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The Uphill Climb For Microsoft And Nokia: Apple, Android Reaffirm U.S. Lead

As the smartphone market in the U.S. matures, some obvious leaders have started to emerge: Apple (NSDQ: AAPL) is the largest-single smartphone maker in terms of sales, and Android is the biggest overall platform. But equally, the challenges for those who are not on top of their game are also becoming very apparent. The graphic below, released today by Nielsen, gives as stark a picture as you can have for the uphill climb ahead for Microsoft (NSDQ: MSFT) and Nokia (NYSE: NOK) to crack the U.S. smartphone market:

As you can see, Android dominates the graphic on the left, accounting for 44.2 percent of all smartphone subscribers in the U.S., as measured by Nielsen between August and October 2011. In comparison, Apple’s iOS is on 28.6 percent of all smartphones.

But when it comes to individual devices, the iPhone is the clear winner. All 28.6 percent of those users are on iPhones, while Android’s dominance is split between a variety of brands.

Interestingly, HTC, which is struggling to shore up investor confidence at the moment because of its less-than-encouraging market guidance, is the biggest Android player at the moment, with 15.8 percent of the market. That actually puts it behind RIM (NSDQ: RIMM) — which, with a 17 percent share, is the second-largest smartphone maker after Apple.

All of that is well and good, but what about Windows Phone and Nokia? Well, look carefully: they are squeezed waaay over on the right side of Nielsen’s graphic, sandwiching HP’s road-to-nowhere webOS platform. Even Microsoft’s outdated Windows Mobile platform has a bigger market share.

Specifically, Nokia has a 1.6 percent share of the U.S. market on its Symbian platform, while Windows Phone 7 had a 1.3 percent share of the market in the August-October period based on devices from Samsung, HTC and others. Mind, this is before Nokia has launched its new Windows Phone devices in the U.S. — that won’t come until 2012. (And reports from Nokia and retailers in markets where the Lumia 800 has launched, like the UK, appear to be good.)

You could argue that there is still an opportunity Nokia and Microsoft to gain more market share. After all, Nielsen notes that smartphone penetration is still only at 44 percent, with only 56 percent of consumers purchasing smartphones between August and October this year.

On the other, it is worth remembering that growth appears to be stagnating in the U.S. — Strategy Analytics has even taken that one step further and said that in fact the market declined in the U.S. by seven percent in terms of shipments in the last quarter. That’s one further challenge that Nokia and Microsoft will have to face. But even then it’s not the only one:

If, as Nokia’s CEO Stephen Elop has often said, we are in the middle of a war of ecosystems, then Apple and Android appear to be winning there as well: Nielsen notes that when it comes to apps being downloaded, some 83 percent of activity in the last 30 days happened on iPhone or Android devices. That provides a big allure for developers with limited resources looking for guaranteed audiences for their content.