Where can I buy one of those phones made by this company "Other"? They seem to be pretty damn popular: the number sold by them has gone from 49.9m worldwide in 3Q 2009 to 137.8m in 3Q 2010, according to the figures from Gartner released earlier this week. That's a rise in share from 16% to 33% - a rise in sales in percentage terms of 176% (ie, it nearly trebled); only HTC came anywhere near that, growing 144% mainly on Android phone sales, but only from 2.6m to 6.5m.
As Horace Dedlu at Asymco points out, that sort of growth in relative and absolute numbers is so gobsmacking that you have to wonder what's going on. Dedlu, who takes something of a bargepole approach to analysts' figures, tries to triangulate it with IDC numbers:
"IDC reports the same data and they only reported 340.5 million phones sold (vs. Gartner's 417 million). Excluding ZTE and Huawei the total share for "Others" in IDC would be about 20%."
He reckons the difference in "Others" is about 77m (dumb)phones:
"If Gartner is right, how could IDC miss 77 million phones? If IDC is right how did Gartner conjure up 77 million phones in one quarter? That number is nearly as big as all the smartphones sold (81 million). This is not within any margin of error for whatever sampling method they use."
I had been puzzling about those numbers myself even as I was putting up the tablets. It's a good question - because if you can't trust those numbers, then your faith in the bigger picture starts to crumble. So I asked Gartner about the apparent gulf and whether it could solve the mystery of those extra phones.
(Yes, there was discussion in the comments of the original visualisation - kudos @Bert9000 and @FKafka for going after it; you were posting your comments about an hour after this was drafted – though not of course written.)
"The long and short of it, from speaking to the analysts, is that it's now relatively simple to assemble a basic mobile phone, lowering the barrier to entry for mobile manufacturers. It's not *quite* the same as the early PC white box market, but there are parallels. There's huge demand for basic (ie, voice and SMS) handsets in Asia and Russia that is now being tapped by these manufacturers."
Gartner's PR also pointed us to a couple of previous releases on the topic: Gartner Says Indian Mobile Handset Sales To Reach 138.6 million in 2010, which points out that that is an 18.5% growth year on year, and that
"The Indian cellular market is very dynamic. New carriers and many new local mobile device manufacturers have entered this already crowded mobile device market. This intense competition has led to very low call rates and low-cost devices from multiple manufacturers in the market. This market was previously dominated by just a few vendors such as Nokia, Motorola, Reliance and Vodafone."
So what's happening?
"Established global device manufacturers are losing ground due to fierce competition from local and Chinese manufacturers in the low-cost segment," said Anshul Gupta, principal research analyst at Gartner. "Price remains the main criteria when buying any consumer electronic device in India, including a mobile device. Carrier strategies, lower tariffs and/or third-generation (3G) data plans will continue to shape the mobile device market in India."
Then there's Gartner Says Mobile Connections in India Will Grow by 27.3% in 2010 - the latter noting that "India is expected to remain the world's second largest wireless market after China in terms of mobile connections", and that
"The arrival of new players in the Indian mobile sector has led to fierce competition which has sustained the strong subscriber growth we saw in 2009," said Neha Gupta, senior research analyst at Gartner. "Furthermore, with mobile penetration standing at 44.5% at the end of 2009, there is still ample room for growth in 2010 and beyond."
Note that these are dumbphones - simply able to do calls and texts. The proportion of "other OS" phones in the smartphone segment remained static, at 1.5%, even while the number sold from 612,000 to 1.2m.
Quite what and where those "other" OSs are in the smartphone market... we're guessing Japan and China as being where they get used, but more information is always welcome.
Then again, over at Fortune, Philip Elmer-DeWitt was contacted by someone who says they used to work at Gartner, and analysed the PC market - "but the methodolgy is the same for phones". (You can find their comment below the main article, timed at 11.29; the comments run in reverse chronological order.)
S/he says, inter alia:
"So, in 3Q98, I analyzed the "choke points," those parts of the supply chain where the channel narrowed enough to get a definitive count. At the time, it was OS, processor, graphics, and hard drive. As I recall, I found 20 million processors with no homes. The market at the time was about 100 million, so this was a 20% discrepancy.
"The process that ensued was a marvel of obfuscation. The leader of the Tracker team figured out a way to rationalize away all the extra units (e.g., multiprocessor servers, inventory, speculation, etc.). It was politically impossible to force the extra units on the regions because it would introduce gross distortions to the historical trends.
"So, the mantra became, preserve the growth rates; to hell with the actual numbers. Even the growth rates are fiction. The fudge is in the "others" category, which is used as a plug to make the numbers work out. In fairness, we did do survey work, calling around, and attending white box conferences and venues to try to get a feel for that market, but in the end, the process was political. I used to tell customers which parts of the data they could trust, essentially the major vendors by form factor and region. The rest was garbage.
"The industry itself was aware of these issues, but agreed to maintain the fiction because it was convenient. Most vendors kept their own numbers, but referred to IDC for public purposes. Thing is, real executives got real compensation based on our numbers. There were other games played, but that's for another time."
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