The coming Age of the Smartphone or is it just the iPhone?
Back in January of 2007 when it was known that the iPhone is coming, many (including myself, see The iPhone Effect) were trying to anticipate the effect it would have on the market. An article in the New York Times titled "BlackBerry’s Quest: Fend Off the iPhone" got me thinking about this issue again and made me re-evaluate my original analysis.
Here are some interesting facts and observations:
- The smartphone market (in units sold) was just 7.5% (125 million) of the overall mobile phone market (2 billion) in 2007, but is expected by analysts to rapidly grow.
- Worldwide, smartphone shipments jumped 60 percent in the last three months of 2007 over the same period the previous year, according to IDC, the tracking firm.
- In that same year the lion share in the smartphone market shifted from enterprises to consumers, suggesting that consumers want smarter phones and are making the shift to these phones while enterprises already have them. I think it is safe to assume that the growth of the smartphone market will come mainly from consumers.
- Consumers demand for smartphone increased the importance of features like multimedia, 3D graphics and a desktop like web browser.
- Blackberry US smartphone market share declined from 45% in 2006 to 40% in the 2007, this is despite the fact that their user base doubled in that year.
- The iPhone US market share in the first six months of its launch was 17.4%.
- Nokia is so far a very small player in the smartphone market in the US but had a 52% share of the worldwide market in 2007 (down from 56% in 2006 and expected to slip further).
- Google Android is for now a lab experiment, nothing more.
- Windows Mobile market share seems to be declining and no one considers Palm anymore as a serious player in that market. This leaves RIM and Apple as the current rivals to watch in the US with Nokia joining them when considering the worldwide market.
- Danger, the maker of the sidekick, was acquired in 2007 by Microsoft, suggesting that Microsoft is aware of the trouble lying ahead and is making desperate moves, that will probably have no impact on the outcome of the smartphone battle.
- The battle of the smarphone market is probably the most important battle the tech industry has ever seen. This is because phones are more popular than computers by an order of magnitude and with time it seems like the lion share of the mobile phone market will be held by smartphones.
- Apple is positioned to win this battle in the US and maybe even worldwide and the only one that can prevent that is Apple, meaning unless they make tons of mistakes or some force majeure intervenes (say Steve Jobs cancer makes a comeback) there is no company that stands a chance to beat them.
- RIM will most likely get acquired by Microsoft (once Microsoft is done with Yahoo! that is). However if Apple does make enough mistakes (or you know what happens) RIM will most likely be the winner and in that scenario they might just end up buying Microsoft and not the other way around... :) Now that is a thought worth savoring.
- Worldwide, Nokia and specifically Symbian, will most likely drop to less than 50% share in 2008 and may lose the leadership position within a few years to Apple.
In case you wonder what is Blackberry stand regarding consumers freedom, the following quote from the New York Times article will make it clear that, just like Apple, they are the bad guys:
R.I.M. makes its alliances clear. “We are sort of polite and amiable and we gently interrelate with the carriers and try to find compatibility,” Mr. Balsillie said. “It may be a better strategy to fight the carrier. We may be wrong. The carrier may get disintermediated, in which case we fade with them.”
UPDATED on April 28th with more accurate Nokia market share figures thanks to a user comment, suggesting that their US market figures are very different from the rest of the world.