According to the recent Canalys Smartphone Analysis, the smart phone market continues to increase as a proportion of the overall mobile phone market in the US.
Despite a drop in market growth to 6% in Q3 2009, down from 37% in Q2 2009, smart phones represented 26% of all mobile phones shipped in Q3 2009. This is up from 24% in Q2 2009 and will continue to rise in coming quarters.
The top two smart phone vendors increased their combined market share in Q3 to 76.3%. Research in Motion (RIM) held 48.1% while Apple held 28.2%.
“Despite what looks like a ‘closed shop’, with continued growth expected in the US smart phone market there is still plenty to play for, and new products are coming thick and fast from the competition,” the report says.
Four other smartphone platforms in the US market today – Android, Symbian S60, webOS and Windows Mobile – represented only 23.7% of the market in Q3.
Canalys claims the challenge for the handset vendors on the multivendor platforms is to “differentiate their products, especially as the market gets busier, while also providing competition to Apple and RIM and choice to the consumer.”
Canalys also thinks that with an increasing number of Android and Windows Mobile devices launching, there can be little, by looking at the specifications, to choose between one and another on the same platform. “A key product differentiator will be seen in the software and the user interface. In short it is all about the user experience, particularly how the user organises their favourite applications, content, messages, people and places,” analysts say.
Canalys says Verizon needs to fight back against the iPhone’s tremendous success and will be hoping the new Android devices (Motorola’s Droid and HTC’s Droid Eris) will “light up its somewhat uninspiring consumer device portfolio.” Demand for Android devices will be helped by the addition of Google Maps Navigation on Android 2.0.
Analysts reminds us of the fact that AT&T is the only one of the big four US mobile operators not yet to range an Android device.
RIM’s US device shipments were up 27.5% in Q3. Around 3.8 million net new subscriber accounts were added worldwide in its fiscal quarter and profits beat analyst expectations. According to Canalys estimates, RIM, with only the Storm, held a 2.2% share of US touch-screen smart phones in Q3 2009. As its entry-level and mid-range (mostly keyboard-based) devices increasingly come up against new touchscreen Android devices, buyers’ appetite for BlackBerry devices will be tested.
The iPhone remains the leading consumer smart phone in the US. The response to the iPhone 3G S was ‘tremendous’ and ‘very surprising’ according to Apple, so much so that many international markets had limited supply for several weeks.
Canalys says with each software release the iPhone gets more ‘CIO friendly’. According to Apple, the iPhone is being ‘deployed or piloted’ at more than 50% of Fortune 100 companies and is doing well in higher education institutions and government agencies, though increased device security will still be needed for broad deployment to be considered in government.
The report shows that US smart phone share of HTC, the leading worldwide manufacturer of Android smart phones, supplying T-Mobile and Vodafone (in EMEA) as well as selling under the HTC brand, has hovered around the 5-7% mark for five quarters.
“HTC devices are ranged by the big four US mobile operators. These relationships and the installed base of customers it has are crucial to HTC, and Microsoft. From being the first, HTC is now one of many Android device vendors,” says Canalys.
According to the research group, Motorola “rose from the ashes” of the smart phone market recently with the announcement of the new Android-based smart phones, the CLIQ with T-Mobile and the Droid with Verizon.
“If the CLIQ and the Droid do anything like as well as the RAZR did it will give Motorola a solid base for 2010. Working on Android means that building its own app store need not be a top priority for Motorola.,” according to Canalys.
They also think Nokia really needs a big hit in the US (“It has failed to get its most popular Nseries devices ranged by the leading US mobile operators and it has thus far failed to make a significant impression with its Ovi services in the US”), Palm needs the old volumes back (“Mobile operators must be convinced that they can profit from ranging Palm webOS devices. Palm needs their commitment”), and Samsung has lagged in smart phones, although it still leads the overall US mobile phone market and continues to roll out new handsets with all leading mobile operators at a “blistering pace.”
Canalys notices that there are more vendors planning to launch smart phones in the US in the next few months: Dell, Kyocera Wireless, LG (Android handsets) and Acer (Android and Windows phones).
“They will all be faced with the same challenges: getting their smart phones ranged by the mobile operators and capturing the imagination of consumers. The mobile operators can only range, subsidise and promote a certain number of devices. As Apple did, new entrants need to come up with something special, and that is no easy feat,” the report concludes.
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