The smartphone war seems to have been won definitively by Android, according to the latest data on Android’s share of smartphones brought to global market over the past year.
Behind that truth, however, the war continues, at least for second place. That’s because many millions of new customers buy new smartphones every year from several major OS makers, including Apple, Research in Motion (RIM) and Microsoft.
The Android OS, which runs on hundreds of models from a variety of manufacturers, will capture 39 per cent of the global market this year, dramatically up from a 23 per cent share recorded a year ago, according to IDC’s latest forecast.
Even so, battles are fierce for second place. In its June forecast, IDC said it expects RIM’s BlackBerry to slip in share this year to 14 per cent, while Apple’s iOS will grow to 18 per cent, just behind Symbian. Both Apple and RIM make their own OSes and manufacture their own devices, unlike Android, which was developed by Google for use by other smartphone makers.
Windows Phone (and the older Windows Mobile) will lurk behind the others with less than 4 per cent share in 2011. Still, Windows Phone — which Nokia and other manufacturers plan to use — is expected to reach a 20 per cent share in 2015, according to IDC. By then, Nokia will have replaced its Symbian OS with Windows. The Symbian OS dominated smartphones with 36 per cent of the market in 2010.
What the fight over market share overlooks is the impressive growth in the number of smartphones worldwide. To that point: IDC tracked shipments of 304.7 million smartphones in 2010, and expects that number to hit 472 million for all of 2011 — a growth rate of 55 per cent over 2010. IDC now expects the number of smartphones to grow at an annual rate of 26 per cent a year through 2015.
By then, IDC said 982 million smartphones will be shipped by manufacturers to retailers.
IDC’s forecasts are seen as highly reliable by vendors and other analysts, and often mirror outlooks published by Gartner Inc. Additionally, ComScore, a market research firm, surveys U.S. smartphone subscribers and has noted Google Android’s ascendancy in the U.S. in 2011, with nearly 42 per cent of the market, followed by Apple (27 per cent), RIM (21.7 per cent) and Microsoft Windows (5.7 per cent).
Of note: IDC has dropped WebOS from its forecasts, following Hewlett-Packard’s decision to stop selling devices running it and uncertainty about what will happen with it.
IDC and others attribute the enormous growth to trends that are already well-established: Smartphone makers are adding features such as faster processors and better screens even as prices continue to drop.
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“You don’t exactly see free phones offered by the U.S. carriers in return for a two-year contract, but prices are coming down overall,” said Ramon Llamas, an analyst at IDC. (The $300 that Verizon Wireless wants for the Motorola Droid Bionic dual-core smartphone on Verizon’s fast LTE network is the exception; many recent smartphones sell at subsidized prices of $150 to $200 in the U.S. with a two-year contract.)
In coming years, smartphones will be lighter-weight with even faster processors and longer-lasting batteries, Llamas predicts.
While many analysts bemoan RIM’s loss in market share in the past year, Llamas notes that it is still expected to see annual growth in shipments of 38 per cent in 2011, with a 25 per cent increase in 2012 and 10 per cent growth as late as 2015. The main reason: BlackBerry’s global strength as an early smartphone player and its ability to offer a physical Qwerty smartphone keyboard. Many business users prefer physical keyboards.
Top smartphone operating systems in the U.S. among subscribers 13+ years old.
“There’s market lust for Apple’s iPhone now, but there’s utility offered by a BlackBerry,” Llamas said. “Somebody else said it: BlackBerry lives and dies by its Qwerty keyboard.” RIM will also be able to push deeper into carriers and nations outside of the U.S. and Europe, he said.
In other words, even as it loses market share compared to rivals, RIM can continue to grow.
Still, Llamas believes there’s at least symbolic value in RIM’s market share decline, and it could affect the company’s bottom line. While BlackBerry shipments are expected to rise, bringing increased revenues to RIM, it isn’t clear how profitable RIM can remain.
Application developers will want to pick the biggest OS and possibly the second-biggest OS to work with, and that might mean passing over RIM to work with Android, iOS or even Windows Phone first.
RIM’s potential trouble in attracting application developers is matched against the iPhone’s enormous ability to do so. Apple currently boasts more than 425,000 iPhone apps, with that number rising every day, far ahead of any other OS.
“For better or worse, smartphones are app driven,” Llamas said. In surveys of how people use their phones, apps are big, as are texting, Web browsing and taking photos. Using them as devices to make phone calls falls near the bottom — perhaps the ultimate irony of the smartphone era.
“The last thing people do with these things is make a phone call,” he notes. “It’s the ‘what else’ in smartphones that’s driving the market forward.”
