It Doesn’t Add Up… (Enron Math?)

With the release of the Android phone right around the corner, the “analysts” sales estimates are starting to show up, but I am having an slight issue with some of the math involved. Is it an issue of figures don’t lie, big liars figure, or just an example of Enron Math applied to the smart phone arena.

This article on MacNN/Electronista states the analysts project that about 400,000 android smartphones will sell in Q4 2008, or “4% of the entire smartphone market”, and my brain starts telling me that number cant be right…

So I start to look around, because a friend of mine and I had a discussion on the iPhone’s market share being #2 to the blackberry, and I also recall reading that the iPhone 3G’s initial weekend sales were in the neighborhood of 1 million units, or by the original articles math, 10% of the market. I also remember that RIM’s sales figures are in the 10’s of millions of units annually, or  by the articles math 100% of the market.

A couple of google search’s give the following information…

An April 8th 2008 WirelessWeek article stated that RIM was forecasting total CY 2008 smartphone sales of 14 million.

A March 5th 2008 Fortune article stated the apple’s goal was to sell 10 million iPhones in CY 2008, and was forecast to exceed that number by 2.9 million.

So lets do the math here, if 400k = 4% of the total market, then the total market is 10 million units. 

14M + 10M + 400K = 24.4M 

So with 100% of the market being 10M, looks to me that a lot of people are buying more then one smart phone per year, factor in Palm and Windows Mobile, I’m guessing the average Joe is out there buying 3 and 4 a year.

Now I may be being stupid here, and be comparing US sales versus global sales, but I have to believe that the US smartphone market is also larger then 10 Million units. I also believe that the Android platform will not have an easy path into the market place going against Blackberry, Apple, Windows Mobile, etc, and it looks like its T-Mobile release will be a head to head against Verizon and the Blackberry Storm.

The other question I have is how Android is being touted as an “Open” system, vice Blackberry and iPhone, and if that is that case, why is it only available at T-Mobile.

For those of you that missed the beginning of the decade…
ENRON MATH

You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. The public buys your bull.