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Can Android Be Stopped in the World of Smartphones?

IDG IDC today boosted its smartphone sales outlook for 2010 by 10 percent, citing “greater-than-expected demand for the do-it-all devices.” Based on the revised expectations, IDG IDC anticipates 269.6 million smartphones to ship in 2010, up from 173.5 million sold last year. Those are big numbers, but still a drop in the bucket compared to the over 4 billion handsets already in use. More intriguing is how IDG IDC sees the mobile operating system shaking out by 2014: Google (s goog) Android devices are expected to be the no. 2 mobile operating system, behind only Nokia’s (s nok) Symbian platform.

Android surpassing both iOS (s aapl) smartphones and BlackBerry (s rimm) devices actually isn’t such a surprise, since here in the U.S., Android devices are already outselling both platforms. We know the overall smartphone market will experience growth over the coming years, so all of the platforms could experience sales growth, even as they lose market share. In other words, all boats will rise with the tide, but Android will rise much faster. Here’s a snapshot of the IDG IDC data I put together in a graph:

It’s interesting that IDG IDC has high hopes for Microsoft’s Windows Phone 7 (s msft) product: Windows Mobile has lost market share for the past three years, but IDG IDC thinks Microsoft’s mobile effort won’t be a total failure similar to the Kin. We’ll hear more on this topic at our Mobilize event later this month: Microsoft GM, Developer and Platform Evangelism Matt Thompson is sharing thoughts in his talk titled “The Future of Mobile, Microsoft’s Windows Phone 7 (and Why iPhone and Android Developers Will Care).” Clearly, there’s little expectation from IDG IDC that webOS will do much for smartphones out of Hewlett-Packard (s hpq), which acquired the platform when it purchased Palm in April this year. And Nokia is once again expected to lose market share, says IDG IDC.

In past posts, I expressed some “doom and gloom” for Nokia (s nok) when faced with data such as this, but a few things have me holding back from repeating that mantra. To its credit, Nokia has been able to reverse its smartphone sales losses — but not profits — indicating that it can still fight back in the market that it once dominated. I’ve also had a recent and candid phone conversation with Niklas Savander, executive vice president and general manager of the Markets unit at Nokia. If nothing else, Savander has proven to me that Nokia fully understands the challenges it faces; he believes in the company’s strategy and told me, amid my fair criticisms of such strategies, Nokia “needed to be confident that MeeGo was the right position before making it the platform of choice.” We’ll see if that strategy pays with the first MeeGo devices, which could arrive by the end of this year. If it does, we’ll see how much of an impact the new platform has on the next several years of smartphone sales.

Until then, however, it’s an Android world because those manufacturers who embrace it — notably Motorola (s mot) and HTC — are reaping rewards by growing profits. For that reason, I previously suggested that Nokia embrace Android too. Savander disagreed — in fact, he began our conversation by asking me to justify my suggestion — but today there’s another group in the “Nokia should go Android” camp. AllThingsD shared smartphone sales estimates from the analysts at Piper Jaffray that are similar to the IDG numbers, along with this startling quote:

“We believe long term both RIM and Nokia will be share losers in the smartphone space because they do not have a core software competency. Over time, we do not see the benefit of RIM and Nokia continuing to push proprietary software that can’t compete with the market and eventually expect one or both to capitulate and move to utilizing third party software. … Ultimately, we believe Android is likely to control over half of the smartphone market in the next five years.”

For as brash as I was suggesting Nokia go Android, Piper Jaffray is doubly so for including BlackBerry too. But RIM’s future is constrained by its prior success; as shown by the new Torch handset, the company can’t completely alienate its loyal user-base by changing too much too soon.

Will Android own 25-, 50-percent or more of the smartphone market by 2014? Given the fast pace of change in hardware, software, services and connectivity, it’s too soon to tell for sure. Looking out four years from now is a bit of a stretch to account for all of those changes as companies adopt and re-prioritize strategies. Until someone shakes up the market though, the Android army has little reason to stop marching forward.

Related GigaOM Pro Research: It’s Time for Nokia to Embrace Android

26 Responses to “Can Android Be Stopped in the World of Smartphones?”

  1. Another thing you forget is you should not just count SMARTPHONES, eventually telephony will be IP based, as in VOIP. Even an iPod touch will be more like a phone in the near future through VOIP. Your numbers, assumption, and understanding of the future market is not too sound.

  2. you’ve got serious errors in your data, I am not sure where you got your Android 2010 market share numbers, but they are way, and i mean, way off….

    you probably used the “200,000” activations number, which is totally falsified, using updates, instead of new activations…

    there is about double the iOS share than Android for 2010 as it stands for sales, and WAY more in total market share with 120 million iOS devices sold to date, there is about 56% mobile web traffic is iOS web traffic, while only 25% Android, as it stands today.

    also Apple is selling approximately 10 million iOS devices a month, Android is selling less than half that per month as of this date….

  3. Search the news for MeeGo and you’ll see some third party hardware manufacturers (tablet, TV set box, IVI) already starting to adopt MeeGo, even before Nokia itself releases a MeeGo hardware. This tells you a lot. This doesn’t necessarily mean a success for Nokia, because MeeGo is open source and in the end somebody else might benefit from it more than Nokia itself, but for all developers care about, MeeGo as a platform is very promising. A developer who is new to both MeeGo and Android might find it wiser to invest his time learning MeeGo (or Qt to be precise).

  4. Lucian Armasu

    I don’t think Nokia will rise with the tide – at least not in smartphones. They’re losing more of that market everyday, and unless other big companies like RIM or whoever adopts Meego too, they will hit a dead end with it.

