Four Out of Five U.S. Smartphones Sold Run Android or iOS
December 14, 2011 4:02 PM
RIM is earning a reputation as the successor to Microsoft as the "biggest loser" in smartphone sales
most recent survey
by the NPD Group on U.S. smartphone sales offered few surprises as recent winners and losers for the most part furthered their respective streaks. The winners are, of course Apple, Inc. (
) and Google Inc. (
), while the losers are Canadian BlackBerry maker, Research In Motion, Ltd. (
). Windows Phone 7 manufacturer Microsoft Corp. (
), a perennial loser, was about the only party reverse its recent trend, posting a small growth.
I. Four Out of Every Five U.S. Smartphones are an Android or an Apple
For Apple and Google, they're seeing their individual growth more or less flat-line for this year, but this growth is still substantially elevated, when compared to 2010 numbers. Google's Android market share remained at 53 percent -- the
the NPD group reported for
, and a significantly higher level than Jan.-Oct. 2010's ~21 percent which NPD
reported last year
. Likewise Apple grew from 21 percent to 29 percent.
RIM continues its humiliating fall, reaching a mere 10 percent of the U.S. market, down from a year ago when it held a quarter of it. On a quarterly basis RIM captured a miserable 8 percent of U.S. smartphone sales in Q3 2011. NPD analyst Ross Rubin, the report's author, pointed out that in the close to five years between Q2 2006 to Q3 2011, RIM has gone from owning 50 percent of the smartphone market to owning a sixth of that.
RIM co-CEO Mike Lazaridis as saying, "sometimes we have to put the brakes on. We’ve shown that we can handle annual 100% growth. I’m not sure we could handle more than that."
RIM co-CEO Jim Balsillie may be all laughs and grins, but his company's increasingly abysmal U.S. sales outlook has given investors little to crack a smile about. [Image Source:
Well RIM has certainly put the brakes on -- in fact it's put the vehicle in reverse and is backing up towards a cliff leaving investors yelling in the back seat.
II. Microsoft Performance is Slightly Better Than Last Time
For Microsoft the news was considerably better. Unlike RIM, which has no "plan B", Microsoft is
sitting on a pile of cash
some of it from Android
) and isn't afraid of throwing it at the smartphone market. And Microsoft has apparently passed on the tradition of standards bearer of the biggest losers side of the list to RIM.
While it still has a long, long ways to go to regain even a fifth of its Q2 2007 peak 25 percent market share, Microsoft did manage to reach a 2 percent market share with its Windows Phone platform -- up from 1 percent in August.
Looking ahead, Mr. Rubin argues that Nokia's Oyj. (
strong recent partnership with Microsoft
will have little immediate effect on the U.S. market because, he says, they have to "build from almost nothing."
An even bigger comeback story is the performance by Google-subsidiary Motorola, who rose from 1 percent of the market in 2009, to 12.1 percent today.
Ultimately, it remains to be seen in the long run whether Microsoft and Nokia will have enough fuel left in the tank to achieve an equivalent level of comeback success as Motorola. But signs of Microsoft's general direction should become more evident by next year, Mr. Rubin says.
III. RIM Could Follow in Palm's Footsteps if it Doesn't Beware
A shift for RIM will be even more noticeable, as continued declines could push it to be sold or at least commit to serious global cutbacks. RIM has brought some of its trouble on itself. After
announcing that its next generation smartphone OS would be dubbed BBX
-- a trademark
clearly registered and actively used
by a separate software company in the U.S for years, RIM was sued and ordered to cease using the name.
Now RIM is
offering customers the moniker "BlackBerry 10"
. The underlying OS looks promising -- barring a
glaring security issue
uncharacteristically presented itself
in QNX, BB7's parent OS. That said, the naming issues might serve to distract and confuse some would-be buyers.
To its credit, RIM has always managed to drawn strong sales thanks its IT-strength software, allowing it to pinch on hardware costs and post some almost Apple-esque profits. But even that may be coming to the end. From Q1 to Q3, RIM saw its profits fall to a third of their previous levels down to $329M USD from $934M USD. A quarter or two more like that and RIM could find itself in the red.
Mr. Rubin opines, "The competitive landscape for smartphones, which has been reshaped by Apple and Google, has ultimately forced every major handset provider through a major transition. For many of them, 2012 will be a critical year in assessing how effective their responses have been."
While he did not mention it, one of the biggest smartphone stories of 2011, aside from the Nokia-Microsoft affair was Hewlett-Packard Company's (
) decision to
kill sales of webOS smartphones
, effectively striking a death blow to the remains of Palm, Inc. -- a firm that had close to 20 years of mobile device experience and almost 10 years of smartphone sales.
The smartphone event of 2011 may have been the death of HP's ex-Palm unit, a veteran core that had stuck it out for almost 20 years. [Image Source: Gigaom]
Once viewed as the chief competitor to Apple, Palms' sales plunged prompting a
2010 fire sale
to HP for $1.2B USD. From there things went from bad to worse, with HP's
driving the struggling unit to its grave.
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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