In its most recently reported quarter, Apple mobile devices - which are full-fledged computing platforms - outsold Hewlett-Packard's entire PC lineup. That Apple outsold HP is noteworthy in and of itself. It turns out that there is even more to tell here when it comes to the overall sales figures of mobile device computing platforms vs. sales of traditional PCs. According to just-released Canalys research, total Q4 2011 estimated global shipments of smartphones to clients exceeded those of client PCs for the first time.
Unlike in Apple's case, where the comparison was made based on the combined shipments of iPhones and iPads vs. HP's PC shipments, the Canalys research groups tablets and PCs together, making the sale of smartphones an unprecedented occurrence with implications for significant ongoing smartphone penetration, especially in the enterprise.
The chart below provides details of these shipments. 158.5 million smartphones were shipped in Q4 2011, a significant 57% increase on the 101.2 million units that were shipped a year earlier, in Q4 2010. Total global shipments for the entire year surged to 487.7 million devices, up a whopping 63% on the 299.7 million smart phones shipped throughout 2010. By comparison, the global client PC market grew 15% in 2011 to 414.6 million units. PC growth was essentially stagnant, but the 274% growth in tablet shipments, which accounted for 15% of all client PC shipments in 2011, brought the total number up.
The huge increase in tablet demand comes at the expense of traditional PC hardware - with desktops, notebooks and netbooks all taking hits in terms of rate of units shipped. That isn't surprising, and we can anticipate the trend continuing. An interesting question arises based on these numbers: will ultrabook shipments based on Windows 8 and the Metro UI shift the dynamics away from tablet growth in the enterprise? Intel and a number of its ultrabook partners are certainly betting on this. It will be very interesting to see if tablet shipments continue to build enormous momentum, and if that momentum will kill ultrabook sales down the road.
Smartphone shipments, meanwhile, are not the least bit impacted by the surge in tablet sales. Indications are that users will acquire both depending on their needs - acquiring a tablet will not affect smartphone sales. We can certainly anticipate that smartphone sales will continue to drive feature phones out of the marketplace in North America, Europe and the more modernized societies in Asia. Users can now pick up certain Android smartphones for free with new contracts - and soon enough Nokia will begin to make inroads here as well.
Nokia is also an interesting case as far as feature phones go - because Nokia has a huge feature phone market it is in the best position to drive low-cost Windows Phone 7 devices into those markets. In short order feature phones (which require a great deal of internal and proprietary OS and hardware support) will disappear as smartphone prices drop due to economies of scale.
It is a buyers' market, and enterprises must now clearly accept the fact that BYOD is here to stay. Any enterprise that is still on the BYOD fence can only be considered a laggard at this point. That extends not only to enterprise thinking relative to employees, but also to the B2C apps that will be deployed.
Tablets are an entirely different story. We can anticipate that enterprises will look for much greater control of tablet deployments and tablet-based mobile apps as we head into the next 18 - 24 months. It is this anticipated enterprise control that will give Windows 8-based ultrabooks a potential fighting chance to develop into a significant market. By exerting control over tablets enterprises can - and very likely will - circumvent the BYOD tsunami. In many cases an enterprise may prefer the greater flexibility of ultrabooks to tablets.
Apple, as everyone already knows, had a monster quarter and became the leading smartphone and client PC vendor in Q4 2011, with shipments of 37.0 million iPhones, 15.4 million iPads and 5.2 million Macs. It also eclipsed the record for the most smartphones shipped globally by any single vendor in one quarter, beating Nokia’s previous record of 28.3 million shipped in Q4 2010. The 93.1 million iPhones Apple shipped in 2011 translates into a growth rate of 96% over 2010!
Samsung, Nokia, and RIM Oh My…
When the tide rises, all boats rise with it. In truth, even though RIM has delivered the kinds of numbers that smack of failure, it never the less increased its shipments by 5%, as the chart below shows, and its email subscriber base now tops 75 million - that is a substantial number by any stretch of the imagination. It's just not Apple numbers. We've covered RIM's issues at length and the fact that the company actually did grow somewhat in 2011 is obscured by the dynamics of the market in general. RIM has a good shot of getting back into the game if it can pull off a heady BlackBerry World 2012…it's a longshot, but we're rooting for RIM to do so.
Samsung, meanwhile, is the "other" company that makes both RIM and Nokia look bad. It had its own stellar year of sales, with 35.3 million smartphones in Q4 2011 under its own brand, bringing its total to 91.9 million for the year, compared to sales of only 24.9 million in 2010. Samsung also ships rebranded products, with Google's Nexus S and Galaxy Nexus being the most prominent. The Canalys research doesn't include these as Samsung sales; they are instead counted as Google sales.
Nokia continues to deliver negative financial news, but underlying the current fiscal cycles of negative results, there are a few things to cheer. Total smartphone shipments for the year came in at 77.3 million globally, although the number was driven almost exclusively by non-Windows Phone 7 devices. For Nokia to have a prayer at ensuring it will at least find a toehold in North America that it can leverage for future growth it will have to have great success with its Lumia series of Windows Phone 7 smartphones. The Lumia 900 is a very impressive device - if Nokia can ship it quickly it may find that toehold. Nor can Nokia stop at North America - as noted earlier, we anticipate that Nokia will create a vast Windows Phone 7 market where it now sells its feature phones and cheap Symbian phones. It cannot disappoint here.
There are very interesting potential obstacles for Nokia - how quickly will Microsoft, for example, deprecate WP7 in favor of Windows 8? If it does so, how quickly can Nokia adapt? And where is Nokia's competitive tablet? We have no ready answer for that.