Pyramid Research Debunked: When Analysts Live in Dreamland


Usually I do not comment on forecasts, as I am a forecaster myself and we all make tons of mistakes in our forecasts, that is the nature of the beast. It is impossible to be completely accurate, and if by some miracle a forecaster hits it on the nose, that is always an accident. The best we can hope for as forecasters, is to be less wrong than most, and to be right more often than wrong.

But this disclaimer does not excuse stupidity and it does not excuse unprofessionalism. Pyramid crossed the line with the most absurd forecast of the new decade – to go back to find the previous similarly ludicrous forecast, we have to go back to the moronic piece by Forrester Research from 2001 when they promised the 3G licenses would bankrupt the telecoms industry with only 4 operators/carriers to survive out of Europe (T-Mobile, Vodafone, Telefonica, Orange). Today, we all know those hundreds of billions of dollars invested in UMTS licenses were paid off in multiples.

On May 9, Pyramid Research released its forecast for smartphone market shares, where it forecasted that Microsoft’s Phone 7 operating system will not just be the biggest OS in the year 2015, they will pass number 2, Android by year 2013. Yes. Microsoft (with Nokia) would pass Android, in about two years. This from the smartphone operating system vendor (Microsoft) who never even had a quarter of the market even before Apple came in and changed the game, and this from Nokia who saw its market share crash by a third in just the past 12 months – against Android which is the world’s biggest smartphone OS, and which grew by more than doubling just in the past 12 months and reports very strong growth for this quarter already. Meanwhile, Microsoft’s new OS was not even able to outsell the outgoing Microsoft smartphone OS in the latest quarter for which we have full data.

Pyramid Research Prognosis - Only problem is that Windows Phone OS has a wrong market share in both 2009 and 2010.

Pyramid Research Prognosis – Only problem is that Windows Phone OS has a wrong market share in both 2009 and 2010.

What is worse, from Pyramid, is that they are not willing to tell us why. They show a projection of market shares which is suspicious on many levels and then refuse to explain why. Note that all other major analysts who specialize in mobile have said Android would be an easy dominant number 1 up to year 2015 or 2016 at least (vs. Pyramid who thinks Microsoft can pass Android by 2013). And that many have ridiculed Pyramid about this already. After Facebook paid PR agency to launch the Google FUD Campaign, could this be a second Trojan horse in as many weeks? Who paid for this?

The Pyramid forecast is as follows (I have taken approximate values from their graph, these may be off by a percentage or two, it’s the best I could do):

  • Symbian goes from 38% in 2009 and 31% in 2010 to 25% in 2011 to 8% in 2012 to 2% in 2013
  • Android goes from 5% in 2009 and 22% in 2010 to 28% in 2011 to 30% in 2012 to 32% in 2013
  • Blackberry goes from 21% in 2009 and 18% in 2010 to 14% in 2011 to 12% in 2012 and 10% in 2013
  • Apple iPhone goes from 12% in 2009 to 14% in 2010 to 16% in 1011 to 14% in 2012 to 12% in 2013
  • and Windows goes from 16% in 2009 to 11% in 2010 to 11% in 2011 to a massive jump to 28% in 2012 and 35% in 2013

Stela Bokun and Pyramid Research Are Incompetent?
First on the facts. Their base case up to year 2010 is massively faulty! The facts are out there, we have several analyst houses who publish smartphone operating system market shares on a quarterly basis, that I also collect here for my readers. The full year 2010 market shares are as follows, vs. Pyramid

Symbian . . . . . . . . . . . . . . . . .  31% . . . . . . . . . . . . . . . 38%
Android . . . . . . . . . . . . . . . . . . 22% . . . . . . . . . . . . . . .  23%
Blackberry . . . . . . . . . . . . . . . . 18% . . . . . . . . . . . . . . . 16%
Apple iPhone . . . . . . . . . . . . . . 14% . . . . . . . . . . . . . . . 16%
Microsoft Windows + Phone 7 . . 11% . . . . . . . . . . . . . . .   5%

Note first, that by Fourth Quarter of 2011, the picture is so bad, for Symbian and Microsoft vs. Android, that by the last quarter for which we have full data, the picture is this badly distorted against that forecast:

  • 4Q 2010: Symbian 32%, Android 30%, Microsoft OS’s both added together (Windows and Phone 7) 3%

The incompetent analyst at Pyramid draws a picture for us, where the ‘pattern’ of market share decline for Microsoft should be crashing from the 16% it was in 2009, to the 3% it is today, yet Stela Bokun of Pyramid Research shows a graph, where Microsoft ‘bottoms out’ at about 11% and TURNS TO GROWTH.

