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Tuesday, 18 August 2009 11:15

Microsoft's smartphone market share: sub 10 percent and falling

By
According to the latest figures from Canalys, Microsoft is losing share in the smartphone market as the number of platforms proliferates and it now commands less than 10 percent.

Chris Jones, Canalys VP and principal analyst said: "Nokia, Apple, RIM and Palm have all achieved success by developing their own operating systems and delivering distinct devices and interfaces. Android customisation will further add to this diverse mix. As a result, new smartphones are front page news around the world...The main loser has been Microsoft's highly standardised Windows Mobile platform. Its smartphone market share has now fallen below 10 percent and the trend is likely to continue as many of its OEM partners, including HTC, Motorola and Palm, are focusing investment on other platforms."

According to Canalys: Nokia maintains global lead, although its performance varies by region; touchscreens have become the preferred interface, representing 40 percent of all shipments; Apple's success continues, as the iPhone takes 23 percent of the North American market; and RIM continues to gain share, succeeding with its push into the consumer market.

Canalys adds: "Smartphones continue to shine as one of the brightest spots of the technology industry, with shipments growing despite the global recession. Innovation in interfaces, design, applications and promotion continue to excite consumers, which, in contrast to the PC industry, is helping to keep average selling prices stable. The rise in data traffic seen by mobile network operators is finally generating a return on their investment in broadband capacity and will drive further infrastructure expenditure."

Pete Cunningham, Canalys senior analyst, said, "Apple has revolutionised the smartphone sector, leapfrogging more experienced rivals. The competition must move much faster to close the gap in terms of functionality and design and at the same time try to target Apple's weak spots. These are primarily related to its business model, which requires premium upfront pricing, high cost of ownership and, in many countries, a restricted operator line-up."

Canalys says competition is building in a number of different forms. "RIM has successfully expanded its product portfolio to include a wide selection of devices and interfaces that appeal to a range of customers at different price points...Palm has received widespread acclaim following the launch of the Pre in the US during Q2."

Jones added: "As a relatively small company, Palm has shown what creative leadership and focused investment can achieve. By going back to its roots and developing its own operating system, it has produced an innovative and differentiated product. Investors have responded to this, with its share price growing over 70 percent this year. Palm still has plenty of challenges ahead – it must find the resources to launch the Pre on the global stage, while continuing to fund development of its product pipeline. But it is remarkable how much better the prospects are for this company than just one year ago."

The Google-led Android OS, also scores a gong from Canalys. It notes that Android is already taking three percent of the smartphone market. "Success so far has been driven through HTC, but with many other vendors, including Samsung, joining the fray, volumes are expected to increase substantially. The free licence model, tight integration with Google applications and the potential for a high degree of vendor and operator customisation are all benefits attracting industry participants."

The poor performance of Microsoft in the smartphone world, and the growing success of RIM and Apple were also evident in Australia in Optus' recent IP Index survey of enterprise use of various communications technologies. iTWire reported that "Since 2008 Optus found a substantial increase in the number of organisations standardising on one mobile OS. As the platform of choice, Blackberry soared from 25 percent to 36 percent of respondents, while Windows Mobile lost ground, from 28 to 22 percent. Symbian gained marginally from nine to 10 percent, and the iPhone achieved four percent, an impressive result given its short time in the market."

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