Who will win in the Smartphones business?
The smartphones has been the fastest growing category within the mobile phone space for the last couple of years. In 2009, a total of 172 million smartphones were sold which was a growth of 24% over 2008 (source: Gartner) whereas the mobile phone category was more or less flat in 2009 in the backdrop of severe recession. Analysts expect over 240 million Smartphones to be sold in 2010.
What is a Smartphone?
Unfortunately, there is no one universal definition of Smartphones. Some analysts have defined it as phones using open operating system which means that Symbian, Windows and Android based phones qualify as Smartphones but then what about Apple iPhone and RIM that run on proprietary operating system? Some define it as phone that gives PC like functionality and for some, it is the one with most advanced mobile phone features and hence the feature set of smartphones keep changing. A few industry analysts define it at mobile phones running on operating system with standardized interface and that provide easy access to developers for application development.
Whatever is the definition, it is commonly accepted that Smartphones have strong email clients, third party applications of some kind, QWERTY hardware or software keyboard support, high-speed internet, powerful calendar, contact and organizational features and support for powerful processors and touch screens. The operating systems that can support the above feature requirements are Symbian, Windows, Android, iPhone OS, RIM, Maemo (Meego going forward with Maemo’s merger with Moblin) and Palm OS.
Why does everybody want to win the Smartphone battle?
Smartphones are not even 10% of the total mobile phones but still all the handset players want to win this battle for the following reasons:
- High ASP - The average selling price of a smart phone is almost 3 times that of a non-smartphone which means it has a higher impact on not only the value share but also on the profitability. Apple and RIM though have just 3% market share in the mobile devices but have over 50% share in industry profits which reflects the high profitability of the smartphones.
- Thought leadership - Success in the smartphone business gives the device vendor the status of “Thought Leadership”. Any vendor having the “Though Leadership” benefits in the non-smartphone devices as well as the consumers want to buy the devices from the leading brands (in terms of “Thought Leadership”) even if they are not buying the devices that gave the vendor this status. This status is like the quality assurance certificate.
- Future of mobile phones – The smartphone market is expected to expand significantly in future to almost 40% of the total device market by 2013 which means that no vendor can afford to ignore this market.
- Operators prefer Smartphones – The increasing popularity of iPhones has led to increased data usage on the mobile. This has enabled the carriers to maintain their ARPUs despite fall in voice tariffs. The data usage on smartphones is almost 3 times higher than a normal phone. 55% of iPhone users use mobile social networking and 80% use it for surfing web daily. The high data usage has led to the situation of data scarcity from data abundance and carriers love this situation.
Who will win the battle?
Anybody who wins in the smartphone business has to win it on back of the operating system. 
Symbian has been the market leader in the Smartphone segment of the market with 47% market share in 2009. However, Symbian is facing a stiff challenge from iPhone OS, Android and RIM OS and has lost market share in the recent few quarters. The figure alongside gives Smartphone market shares in 2009. Android though has only 3.9% market share in 2009 but is making the most noise in the smartphone segment.
Each operating system has its own positives and negatives and before we attempt to answer the question that who is going to win the battle, it is important to evaluate the pros and cons of top operating systems:
Andriod:
This operating system has been developed by Google with the aim of not only to get a foothold in the lucrative mobile industry but also to change the way the mobile owners consume data on the net.
Pros – Open, free and supporting many devices. Great experience of Google’s web properties on the mobile like messaging
Cons- Fear of excessive fragmentation due to its open architecture and is also more susceptible to security threats
iPhone OS:
This operating system has been developed by Apple and is a closed, proprietary operating system and is only for Apple devices, iPhone and iPod Touch. iPhones have been so popular that they are now being blamed for the increasing data congestion on the networks.
Pros - Single unified platform and its biggest asset is the application store
Cons- Proprietary and hence its dependence on one vendor is a risk. Application submission process is a cumbersome and Apple keeps a tight control on the 3rd party applications.
Blackberry OS:
Blackberry OS is owned by Research in Motion (RIM) and is a proprietary operating system.
Pros - Strong in enterprise mobility segment and has created a perception amongst IT managers of being a much secured OS. Strong messaging service
Cons- Proprietary and hence its dependence on one vendor is a risk. Aged operating system and requires the special BES server. Lack of focus on consumer segment in the past limits the lure to potential developers. This operating system also suffers from lack of optimization on touchscreen devices and a bad web browser.
