Nokia Picking Up Market Share, BlackBerry Slipping Back

Includes: BBRY, NOK
by: jaberwock

For the past two months, I have been tracking the websites of major smartphone retailers to see if I can establish sales trends. In the USA, two sites which provide listings of cell phones ranked by sales are Amazon and Best Buy. Both of these sites are updated regularly. Amazon claims to update its lists hourly, and the ranking on the Best Buy site seems to change at least once a day.

On May 5, I published an article, which estimated the sales of BlackBerry and Windows phones in Europe and the USA. I concluded that the two operating systems were in a close race for third place in the USA with about 2.5% of the market each. However, BlackBerry (NASDAQ:BBRY) was ahead in Europe mostly due to the popularity of the Z10 phone in the U.K.

It has now become apparent that Windows phones have gained a lead over BlackBerry in the USA. I now estimate that Windows phone sales exceed those of BlackBerry by about two to one.

The chart below shows my estimates of sales to consumers, using data collected in April, May, and in the first week of June. I have left Samsung and Apple (NASDAQ:AAPL) off the chart, so as not to distort the scale.

HTC sales have increased as a result of the launch of the HTC One, which is an Android-based phone. However, sales of the HTC Windows 8 phones have fallen significantly, and the Nokia (NYSE:NOK) Lumia now accounts for more than 90% of Windows phone sales in the USA.

In a report issued last week, BlackBerry bull analyst Peter Misek conceded that BlackBerry consumer sales in the USA had fallen since the initial launch. My own analysis confirms this. I have BlackBerry with less than 2% of the U.S. consumer market.

The biggest loser is Motorola, whose sales appear to have fallen drastically over the past two months.

The Galaxy S4 has taken about 10% of the U.S. market, but mostly at the expense of the S3 and the Galaxy Note II. Overall Samsung (OTC:SSNLF) market share has only increased by about 2%.

Amazon does not sell iPhones, so I have tracked Apple sales only on Best Buy. On the Best Buy site, the Apple iPhone5 has been the leading phone for some time. The S4 did take top spot very briefly, shortly after launch, but has now fallen back into second.

The launch of the S4 does not appear to have had any noticeable effect on Apple sales. In fact, Apple's market share seems to have increased slightly - probably due to the fact that Apple phones are now available on the T-Mobile network. The estimated market shares for the past three months are shown in the graph below:

The percentage market shares in this analysis may not be accurate. I have no means of knowing the margin by which the sales of the number one listed phone exceed those of the number two phone, and the number three phone etc. However, I have used the same mathematical model in the analysis for each month, so the trends identified should be reasonably accurate. Key conclusions are:

  • Nokia is gaining market share with the Lumia series of phones
  • The HTC One is doing very well, but sales of the HTC Windows 8 are fizzling out
  • BlackBerry sales have slowed down after the initial launch of the Z10. Any pent-up demand for the BlackBerry touchscreen phone is now exhausted and BlackBerry must rely on the Q10 keyboard phone and its enterprise business if it is to make further inroads into the U.S. market.
  • The much heralded and very heavily advertised Galaxy S4 has not taken any bites out of Apple's share of the market.

I am bearish about the prospects of all of the smartphone makers. As explained in a previous article, I think pricing pressure will seriously erode profit margins over the next couple of years.

However, I am still long BlackBerry. Sales of the Q10 phone in the U.K. and Canada are going well, and sales to enterprises (which will not show in my analysis) should begin to take off now that the Q10 is available. The short squeeze remains a distinct possibility if the quarterly results or guidance due out at the end of this month show a significant upside surprise.

Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.