Smartphones will continue to grow their share of the overall handset market next year, but not every smartphone operating system will share in the benefits equally. Some platforms will continue to thrive while others will struggle to take hold.
Google's (NASDAQ:GOOG) Android platform grew by leaps and bounds in 2010, and its trajectory is expected to continue upward. According to Gartner, Android represented 3.5 percent of the global smartphone market in the third quarter of 2009. In the third quarter of 2010, Gartner said Google captured 25.5 percent of the market. The growth is remarkable.
Meanwhile, Symbian, which is largely backed by just Nokia (NYSE:NOK), saw its market share slip from 44.6 percent to 36.6 percent in the same time period, according to Gartner. That trajectory is something Nokia is trying to combat with updates to Symbian next year. However, we believe eventually those two lines will intersect and Symbian will lose its top spot to Android.
Why could this happen next year? For one thing, if the pace of Symbian's decline and Android's rise continues in 2011 as it did in 2010, the switch could happen as early as the third quarter of 2011.
As for MeeGo, the open-source platform Nokia developed with Intel, we expect the platform will suffer from a sluggish market response. The first MeeGo devices are not expected until sometime in the first half of the year. By that time, a whole new crop of Android phones will have flooded the market, and anticipation will be building for the new iPhone. Nokia has talked about creating a new smartphone user interface paradigm, but has been sketchy on the details. It's unclear how many MeeGo devices will be released or how global the launch will be, but Nokia needs to make a big splash to take back momentum in the high-end portion of the market.
Hewlett-Packard's webOS, meanwhile, also is in need of a jolt. HP has promised to release a webOS tablet, and HP executives from Jon Rubinstein on down have hinted at an exciting lineup of products. However, if the Palm Pre 2 is an indication of where things are going, 2011 does not look like it will be any kinder of a year for webOS than 2010.
Finally, Microsoft's (NASDAQ:MSFT) Windows Phone 7 enjoyed a splashy debut, but Microsoft executives have admitted it will likely take years for the company to regain its status as a leading player in smartphones.
We believe Windows Phone, webOS and MeeGo all likely will suffer from the same symptom that afflicted webOS in 2010: a failure to attract a significant amount of developers, leading to a dearth of applications, leading to lackluster support by carriers keen to push Android and Apple's (NASDAQ:AAPL) iOS. A vicious cycle.
There's no rule that says the smartphone market is a zero-sum game, but it will be difficult for the smaller and immature platforms to escape the margins in 2011.