Who's Winning the Smartphone Wars?

The short answer – Microsoft and Nokia are slipping, RIM and Apple are gaining. It’s too early to tell with Google. This shouldn’t come as a surprise to anyone.

Last week, UK-based analyst firm Canalys, released its findings on smartphone market share based on Q2 2009 unit shipments (see “Smart phones defy slowdown“). Before sharing Canalys’ findings, there are two important points to understand:

  • How market share is defined is based on the numnber of units shipped during a particular period of time, not the number of active users of a specific smartphone platform, which is the installed base. These are commonly misunderstood terms. To determine the share that any particular smartphone platform has of worldwide active smartphone users would require aggregation of data from all of the mobile network operators. Good luck with that.
  • The results of these reports are not reflective of how well a company is actually doing in terms of profit (see “A Visualized Look At The Estimated Revenues Of The Top Cell Phone Manufacturers” as an example).

Canalys covers a number of topics in their latest smartphone research, but the one topic are I want to focus on is “Global smart phone market by OS”. Which companies are shipping the largest number of plastic phones into the world is less interesting to most of us than which mobile operating systems are winning. Dell vs. HP is not as compelling as Microsoft vs. Apple, in the personal computer market. LG, Fujitsu, and Samsung, three successful handset manufacturers, generally are not fully part of the smartphone conversation as they have historically licensed smartphone operating systems from companies such as Microsoft (this trend is changing to include more diverse licensing partners and increased in-house OS development).

Symbian (Nokia) accounts for half of the smartphones shipped in Q2 2009, followed by RIM, Apple, and Microsoft. Compared to the same quarter in 2008, Symbian and Microsoft are losing smartphone market share, and RIM and Apple are gaining significantly. Apple’s growth percentage over the prior year is artifically inflated due to contraints in availability of the original iPhone just prior to the release of the iPhone 3G in Q3 2008. Minus that event, it would have been closer to RIM’s annual growth percentage.

Even though Nokia has a 50% smartphone market share right now with Symbian, I think they are the most vulnerable of all the major players covered by Canalys. Symbian is a mobile operating system struggling to be modern with a developer ecosystem that seems to be far more fractured and unmotivated when compared to the excitement I see regularly from Android, iPhone, and BlackBerry developers. Microsoft’s Windows CE and its variants have been in the market since 1996, and on smartphones for nearly a decade, yet has not been able to effectively remain competitive recently. And while Android has shipped on just over a million smartphones during the quarter, that’s still impressive considering the small number of devices that it’s currently available on, especially due to the number of pre-announced devices that wil be coming over the next few quarters.

Surprisingly absent in this data are other Linux-based mobile operating systems, which must fall into the ambiguous “Others” category, along with mobile operating systems, such as Palm Pre. The fragmentation of the various Linux mobile operating system efforts, including handset manufacturer specific implementations, is doing more harm than good right now in terms of market share growth.

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  • Todd

    Love, LOVE, *LOVE* this part:

    Growth
    Apple +626.9%
    Microsoft -28.7%

    Important to note, of the OSes listed only Android can run on non-telephony devices ( industrial machinery, picture frames, netbooks, on and on ).

  • http://www.smallsociety.com Raven Zachary

    Hi Todd, that 626.9% growth number from Apple is so high as the prior year Q2 (2008) had very little availability of the original iPhone. Apple was clearing out inventory in advance of the launch of the iPhone 3G in Q3 2008. Also, the number of countries the iPhone was available in jumped considerably in Q3 2008.

  • Charles

    Raven, I know it is not your definition but are most of the Symbian phones really SMARTPHONES? Recently, I went out and ask another dozen or so users. They don’t think so. Rgds,Charles

  • http://www.smallsociety.com Raven Zachary

    Hi Charles – I was going to cover this topic (are Symbian phones really smartphones?), but it never made it into the blog post in the end. It’s a factor in my belief that Nokia is in trouble.

    My understanding is that most Symbian S60 users don’t actually install apps, but that’s not the primary definition of a smartphone. The same could be said for BlackBerry users, too. If we were to define a successful smartphone platform by the adoption of third-party apps, then iPhone would be the most dominant.

    We need to treat Symbian as a smartphone OS, even though it’s not as impressive as its competitors.

  • http://robknight.org.uk Rob Knight

    As far as I can tell (as someone who isn’t a mobile developer), Nokia’s strategy for Symbian development rests, in part at least, on the Qt Framework. It’s a cross-platform framework for C++ development which is pretty awesome for developing apps that run on Windows, OSX and Linux. It’s currently being ported to Symbian S60 (the port is, afaik, mostly complete) which means that it should be possible to use the same codebase for Symbian apps, Linux apps (which might run on Linux-based netbooks), OSX apps (to run on Macs and maybe the rumoured Apple Tablet?) and Windows apps (after all, still the #1 desktop environment).

    Since Qt is LGPL and genuinely cross-platform, it has a strong chance of getting traction with developers, provided that Nokia don’t screw it up…

  • Todd

    Todd – What does the iPhone Touch run on? ;)

    Important to note, of the OSes listed only Android can run on non-telephony devices ( industrial machinery, picture frames, netbooks, on and on ).