Gartner's Smartphone Forecast Attacked

It really was a matter of time until someone would question the value of market forecasts that aim to predict the shipment volume of a product segment that has not left its disruptive phase yet and is likely to change its pace several times a year. Can you trust those four-year forecasts that now expect Microsoft's (Nasdaq: MSFT  ) Windows Phone market share to surpass Apple's (Nasdaq: AAPL  ) iOS smartphone market share by 2015?

Let's be realistic: You can't. But there is a traditional value in those forecasts, especially if you work in this industry and need to justify an investment in a particular product or service. We know that Gartner does not have a time machine from which it pulled back its analysts from 2015 and can now guarantee those numbers. Seriously, they are a best guess from today's view and therefore a limited tool for product planning.

Of course, we don't know how Gartner can come to a conclusion that Windows Phone will the second most popular smartphone platform by 2015, and quite frankly, I don't really care if Gartner is right or wrong. However, it is not unexpected that Apple Insider does not agree with that forecast and questions its foundation. The Gartner press release is a perfect example of a way to shoot yourself in the foot: It isn't particularly difficult to poke holes in Gartner's public conclusions -- there is just no reason to believe that Windows Phone will grow past Apple's iOS, and it is even more stunning that the analysts basically predict that WebOS is already dead.

We have questioned tablet shipment number forecasts a while ago and were chastised by analysts for our opinion and were heavily criticized by the analyst community. However, we are concerned that those numbers change virtually every month and that if you were to base your business on those forecasts, you'd probably be bankrupt within half a year. Those forecasts seem to have little value for businesses at this time.

Can we please return to some common sense? It is impossible to predict tablet and smartphone shipment numbers on a platform foundation four years into the future. Anyone who buys those numbers and takes them for fact has a serious reality-recognition issue. I tend to think that a 12-month outlook is much more valuable, as it can take current business and economic trends into account. Do we know how the economy will look in four years? Do we know what earth-shattering technologies will be invented and who will invent them down the road? These are just a few variables that can turn any forecast upside down. Let's keep that in mind.

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  • Report this Comment On April 10, 2011, at 4:25 PM, marv08 wrote:

    Of course, predicting the development of rather new markets four years into the future is insane, and these numbers are pointless, especially when coming from a shady outfit like Gartner, who have worked as a paid marketing outlet for MS since more than a decade. Ask some people with the slightest insight into the happenings at Nokia, it would be a miracle if the have a WP7 based lineup in place anytime before mid/fall 2012. There are already 2 huge Asian forks of Android in distribution, Motorola is hiring OS developers, Samsung continues to invest in Bada, HP will heavily promote WebOS by putting it (as a second OS) on millions of desktops and laptops... And nobody who is the least bit serious will expect Apple to stand still... Whatever the market will look like in 2015, it will have nothing to do with the nonsense Gartner (and IDC before them) has been throwing up here.

    Unfortunately, blogs and the press demand these numbers all the time. The quarterly sales numbers (for computers and phones) made up by Gartner and IDC are communicated as facts all the time. They include dozens of companies (outside the US) not even reporting any numbers, Gartner has more than once reported Chinese sales of OPhone smartphones (a fork of Android that is 100% disconnected from Google) as "Android Sales" and their "sales channel checks", normally reported a couple of days before companies report their quarterly earnings, had to be corrected ad nauseam.

    Whoever trusts this nonsense, does not deserve any better.

  • Report this Comment On April 10, 2011, at 4:32 PM, Henry3Dogg wrote:

    Can someone point me to any predictions made by Gartner, similarly soon after the iPhone launch, that predict the level of iPhones success, and the size of the market that they have now taken. If not, then what credibility do they have?

  • Report this Comment On April 10, 2011, at 4:45 PM, Superstef wrote:

    It's even worse than other comments say. Gartner does not even utilize proper mathematical tools to derive its derisive 'forecasts'. Consider these 3 remarkable assumptions underpinning their 'research' (I use the term loosely... very loosely)

    (1) They published a four year forecast with seven significant digits of precision (implying a margin of error of 0.00001%).!!! ASTONISHING AND UTTERLY UNBELIEVABLE.

    (2) They say there will be a linear growth in total market size. THERE IS NO EVIDENCE PRODUCED TO SUPPORT THIS REMARKABLE ASSUMPTION.

    (3) There are no significant share changes after 2012. JUST WHEN YOU THOUGHT GARTNER COULD GET NO MORE RIDICULOUS, IT GOES ON TO MAKE THIS INCREDIBLE ASSUMPTION.

    (thanks to Horace Dediu of asymco for these insights)

    Apparently, anyone can be an 'analyst'. I've decided to become one myself. My first forecast is that Gartner will the scriptwriters of choice for Comedy Central by 2015

  • Report this Comment On April 10, 2011, at 5:19 PM, daveshouston wrote:

    When cellular telephones were first introduced, phone calls were the primary use for the device. I have an iPhone and would rank verbal telephone communications as barely making it into my top thirty apps (uses) for the device. I often use it to avoid time consuming phone calls. I no longer have to make a phone call to check movie start times or make a restaurant reservation. My iPad is even more useful than my iPhone. I like the fact that they're tightly integrated and synced together. Having a mix of devices from different manufacturers would be a relative nightmare. iOS runs on iPads, iPod Touches, Apple TVs, and iPhones. Users are better off when they stick within the eco system.

    There are soon to be about 200 million iOS users out there with customer satisfaction north of 95%. If you have a couple hundred million loyal satisfied customers with about a two year replacement cycle then you'll be hard to knock off your perch.

    Apple defined what a smart phone should be and everyone else is trying to copy them.

    Android is successful because Google is giving away the operating system for free and it is a lifeline for handset manufacturers like Motorola and HTC.

    Microsoft has long been the world champion of copy-cats. This time they're very late to the party. Nokia's Symbian platform is on the way out. Putting Microsoft and Nokia together to challenge Apple and Android reminds me of Burroughs and Sperry Univac getting together to challenge IBM in mainframes.

    HP/Palm also way late to the party. Their chances of success would be roughly double those of Microsoft/Nokia. But then doubling zero still leaves you at zero.

  • Report this Comment On April 10, 2011, at 9:21 PM, whoawhat wrote:

    You say "quite frankly, I don't really care if Gartner is right or wrong" then you immediately point toward Apple Insider.

    FAIL

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