In reality from the 5% Microsoft had for all of 2010, the market share was in deep dive all year to the end of the year, and is far worse now. The ‘Nokia effect’ cannot lift Microsoft Windows/Phone 7 OS market share because no Nokia-Microsoft phones are in the market (and Nokia Chairman Jorma Ollila said quantity shipments of Microsoft powered smartphones would only be sold in 2012).

Meanwhile on the Symbian picture, the crash-dive of Symbian is not correctly depicted either by the so-called analyst Stela Bokun of Pyramid Research. They suggest Symbian was at about 31% for the year 2010, when in reality Symbian had 38% of the market for the full year. And by the last quarter of 2010, Symbian had crashed to 32%, and Nokia statements about Q1 tell us that its current market share for 1Q is about 26%. How the unprofessional research house Pyramid Research can suggest Symbian to finish the year 2011 at about 25% when already today it is at that level.

Even new Nokia CEO Stephen Elop has already said Nokia smartphones will suffer severe decline in market share the next few quarters before Microsoft phones arrive. What planet is Stela Bokun from? They don’t deal with facts over there in the bizarre galaxy Pyramid does its Research at.

Other Symbian family members. In 2009, at the start of the point of the reported period by Pyramid, Symbian handsets were manufactured by Nokia, Samsung, LG, Motorola, SonyEricsson, Sharp and Fujitsu, seven of the world’s 10 largest smartphone makers. Today Samsung, LG, Motorola, SonyEricsson, Sharp and Fujitsu have all shifted part or all of their smartphone production to Android, which also includes HTC and major dumbphone makers ZTE and Huawei both currently selling enough smartphones to finish in the top 10 for the full year if the pattern continues in 201

Most of all, Symbian’s Japan leader, NTT DoCoMo has announced a shift away from Symbian, as it sees the end to the platform. NTT DoCoMo, Japan’s biggest mobile operator is now favoring Android.

In the Windows Family, before Microsoft’s Phone 7, the older Windows Mobile had support by Samsung, LG, SonyEricsson, HTC and Motorola – all which also make Android phones. Today Motorola says it won’t do Windows Phone 7. And Samsung has built its own bada operating system, so where Samsung does multiple operating systems, its priority will be bada, not Microsoft. Meanwhile LG and HTC have announced support of the newest OS, the one that Nokia abandoned, MeeGo, being developed by Intel. This is relevant because the world’s biggest mobile operator, in the world’s biggest market, China Mobile has announced its support of MeeGo. China Mobile subscriber base alone is twice the size of the total USA market.

In the Phone 7 market, all of the previous Phone 7 providers (HTC, Samsung, LG, SonyEricsson among the top 10 biggest smartphone makers) were stunned and angered when Microsoft was said to have paid Nokia ‘billions’ to join Phone 7. As all of these four makers support Android, and three of them support a third OS, it is easy for them to ‘punish’ Microsoft by supporting an alternate OS like bada and MeeGo.

Pyramid’s 2011 Projection is a Pure Fantasy
The projection of Pyramid’s 2011 numbers is beyond reality, which clearly illustrates how incompetent their analyst is, and how unprofessional Pyramid Research is for allowing this forecast to be released. If now in the first quarter of 2011 we see Symbian crashing in the past four quarters from 43% to 36% to 29% to about 26% – and almost all past Symbian partners have ‘deserted the sinking ship’ and BOTH of the two remaining partners are shifting out – and the bigger partner, Nokia, says its next quarters are going to be worse, it is sheer stupidity for Pyramid to suggest 2011 Symbian market share will be about 25%.

