Android to outnumber OS X iPhones by 2012

In 2008, there were almost 162 million smartphones sold, surpassing notebook sales for the first time. Just over 49% of smartphones sold in 2008 were based on Symbian OS, a significant drop from a near 65% share it enjoyed a year earlier.

While this is in large part due to the relatively poor performance of Nokia's smartphone range, it is also an indication of the popularity of Linux, BlackBerry OS, Microsoft Windows Mobile, OS X iPhone and new entrant Android. This underlines the growing challenge that these platforms present in the mind of device vendors and operators.

Changing software platform strategies

Openness is key. While all in mobile recognise the revenue potential of applications and services, now more than ever, handset vendors must develop strategies to maximise these new revenue streams while reducing costs. Factors like these have led device vendors to alter their software platform strategies, like LG's recent declaration of its intention to launch 50 new mobile handsets using Microsoft Windows Mobile.

In the past year Motorola, Sony Ericsson and HTC too have modified their approach to the smartphone market. It has also become a growing focus for original design manufacturers and the operator-focused strategies of ZTE and Huawei.

Developers are key

As more and more value moves from device hardware to software and content, developers are becoming increasingly central to the handset value chain. Platform and applications development are in many cases already reaping the benefits of open source components and approaches, with LiMo Foundation, Android and the Symbian Foundation being the most significant device platforms in market.

The decision to move the Symbian platform to open source is crucial in maintaining its leadership over Android, Linux and Microsoft. The growing importance of content development is reflected in the efforts that Apple, Google, Nokia, Microsoft, Qualcomm and Adobe have made to facilitate development and a route to market via their application stores.

Impressive growth

We expect that the global recession will cause total new handset sales to fall by 10.1% in volume terms in 2009, but its effect will not be felt equally across all segments. Demand in the mid tier will fall away during 2009, but sales of new smartphones will grow over 30% to 211.2 million units. This will be driven by innovative devices and operator subsidies to promote data consumption. By 2013 almost four in every ten handsets sold worldwide will be a smartphone.

With impressive growth rates like this, the smartphone market has proved attractive to companies in adjacent market segments, such as leading notebook vendor, Acer. New entrants will just increase competition.

Gavin Byrne, research analyst, Informa Telecoms & Media.

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