« Home | Fixing LinkedIn system for business referral » | Music labels must die. Hopefully, before they do a... » | Report: 95% of Internet video stuck looking longin... » | Opening television to the Internet » | 2007 is the year DRM died, at least for music » | Verizon's claim to open its network is a celver sc... » | More press coverage by PC Pro » | Free My Phone » | New TVersity release plus making it into the top 5... » | Radio iPods expected on Wednesday » 

Sunday, April 27, 2008 

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.
So what does it all mean? Well... here are my thoughts:
  • 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.
One more thing, Google Android is fundamentally different from the others since it emphasizes consumers freedom to use mobile devices like they use computers, over everything else. As such it is my favorite underdog, I dare say that in an ideal world it, or something like it, will win, but as we all know we do not live in such a world.

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.

What a lengthy but bizarre post. One would think if one went to the effort of posting a few hundred words one would also do some research.

Firstly, you talk about the US smartphone market as if its the world. That is patently false.

Secondly, in the same vein, you say Nokia has no smartphone presence, when they actually own 60+% of the smartphone market. This tells me again you dont know much.

Lastly, with US owning around 7% of the world market of phones, its pretty arrogant to assume what happens there will determine the future of phones. The relative failure of the iPhone in Europe should tell you that much already.

How about rewriting your article with a bit more research, and maybe getting a map of the world. You may notice the world does not revolve around USA.

spot on, surur - I was about to post highlighting how big a flop the first iphone was in Europe, but thankfully you've already pointed out the obvious on my behalf :)

Mediaholic:

Nokia are enormous, while Apple's iphone is still just a boutique item in Europe - an overpriced, under-performing, but very pretty novelty phone.

and R.I.M buying Micro$oft?? HA!

apart from that though, I agree with the sentiment of the post - smartphones are a growing market, and eventually they'll be the norm. also an OS like android (if not actually android) would be great news for everyone. but (as you recognise) that requires a build of android, not just the SDK.

but since you're supposedly editing your post in light of surur's comment, perhaps you ought to get rid of this bit, since there is little-to-no-chance of Nokia collapsing so badly... Also why no mention of Sony-Ericsson??

ony ericsson? you gotta be kidding me!

Actually I think this post is pretty good... agreed there's a little hollywood sensationalism to stir the pot both the points are spot on. The fact that iPhone has been slow in Europe is a fair point but weigh this against the fact that Nokia has been trying to crack the US market for "YEARS" with tons of investment and very little to show for it. That said I don't think we should understimate the intestinale fortitude of Nokia who has made some smart moves buying the likes of Navtech and coming out guns a blazin' It will be interesting to see if things like iPhone, Android and Blackberry Storm can hold a candle to raw investmet from Nokia. Clear Razr has shown that a hit flame can quickly cool without substance behind it. I think Apple is a smart breed as shown by there savvy strategy in the US to aggressivey move down stream to grab marketshare via Walmart and other distribution channels. How many years has Nokia been trying to penetrate the US and why haven't they tapped the nations largest retailer? Makes you wonder if Apple has the same domminate advantage points that Nokia has shown in Europe???

sony ericsson? you gotta be kidding me!

Actually I think this post is pretty good... agreed there's a little hollywood sensationalism to stir the pot both the points are spot on. The fact that iPhone has been slow in Europe is a fair point but weigh this against the fact that Nokia has been trying to crack the US market for "YEARS" with tons of investment and very little to show for it. That said I don't think we should understimate the intestinale fortitude of Nokia who has made some smart moves buying the likes of Navtech and coming out guns a blazin' It will be interesting to see if things like iPhone, Android and Blackberry Storm can hold a candle to raw investmet from Nokia. Clear Razr has shown that a hit flame can quickly cool without substance behind it. I think Apple is a smart breed as shown by there savvy strategy in the US to aggressivey move down stream to grab marketshare via Walmart and other distribution channels. How many years has Nokia been trying to penetrate the US and why haven't they tapped the nations largest retailer? Makes you wonder if Apple has the same domminate advantage points that Nokia has shown in Europe???

sony ericsson? you gotta be kidding me!

Actually I think this post is pretty good... agreed there's a little hollywood sensationalism to stir the pot both the points are spot on. The fact that iPhone has been slow in Europe is a fair point but weigh this against the fact that Nokia has been trying to crack the US market for "YEARS" with tons of investment and very little to show for it. That said I don't think we should understimate the intestinale fortitude of Nokia who has made some smart moves buying the likes of Navtech and coming out guns a blazin' It will be interesting to see if things like iPhone, Android and Blackberry Storm can hold a candle to raw investmet from Nokia. Clear Razr has shown that a hit flame can quickly cool without substance behind it. I think Apple is a smart breed as shown by there savvy strategy in the US to aggressivey move down stream to grab marketshare via Walmart and other distribution channels. How many years has Nokia been trying to penetrate the US and why haven't they tapped the nations largest retailer? Makes you wonder if Apple has the same domminate advantage points that Nokia has shown in Europe???

I believe smart phone will get a larger share of the market once the price for mobile web comes down or is part the standard voice plan.

I want a phone:

that has excellent audio quality in handset-, speakerphone-, or headset mode.

that has excellent reception (and transmission)


text is a bonus but give the data size the cost is beyond inane.

I have a tv. It is very big. 1080p is great that way. I do not want to watch video on my phone.

I do not want my microwave to be able to drive my lawn mower either.

May I please have a QUALITY phone for VOICE communication?

Post a Comment