For Stela Bokun and Pyramid Research to suggest Symbian now completely halts the most dramatic smartphone market share decline in history (witnessed in previous 12 months) somehow suddenly – and against the word of the CEO of Nokia who said the decline is to continue – then Stela Bokun and Pyramid Research must reveal to us potential customers and consumers and the audience, what makes them think that this trend is broken now?

What do they know that we do not? Pyramid Research owe us that explanation, why the 2011 Symbian share is now somehow ‘not declining’ for the rest of this year, when even Nokia said it will decline? That Pyramid draws it in a picture without telling us why, is rude and misleading and vastly disrespectful of the industry and a disgrace, a slap in the face of all serious professional forecasters who do a tough job in a difficult industry.

Microsoft Share is Completely Wrong
The far worse ‘reporting’ that the so-called expert and ‘analyst’ Stela Bokun of Pyramid shows in their graph, is the Microsoft market share, which they report as about 11% in 2010, to hold steady at that about 11% for this year (before somehow shooting up like a rocket in 2012)

That is patently false. Pyramid Research are misleading its customers and the general public. They are not just incompetent, they are liars! Microsoft’s market share last year was less than half that! At 5%. and their market share was crash-diving, to 3% by the end of the year. Their current market performance is so bad, Microsoft refused to give the number at their quarterly results for 1Q. If Pyramid want to claim that Microsoft’s market share will be flat this year – that is going against all facts but if so, they have to draw Microsoft’s 2011 market share at between 3% and 5%, not at 11%. And that if Pyramid Research feel Microsoft this year has somehow halted the decline of smartphone OS market share, before any Nokia phones are sold, then Pyramid has to explain ‘why’. Why do they think this miracle is happening?

But Pyramid cannot claim Microsoft OS smartphones sold about 11% last year. That is not true. And if they ended the year at 3%, it is beyond any stretch or realism, to suggest they somehow JUMP to almost 4 times better market share this year BEFORE the Nokia phones come – and AFTER Microsoft angered all existing Phone 7 partners with the billions paid to Nokia.

If Pyramid wants to forecast that next year 2012, Microsoft can make the most dramatic growth in market share ever witnessed in smartphones – better than the iPhone mind you – and better than Android did, with only half as many partners most of whom prefer Android (which costs them nothing) vs. Phone 7 (for which they have to pay a license fee to Microsoft for every phone) – that is Pyramid’s prerogative.

But I am not letting them get away with lies. Symbian’s market share last year was nowhere near 31%, and Microsoft’s was nowhere near 11%. That Pyramid Research shows this kind of bullsh*t to the industry tells me three things – one, they are desperate to get attention. 2, they have suspended any professionalism to sell reports, and 3 they are unethical.

So, can Microsoft become number 1 in 2013. Judge for yourself. Google currently activates 400,000 smartphones every day. That’s 146 million smartphones on an annual basis, and 36.5 million per quarter. That is about 37% market share CURRENTLY for Android, which is growth of 7 market share points from the Christmas quarter. Meanwhile Microsoft ended last year at 3% and is still declining sales. Nokia’s market share as projected by several respected analysts will be in or near single digits by end of year, before Microsoft smartphones are sold in meaningful numbers.

Pyramid suggested Android will continue to grow all the way to 2015, but that it would gain to about 35% market share by the end of the period. Android is TODAY above that forecast already! And for anyone to suggest, that the world’s worst-performing smartphone OS, the one so bad, that several of Microsoft’s previous partners refused to launch it, would suddenly have the biggest one-year growth of any OS in history, without telling us why, is abusive to the industry.

Pyramid Research is now on my gutter list. They are utterly incompetent and unprofessional. Pyramid have to issue an apology and statement that corrects the facts up to year 2010, and remove their incorrect forecast/projection to 2011 and beyond. Until they do that, do not buy any Pyramid Research projects, reports, analysis or consulting – and doubt ANY OTHER EXPERT who references Pyramid in the future.

I hate it when someone in mobile industry statistics is giving bogus numbers, it makes us all look bad! Shame Pyramid – issue an apology and correct the 2010 numbers.