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Almost two-thirds of the handsets sold in China this year are powered by the Android OS: China is its largest single market, to the extent that a third of all Android devices sold in 2012 were sold in China.

The data is from research by UK market analyst Informa Telecoms and Media. The report says the US is the second-largest market for Android, with an 11% of worldwide Android sales. Informa’s research anticipates that at least one in every two mobile phones sold in the US in 2013 will be powered by this platform.

“Despite the economic downturn, the global smartphone market is enjoying healthy growth,” says Malik Saadi, principal analyst at Informa. “Consumers are spending more to acquire more technologically-advanced devices. Around 786 million smartphone devices were sold in 2012 (including the devices powered by non-certified variants of Android that are proliferating in China), which is 45% more than the total number of smartphones sold in 2011.”

China is by far the fastest-growing smartphone market with a year-on-year growth of 85% in 2012 and this growth is being driven by the explosive demand for Android phones. Sales in China of devices powered by this OS exceeded 50% penetration in 1H12 and Informa estimates that two in every three handsets sold in the country over the whole of 2012 are powered by Android.

Of the other major platforms, Apple iPhone and Microsoft’s Windows Phone hold minority shares of China’s total handset sales, around 5% and 1%, respectively, in 2012. But thanks to Nokia’s partnership with China Mobile, Windows Phone is expected to improve its share in 2013 to 2%, while iPhone is expected to lose market share slightly if Apple does not manage to create a TD-LTE variant for the Chinese market.

“But not all Android phones sold in China necessarily comply with the full Google ecosystem,” says Saadi. “In fact, 41% of these devices support alternative application frameworks from the likes of Chinese web companies like Baidu, Alibaba, Xiaomi, Tencent, Wandoujia and Anzhi.”

Informa expects Android to consolidate its position further in the US to such an extent that one in every two handsets sold in the country in 2013 will be powered by this platform. “With the continued rise of top-end Android devices, iPhone sales in the US could face significant challenges if Apple does not manage to make radical changes to its ageing iOS, particularly to the user interface,” says Saadi.

“Apple could be forced to compromise the high margin associated with its iPhone in order to maintain volume share. Although Apple has upgraded the hardware of the iPhone5, only a little has been done on the software side. This situation could lead to even the most ardent Apple fans churning as they become disillusioned with using the same UI framework for more than six years. We believe US sales of the iPhone will decline to 34 million units in 2013, down from 35.5 million in 2012.”

Informa expects Microsoft to slightly improve its market share in the US in 2013 to 6.5% as both Nokia and HTC strengthen their Windows Phone marketing strategies and device portfolios, and tighten their partnerships with operators in the region. “We believe Android will continue to gain market share globally, By 2015, one in every two handsets sold worldwide will be powered by it.

“But its market share of this platform could potentially peak – or even decline – after 2016 owing to a more aggressive penetration of the alternative OSs, most notably Windows Phone.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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