Symbian:
Symbian is owned by Nokia and used by many other vendors like Samsung, LG and Sony Ericsson. It is market leader but is seen as an archaic operating system. However, it is still holding out with promise to launch Symbian 3 and 4 by the end of the year.
Pros - Largest installed base and hence the economies of scale. Backing of Nokia, the market leader helps Symbian maintain its market leadership.
Cons- Aged OS and not really optimized for touchscreen devices. It is virtually absent in the North American markets and is facing huge competition from Android, iPhone OS and Blackberry OS. Dependence on Nokia is a risk as many of the other vendors are shifting to Android.
Windows Mobile:
This operating system has been developed by Microsoft and promises to mirror the PC experience on the smartphone. After continuous decline in market share in the past many quarters, Microsoft recently announced Windows Mobile Version 7 which has got rave reviews from analysts and handset vendors.
Pros - Backing of Microsoft which has virtual monopoly on personal computers. Microsoft’s ability to provide resources and its possible integration with its other hot properties like X-Box, Zune can ignite developer interest in this operating system.
Cons- Past failures to haunt version 7. Heavy operating system and hence requires higher hardware specifications. Last version had a bad user interface (UI) and web browser. I hope the new version has targeted the UI for improvement
There are many other operating systems like Maemo, LiMo, Samsung’s Bada that are trying to get a foothold in the lucrative smartphone business but only time will tell if they can manage to break into the top five operating systems.
I am not going to pass a verdict on which operating system will win but I will publish the results of the poll that I conducted on this site and no prizes for guessing the winner (refer to the image on the left). The winner was Android with over 40% of votes. In the backdrop of its popularity and the confidence that the ecosystem players are putting in Android, it is not at all surprising that it is going to be the fastest growing operating system for next five years. In the recently concluded Mobile World Congress, Android managed to get the highest number of handset announcements. Though even iPhone OS is a wonderful operating system but its proprietary nature would limit its expansion.
In your opinion, which operating system and vendor is likely to win in the smartphone space? Please do comment and cast your vote.
Loading ...
Related Posts:
16 Comments
Trackbacks
- Att For Business – Your Web Hosting System | Host Rage
- uberVU - social comments
- Detroit Red Wings Vs Colorado Avalanche Live Streaming | World Top News | Google Hot Trends | Yahoo Hottest Searches | www.WorldTopNews.Info
Symbian was one of the most popular. But as you said, its really outdated for touch screens and multi-touch. Windows have been having very bad dirty UI using only stylus. They have recently copied from other OS to make it big fonts and touch.
Advantage of apple OS is all the apps are just about $0.99 where as the same are around $20 in symbian.
The future is shifting towards android as its free and open. Allows the power of Google internet data connections. But if you see, each OS is backed by one company. Which is a big problem.
The Customer!
Competition among device manufactures will lead to more inovation, more applications and drive prices lower. For too long RIM had a stranglehold on the “Smartphone” marketplace and their reliance on using their own flakey network. Apple is making in roads on the corporate front and google will do the same. Mircorsoft has seemed to have woken up but will need to mend a lot of fences. I think there will be a interesting sub-market created for softeware that ports applications between the various platforms. The less costly it is to develop for multiple platforms the better it will be for the application developers and most importantly the consumer.
No winning device no winning OS, no winninig platform Everyone of the platforms will have his own target group of susbcribers on the market.
My own vision is that will be “indoor”, “outdoor”, “sport”, “luxary”, “low consuption”, and other devices with similar segmentation as it is in the car industry, today.
Most probably one subscriber will have many different devices in same time, case depending from the particular moment
Regards
Sasko
In the Canadian retail space the names consumers are still asking for much more than any others are iPhone and BlackBerry. We have not seen the demand for Android that was expected and people don’t come in and ‘ask’ for Symbian so there is no loyalty there and the consumers for Symbian seem to be less tech savvy and end up with it by sheer coincidence. Not that consumer demand makes one better than another and granted the Canadian market is known to be a much younger market (meaning not as developed not demographics.) Windows users have significantly dropped off other than niche app users that must have Windows X work on their device. I estimate Windows will lose market share as time goes on unless there is some earth shattering development.
Those are my observations from my little corner of the world, great article, thank you!
I feel as though all the Operating systems are at a point where the needs of the consumer are finally getting looked at. Android will implement this best, as its open, the users get their say in how things are done, and not to mention it is quite a bit more enjoyable than using the Iphone. The market for Android in Canada isn’t huge, but thats because Bell, the biggest carrier in canada, won’t bring anything android in, other than the samsung galaxy. On rogers/Telus the demand for android phones outweighs the demand for iphones.
