Winners and Loser in the Smartphone Market: Q4 2008


The quarterly worldwide smartphone market share numbers are in from Gartner and, depending on who you’re rooting for, they aren’t pretty. Nokia’s trend of struggling continues, while Apple (s AAPL), Research in Motion (s RIMM), HTC, and Samsung continue to show gains.

Here in the U.S., Nokia isn’t poised to be a big player. Their handsets are rarely subsidized, so simply from a cost perspective, they don’t gain the same attention that mobiles from other brands attract. And there’s still something “foreign” (for lack of a better word) about the S60 platform to mainstream consumers here. That’s not the case around the world, as Nokia is a major player in the market. Bear in mind, however, that the numbers above do reflect worldwide market share as reported by Gartner. This has to be troubling for Nokia as only six quarters ago, Symbian-powered smartphones held an estimated 65.6 percent of the smartphone market. That number is just over 40 percent now:

4q08-smartphone-market-share-numbersFor some reason, Gartner lumped Palm (s PALM) in with the “others” this time around. It’s difficult then to make any judgments, but that’s sure to change after the Palm Pre launches. RIM and Apple (s AAPL) have effectively doubled their market share in the past year which doesn’t surprise me, but that Samsung line item surely does.

Samsung’s growth eclipses everyone else’s, which is in my “how’d they do that?” category. We haven’t seen an abundance of new Windows Mobile-powered Samsung units in 2008, or did I miss them? I can think of the BlackJack II, which hit late in 2007, and its successor, the Epix, plus the Omnia, but I come up dry after that. Perhaps other non-Windows Mobile Samsung devices are now part of the smartphone class?

Gartner also examines the overall market growth in terms of handsets sold. Here, even Nokia experienced growth, although it was meager. The company sold 0.8 percent more smartphones in 2008 than in the prior year. The big winners strictly from a handset sales perspective? Everyone else, it seems:

  • Apple = 3.3m sold in 2007 vs. 11.4m sold in 2008 (245% increase)
  • RIM = 11.7m sold in 2007 vs. 23.1m sold in 2008 (96% increase)
  • HTC = 3.7m sold in 2007 vs 5.8m sold in 2008 (58% increase)

It’s interesting to note how these trends apply to smartphone operating systems as well. Microsoft’s (s MSFT) Windows Mobile marginally held off the market share of Apple’s OS X in the last quarter of 2008: 12.4 percent to 10.7 percent. Just two quarters ago, Microsoft held a commanding lead of 12 percent  to Apple’s 2.8 percent. Given the slowness of Microsoft to release Windows Mobile updates as compared to Apple’s nimble nature, I’m anticipating Apple to exceed Microsoft in this area as soon as next quarter.

Lastly, I want point out something I alluded to two quarters ago. I said then that “Google’s Android won’t be widespread, so I don’t anticipate a major impact there.” I really can’t say where Google (s GOOG) fits in to Gartner’s numbers, simply because they’re not broken out. That in itself implies that the numbers aren’t relatively meaningful as compared to the others. Android still doesn’t have the breadth of applications available to make it interesting enough for consumers.

Yes, it’s early for a new platform with just a single device out, but Android has yet to make the splash that many folks expected by now. A new handset or two aren’t going to cut it: if Google can’t get more application developers on board soon, they’re going to find themselves in a deeper hole that’s harder to dig out from. Of course, Palm will face the same challenge when the Pre launches. We’re getting to the point where it’s less about hardware specifications and more about the user experience, applications and services that people want to carry around with them everywhere.