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Windows Phone 7 is predicted to be the second largest smart phone OS, by market share, within four years.  (Source: Neowin)

Meanwhile, the Android army is also on the rise. Gartner predicts it will have almost a 50 percent market share by next year (2012).  (Source: DeviantArt)

Microsoft's struggling partner Nokia was recently surpassed by the second largest Android smart phone maker, HTC, in market cap.  (Source: Corbis / Joel W. Rogers)
Android estimated to hit near 50 percent; meanwhile, HTC passes Nokia in market cap

Gartner, Inc., one of the world's most respectable market research firms, has announced [press release] that its research supports our hypothesis that Microsoft Corp.'s (MSFT) Windows Phone 7 smartphone OS will become the market's second largest player when the phase-out of Nokia Oyj.'s (NOK) Symbian OS is complete.  

In a research report released this week, it estimates that this year the platform will only rise modestly from 4.2 percent market share in 2010 to 5.6 percent in 2011 (still behind Symbian, in fifth place).  But by 2012 it will jump to a 10.8 percent, switching places with Symbian.  And three years later in 2015, it will have surpassed iOS and Research in Motion, reaching 19.5 percent market share, taking the #2 spot in world market share.

The report is most pessimistic about Canadian smartphone maker Research in Motion, Ltd.'s (RIM) prospects.  It predicts that RIM will fall from a 2010 peak market share of 16.0 percent to 11.1 percent by 2015.  It also predicts that Apple, Inc.'s (AAPL) iOS will rise this year, but fall by 2015.

Aside from Microsoft, the other big winner if Gartner's predictions hold true will be Google.  Gartner predicts that Google will rise from a narrow lead of 22.7 in 2010 world sales, to a dominant 49.2 percent market share by 2012.  

Variety of handset options, bleeding edge hardware, and a relatively strong brand image continue to drive Android sales upward even as some of its other competitors flounder.

On Wednesday in the Asian markets, Taiwan's HTC Corp. (2498) passed Finnish phonemaker Nokia in total market cap.  Market cap isn't the best measure of true performance or company reach (Apple recently passed Microsoft), but it does off a bit of a thermometer to the market's perception of a company.

HTC's cap hit $33.8B USD after shares rose 5.3 percent in the day's trading.  Nokia managed a modest 1.1 percent raise, with its cap closing at $33.6B USD.

Nokia ships far more phones than HTC.  HTC, currently Asia's second largest phone maker (in market cap), shipped 24.7 million handsets in 2010, according to Gartner.  By contrast, Nokia shipped 461 million units last year.

However, HTC's phones are largely high-profit smartphones, whereas Nokia's sales are still heavily driven by low-margin older phone designs.  In that regard the companies are much closer in profit than the sales numbers might indicate.  HTC's operating margin, a measure of profitability was 16 percent during 2010's final calendar quarter, while Nokia's was 7 percent.

Traders' valuation of HTC may also be based on the fact that the company has a great deal of upward momentum.  Nokia, meanwhile, has a degree of downward momentum as it tries to make the painful transition from Symbian to Microsoft's Windows Phone 7.

HTC's rise in the smartphone market has been nothing short of meteoric.  The largely unknown device maker has risen to become one of the premier Android smart phone makers, trailing only South Korean giant Samsung Electronics (005930).  Its success largely owes to its decision to fully throw its support behind the "winning horse" in the smartphone race -- Android.

The company does face some threats, though, such as Chinese Android phone-maker ZTE (000063).



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Seems about right
By InvertMe on 4/7/2011 11:28:25 AM , Rating: 5
This is how I see the market playing out too. It will be interesting to see what the actual numbers will be.

I have a vested interest in this as I have been steering my firm away from iPhones and to WP7 phones. I would hate to be pointing them to a dead end.




RE: Seems about right
By Wolfpup on 4/7/2011 12:04:19 PM , Rating: 1
I'm surprised by this but in a way kind of relieved. Microsoft as the big bad was evil...but I don't know, they still allowed some real choice, and they never pushed things as far as Apple has, I don't think. Apple gets a little power and just goes NUTS with the user control, random things like trying to charge third parties 30% to operate their own store, etc.

Android + Microsoft doesn't sound too bad. I'd love if WebOS does well too though!


RE: Seems about right
By Conner on 4/7/2011 3:22:41 PM , Rating: 2
quote:
Apple gets a little power and just goes NUTS with the user control, random things like trying to charge third parties 30% to operate their own store, etc.

Imagine a world where Walmart allowed any one with 99$ to set up shop in their store!!!

Stores have rights to carry and not carry products.

If that 30% commission was so bad then developers would go develop for Andriod.

I just happy that the AppStore allows such easy access to indie software, more so than any other store in history.


RE: Seems about right
By Mr772 on 4/8/2011 7:21:18 AM , Rating: 1
You mean like the largest online retailer ever? Amazon does this and charges much less than 30% to sell in their store. There is no $99 fee to setup in their store either.

Nobody ever said stores couldn't pick what they wanted to sell.


RE: Seems about right
By Conner on 4/8/2011 7:42:41 AM , Rating: 2
quote:
Nobody ever said stores couldn't pick what they wanted to sell.

quote:
By Wolfpup on 4/7/2011 12:04:19 PM "......they never pushed things as far as Apple has, I don't think. Apple gets a little power and just goes NUTS with the user control...."


Good for Amazon. Go release your software there and see how much you sell.


RE: Seems about right
By Paj on 4/8/2011 7:22:17 AM , Rating: 2
quote:
I just happy that the AppStore allows such easy access to indie software, more so than any other store in history.


Apart from say, Steam, or the Xbox store?


RE: Seems about right
By Conner on 4/8/2011 7:55:48 AM , Rating: 2
When I said indie, I didn't mean just games. And indies have been more successful on the iOS platform more than any other (world of goo example).
http://2dboy.com/2011/02/08/ipad-launch/


RE: Seems about right
By Reclaimer77 on 4/8/2011 9:30:08 AM , Rating: 2
What's with the hostile fanboism? Take a pill kid.


RE: Seems about right
By Conner on 4/8/2011 3:08:13 PM , Rating: 2
How did you pickup hostile?


RE: Seems about right
By BZDTemp on 4/7/11, Rating: -1
"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay














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