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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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RE: M$ Pays for another study
By kleinma on 4/7/2011 5:37:22 PM , Rating: 2
No I saw him making claims that Microsoft paid for the study to happen. If I were a giant company paying for a supposed unbiased study to be done I would at least have them project me to be the winner, not second place (in this totally fabricated hypothetical situation he has claimed occured). That was my point. I have a grip. Thanks.


By snakeInTheGrass on 4/7/2011 5:50:10 PM , Rating: 2
OK, that makes sense, claiming he said anything about Google or iPhone seemed a bit odd. I'm not sure I agree - I think if Microsoft had paid for a study they'd be thrilled for it to claim they'll be in second place. Claiming first place would sound even more wrong. :)

I have no idea how Gartner comes up with the studies or who it takes payments from for them; if Microsoft did pay for the study, I'd call it even more fishy. As is, it just sounds like the same type of useless stuff that analysts for investment banks do.


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