U.S. smartphone market a two-horse race

Android, iOS increase market share; BlackBerry slide continues

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When Microsoft and Nokia release their first joint WP7 smartphone, they'll essentially be trying to create a third competitor in what is now clearly a two-horse race.

The latest U.S. smartphone market share data from The NPD Group shows Google's Android OS and Apple's iOS gaining market share at the expense of No. 3 Research in Motion, with no other company above 5% of the market.

[ABI: Android to dominate smartphone market by 2016 and Analyst: WP7 threatens Android after "successful" launch]

In the second quarter, 52% of smartphones sold in the U.S. were Android-based, up from 33% in the second quarter of 2010. Apple's iOS also gained market share to 29% in the past quarter, up from 22% a year ago.

Meanwhile, RIM saw Q2 BlackBerry-maker sales plunge to 11% from 28% a year ago.

Which, it should be noted, leaves 8% for every other mobile OS, including one that was officially killed off Thursday (WebOS) and another that's basically starting from scratch (Windows Phone 7).

And WP7 will be starting from scratch in a post-iPhone 5 world, not to mention a world with more (and presumably better) Android products.

Several months ago IDC caused a stir when it predicted that WP7 would surpass iOS to become the No. 2 smartphone platform by 2015, behind only Google's Android.

But the only way that can happen is if WP7 steals market share directly from Android. Is that possible? Of course. All Microsoft and Nokia have to do is create a smartphone that's somehow more attractive than similarly priced Android-based devices. Sadly for them, that's easier said than done.

While you can always move some units with marketing, the debut of the Microsoft-Nokia WP7s -- unless it's a killer handset -- isn't likely to change U.S. smartphone market dynamics overnight. And 2015 isn't that far off.

What could change the market dynamics, however, is Google's acquisition of Droid-maker Motorola Mobility. For example, soon Google and its Motorola unit will be competing directly with makers of other Android phones such as Samsung, HTC and LG Electronics.

Further, Google is choosing to acquire a manufacturer with a shrinking percentage of the smartphone market. Motorola's market share slipped to 12% in Q2 from 15% a year ago, while its share of Android sales dropped to 22% in the second quarter from 44% last year.

Bottom line: If Google's purchase of Motorola Mobility causes its Android OS to stumble in any way, it could create an opportunity for Microsoft and Nokia in the U.S. market and elsewhere.

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