Samsung’s supremacy in the mobile business is no accident. In 2012, the South Korean electronics giant overtook Nokia to claim the number one spot with 23.4 percent of mobile phone market and extended its lead, massively, over Apple in the smartphone market taking 30.3 percent, according to IDC, Gartner and Strategy Analytics (see the tables below). Samsung also knocked Apple off its perch to become the best-loved smartphone vendor in the US-based Brand Keys 2013 Customer Loyalty Index.

So what’s the secret to its success? Samsung is a master at giving consumers what they want: choice. Samsung offers a mobile phone to suit every customer’s requirements, at all price points, on a variety of different operating systems, while its rivals offer a restricted or – in the case of Apple – no choice.

All companies that want to engage customers via mobile should emulate Samsung. In the free-market economy, customers must be allowed to choose what type of handset they want to use and to engage with companies via the mobile channel of their choice, be that SMS, mobile Web, email or native app. Companies have to fit their mobile strategy to suit consumer choice. Companies that are prescriptive in their mobile engagement, epitomized by companies that only offer an iPhone or Android app, are pushing all their other customers (both those that have a different handset and those who simply don’t want another app cluttering up their cell phone) into the welcoming arms of their competitors.

The facts:
• Despite the growing popularity of smartphones (sales grew 44 percent in 2012, according to IDC), 59 percent of mobile purchasers still bought a feature phone in 2013.
• Despite the meteoric rise of the Android operating system (OS), which is used in handsets from Samsung, ZTE, HTC and others, 70 percent of mobile purchasers didn’t buy an Android handset in 2013.
• Apple might be the number two smartphone vendor, but 86 percent of people who purchased a mobile in 2013 didn’t buy an iOS/Apple handset.

The outlook:
• Smartphone sales are projected to grow worldwide at 17.9 percent per year between 2012 and 2016. In 2016 Canalys (February 2012) believes there will be 1.3 billion smartphones sold in 2016, which is twice the amount sold in 2012 (see table below). In 2016, Canalys forecasts that twice as many smartphones will be sold as feature/basic phones – today feature phones outsell smartphones.

• Smartphone sales growth will be driven mostly by demand in developing nations, says Canalys. In 2013, 29 percent of smartphone sales will be in China, where low-end smartphones, particularly from local vendors – e.g. Lenovo, Huawei and ZTE – are expected to do well.
While Samsung was the top smartphone vendor in China in Q4, Apple is struggling to make much of an impact, as the iPhone is too expensive, says Canalys.
• In 2016, IDC forecasts that Android (project market share in 2016: 64 percent) and iOS (19 percent) will have a similar share of the smartphone market as they do today, as will BlackBerry (RIM) (4 percent), but Windows (11 percent) will overtake BlackBerry to take third place. N.B. IDC’s forecasts preceded the launch of BlackBerry 10, which caused much media excitement. See the table below.
• Canalys (February 2012) expects Android-powered handsets to take 71 percent of the smartphone market in 2013, then to gradually decline to 66 percent in 2016.
• The wildcards in this game are the new HTML5-friendly operating systems based on Linux. These give handset manufacturers and operators, as well as consumers more choice. These OS include Tizen (Samsung, Intel and supporters), Firefox (Mozilla and supporters) and SailFish (Jolla and supporters). However IDC, (surprisingly, considering the growing number of supporting partners), only forecasts a market share of less that 2 percent for these in 2016.

Samsung – the champion of consumer choice
So let’s get back to Samsung…
Analyzing the products available from the top five handset and smartphone manufacturers tells a very interesting story.
In the US alone, Samsung offers 153 different cell phones. Feature phone or smartphone? Cheap or expensive? Big or small? Flat-screen or physical QWERTY keyboard? 4G or 3G? NFC? Bluetooth? WiFi? Flip phone? Rugged phone? GPS? Whatever the customer wants, within reason, Samsung provides. It offers smartphones with a variety of operating systems (OS): Android, Windows, Bada (a home-grown OS) and there are plans to launch phones based on Tizen. The idea behind Tizen, supposedly, is to help Samsung reduce its reliance on Android.
Aside: Considering its relative OS ambivalence, is it fair to speculate that Samsung would sell smartphones based on iOS and BlackBerry 10, if Apple (unlikely) and BlackBerry (it’s been speculated) were prepared to license their proprietary OS?

Compare this to the competition (numbers apply to product availability in the US – expect the Asian manufacturers to offer a wider range of phones in developing markets and or home markets, such as dual-SIM handsets):
• Nokia (Finland), formerly the top vendor in both handsets and smartphones, now No2 and No3 respectively, offers 21 handsets worldwide, including feature phones and smartphones, but only 8 handsets in the US. Since Nokia killed Symbian OS (which at the time was long-time market leader), and then abandoned MeeGo, it now only offers smartphones on the Windows platform – currently only flat-screen models.
Point of interest: MeeGo spawned two of the new Linux-based OS Tizen and Sailfish.
• Apple (USA), No3 in handsets, No2 in smartphones, only offers one choice – or three if you include older models – (albeit a popular one): the iPhone, a touch-screen smartphone running Apple’s iOS.
• ZTE (China), No4 handset vendor, offers 22 handsets, including feature phones, Android and Windows smartphones, options include flat screen or QWERTY keyboard, various screen sizes, GPS and 3G/4G. The Chinese manufacturer plans to launch a smartphone powered by Firefox OS at Mobile World Congress this month.
• LG (Korea), No5 handset vendor, offers 61 handsets, predominantly Android smartphones, in both flat-screen and QWERTY, 3G or 4G, with a dual-core or quad-core processor.
• HTC (Taiwan), No4 smartphone manufacturer, sells 19 flat-screen smartphones, running either Android or Windows.
• BlackBerry/RIM (Canada), No5 smartphone vendor, offers 13 smartphones, both touch-screen and QWERTY. The new flat-screen Z10 and QWERTY Q10 – the first smartphones based on the long-awaited BlackBerry 10 OS are not yet available in the US. The Z10 is apparently selling well in Canada and the UK. The Q10 isn’t on sale anywhere yet.

Of course there’s a lot more to Samsung’s success than handset variety. This includes pricing, marketing, perception and the quality of the product – announcing the Q4 results, Samsung credited much of its year-on-year mobile growth to sales of its high-end Galaxy smartphone. But the fact that Samsung offers so much more choice to consumers than its competitors has to be significant. mobiThinking isn’t alone in coming to this conclusion – according to media reports part of the reason for the recent fall in Apple’s share price is investor concern at Apple’s one-smartphone strategy.

And now the stats…
• The first table shows Samsung’s growth to become the dominant handset vendor ahead of Nokia, which was the market leader in 2011.
• The second table shows Samsung’s growth to become dominant smartphone vendor. In 2011 both Samsung and Apple were neck and neck as No1 and No2 in Smartphone vendors (prior to 2011, Nokia was the smartphone market leader) but in 2012 Samsung sold more than 50 percent more smartphones than Apple.
• The third table shows the forecasted shares of smartphone operating systems in 2012 and 2016.
• The forth table compares the projected growth of mobile devices, including feature phones, smartphones, tablets and notebooks in 2012 and 2016.

Tables 1&2: Top feature phone and smartphone manufacturers by global sales

Table 3: Smartphone operating systems

Table 4: Comparative sales of mobile devices