  5. Re Nokia. While at inception Nokia didn’t have a “core software competency”, they have acquired Trolltech a few years back who does have a “core software competency”. That is crucial given that MeeGo is mainly Qt based and Qt has been around for more than a decade now.

    What Nokia does lack is a unified message. Google sells “Android” to user and “Android” to developers. Nokia has to sell “MeeGo” to users and “Qt” to developers … and their store is call Ovi … Too many brands in there. There’s going to have to be some massaging there.

    Personally, I’m keeping a very close eye to Qt’s Web RunTime. A JavaScript-based run time that allows writing native Qt apps.

    • “Google sells Android to user” – How/where?? They had the direct sale Nexus1 that nobody but techies bought but Google didn’t advertise much if at all.

      The non techies I know with android based phones don’t know they’re Google or android. They know they have Google stuff on them but so does iPhone. They do know “Droid” (a Verizon brand name) because it was advertised heavily but not “android”. Beyond that it’s just HTC, Samsung phones (with Google apps) or a carrier phone. There is no real android “branding” that I’ve ever seen outside of tech blogs.

  6. So, what is Android anyway – It’s turning out to be an embedded system that Google has lost control over – Each manufacturer has a different interface, and now, Google doesn’t even get search revenue — – Samsung chose Bing

    Should all these phones even be grouped for market share when they are so different and the fragmentation is getting even worse?

    If more manufacturers/carriers choose Bing (for the bucks) will Google lose interest because all their effort is being spent to get mobile search (ad revenues) – if that goes away, Google is screwed.

    • Subtle, but important point: Bing is likely on the Fascinate because it’s a Verizon device. MSFT and VZ partnered a revenue deal with Bing late last year. That doesn’t change your main point, but I doubt Samsung made the choice here, which lessens it a little.

      Having said that, yes – if more carriers and handset makers choose Bing, it will have a negative impact on Google. Bear in mind that carriers/manufacturers share in the Google search revenues when using Android though, so I don’t anticipate too many will go with Bing — unless Microsoft offers a better deal than Google, that is.

      • Adam Malter

        With google collecting 30% rev share from the market, and still offering best of breed core installable apps (nav, podcasts, calendar, email) – I don’t think they are even slightly worried about the ‘Bing’ phone.

        Every phone sold add’s another reason for reluctant app developers (fattened up by the margins in the App store where simple fart apps sell for a couple of bucks) to buck up and start doing the hard work of supporting a heterogeneous consumer directed ecosystem.

        This is another one of those good for google, good for consumer situations. There are losers in the middle for sure, but by sitting out, they are just digging further.

  7. Dilip Andrade

    What amazes me in this diagram is the very small expected market share decline of RIM. I love their products, but There has been no evidence so far that they understand the evolution of the mobile device. Many companies will start looking to a variety of different devices that can interact with their systems, and the keyboard alone won’t save RIM in that dynamic.

    As for Darwin’s comment, we have heard about a Verizon iPhone for years and years. There’s no real indication that it’s coming. These are worldwide numbers that we’re talking about, so even the addition of another carrier for Apple in the US won’t dramatically change the picture. Countries with multi-carrier iphone availability are scattered around the world already. Android offers a lower buy in price for the handset which will be important in high potential growth markets like India and China.

    • “These are worldwide numbers that we’re talking about, so even the addition of another carrier for Apple in the US won’t dramatically change the picture. Countries with multi-carrier iphone availability are scattered around the world already. Android offers a lower buy in price for the handset which will be important in high potential growth markets like India and China.”

      Yup, Darwin missed that. For some reason his “analysis” is based on the illusion that the population of the U.S. outnumbers the rest of the world. An iPhone here on other carriers would definitely give Apple a boost in the U.S. market, but any benefit would be short-lived (at best) in the larger scheme of the global market.

  8. You seriously don’t mention that Android is on all the carriers when the iPhone is on one?

    Once the iPhone is on other carriers they will sell as many Android phones as AT&T which means very few instead of the iPhone. Which is already the case in europe where iPhone is on most of the carriers.

    But I would not expect honest or informed “analysis” from you anyway.

  9. I know the analyst meant that MeeGo is ‘propietary’ in the sense that it’s ‘their’ system and ‘they’re’ the ones moving it forward, but still, it’s super-open-source (even more open-source than Android).

    Anyways, I think its success or lack-of-traction will depend a lot how much Intel pushes it onto netbooks/low-end laptops as an option, whether it gets picked up on-third party tablets, and whether OEMs choose to install it instead of Chrome OS, which seems somewhat doubtful.

    But thus far, it looks beautiful, and it has a huge ‘app store’ already (all they have to do is skin xorg-linux apps for touch-usage) and I’d really like it to be a successful platform (I also say that selfishly as a Ubuntu user because I think it will be a lot more interconnected to desktop linux before Android makes it as an option to install within a desktop-linux distribution).

    And if not, it will, along with Chrome OS and Android, push a lot of driver support and development away from propietary platforms and towards open-source, or at least open-source compatible systems, which seems like a really big (possible) breakthrough.

    • using falsified number for their data is not going to help anyone…

      not once has HTC or Motorola come out with sales data, and Samsung released sales data that is not all that great…… the only thing people are relying on is the falsified “200,000” activations per day out of Google for “market share” numbers, where they count upgrades, and people simply wiping their system as an “activation”… in reality there are FAR more sales of NEW iOS systems to date, per month, and per every other measure….. which makes this 2014 number that much more of a wild a** guess that is far from what is really happening.