the biggest operating system from 2011.

4. Media tablets will clearly be the hottest growth opportunity over the next 18 months in the consumer mobile/computing space. 5. Expansion of the mobile/computing space: new usage scenarios drive increased penetration of secondary and tertiary devices. 6. Primary focus on consumers, increasing interest from businesses. 7. Apple iPad will dominate in the short term, but the competitive environment will expand.

8. No cannibalization is expected between media tablets and smartphones.

IDC May-11 25

Q&A

IDC

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Contacts
Francisco Jeronimo
+ 44 (0) 20 8987 7186
fjeronimo@idc.com

Eszter Morvay
+ 44 (0) 20 8987 7229 emorvay@idc.com

@fjeronimo

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