I personally will be moving on to android when windows phone 7 is in the market. I’m completely against the windows phone 7 operating system, and its ability to alienate all of the windows mobile users in one fell swoop. No one wan’ts a microsoft Iphone.
My conclusion:
Google is slowly taking over the world.
Good.
Hi Mohit,
You have given a verdict on future market share ..but no timeline is given for it. Can you give a time frame in which the android will have 40% market share ??
With so many people voting for android, there must be something very special about it. That is also missing in this post. I would like to add why i feel Android will be the most popular.
Parallels with symbian – Symbian started with high end phone but soon nokia started launching symbian in all categories ( low, medium and high end). Same is going to be the case with Android. When we will have an Android phone for 8K, 12K, 15K and 25K, there will be something for everyone.
Atleast 50 design houses in china are working on Android devices. Just imagine what will happen in next 2 years. Hardware costs will be down and most of these design houses would have gained enough expertise on Android to launch “device a month” ( like they have on MTK today). “Spice”, “Lava”, “MicroMax”, “Karbounn” etc will be launching what their ODMs from china will give them. That will be all android.
Once chinese vendors will start launchig android devices in sub 10K range, Iphone, Windows Mobile or any other Phone priced over 20K will face really tough competition.
Challenge facing Android: Only Qualcomm is providing cheap chipsets for Android devices as of now. For hardware costs to come down, some real good competition is needed in chipset providers.
I THINK: It is not Open OS, Touch Screen, Google Factor or anything else which will make android successful. it will be cheap, reliable smart phones at 8K-12K which will make Android most successful.
Hi Amit,
I am not suggesting that Android will get 40% market share. I merely reproduced the survey results which shows that over 40% people feel that Android has the highest potential.
I agree with you that Chinese devices + Android is a lethal combination and can really put pressure on other device vendors. However, such a scenario would not be good for the industry given that most of the Chinese handsets flout all the standards, health tests and IPR/tax laws.
Regards,
Mohit
Good points. Besides cost, Google has made smart choices in how they are building the developmental framework:
Developers have told me that programming applications is open, straight forward, efficient and takes advantage of ongoing open development efforts such as in social networking, and GPS/mapping. While this can help lead to lower cost per device and application, it also helps build the ecosystem support.
Developers have to worry about a lot of things: will their app be a success? What can they sell it for or how can they earn advertising or other means of revenue? Are there any roadblocks, such as can be the case with Apple iPhone OS?
Because of the ways they derive their revenue, Google is viewed as a neutral party in the furthering of their open OS environment. Outside of incubator efforts such as their HTC Nexus One, they are not a prime competitor to handset suppliers.
Hi,
I will appreciate if any one would help me about the details of INQ mobile (Product/Features).Also its competitor,means comparative analysis between INQ & Others mobile.
Plz help me in this assingment.
regards
Sahil
# Note: Plz mail the details on vinu_sahil@rediffmail.com
Go do your own research buddy! This is the wrong forum to be asking for help with your homework
I feel as though all the Operating systems are at a point where the needs of the consumer are finally getting looked at. Android will implement this best, as its open, the users get their say in how things are done, and not to mention it is quite a bit more enjoyable than using the Iphone. The market for Android in Canada isn’t huge, but thats because Bell, the biggest carrier in canada, won’t bring anything android in, other than the samsung galaxy. On rogers/Telus the demand for android phones outweighs the demand for iphones.
I personally will be moving on to android when windows phone 7 is in the market. I’m completely against the windows phone 7 operating system, and its ability to alienate all of the windows mobile users in one fell swoop. No one wan’ts a microsoft Iphone.
My conclusion:
Google is slowly taking over the world.
Good.
Good points. Besides cost, Google has made smart choices in how they are building the developmental framework:
Developers have told me that programming applications is open, straight forward, efficient and takes advantage of ongoing open development efforts such as in social networking, and GPS/mapping. While this can help lead to lower cost per device and application, it also helps build the ecosystem support.
Developers have to worry about a lot of things: will their app be a success? What can they sell it for or how can they earn advertising or other means of revenue? Are there any roadblocks, such as can be the case with Apple iPhone OS?
Because of the ways they derive their revenue, Google is viewed as a neutral party in the furthering of their open OS environment. Outside of incubator efforts such as their HTC Nexus One, they are not a prime competitor to handset suppliers.
One word – ‘multi-tasking’ (ok, maybe tht was 2). And the winner is – Android