With Android and Apple monopolizing profits across a global smartphone landscape that continues to experience explosive growth, the focus this year is on the fight for what’s left.
Microsoft Corp., Research In Motion Ltd. and Nokia Corp. are among a handful of vendors jostling for “a distant third,” in a marketplace dominated by Samsung Galaxy handsets running Google Inc.’s Android software — and by Apple Inc.’s iPhone and iPad.
Gartner wireless analyst Anshul Gupta said network carriers and consumers’ groups are urging on the challengers in a hope that more viable competition can offer a counterweight to the growing market influence of the big two.
The worldwide mobile phone market including basic cellphones is forecast to grow 1.4 per cent year over year in 2012, the lowest annual growth rate in three years, according to a report from market research firm IDC.
Global smartphone volume in the fourth quarter of 2012 however is expected to reach 224.5 million units, representing 39.5 per cent year-over-year growth due primarily to strong consumer demand.
For the year, smartphone shipments are forecast to grow 45.1 per cent year over year to 717.5 million units.
Strong smartphone growth is a result of a variety of factors, including steep device subsidies from carriers, especially in mature economic markets where carriers resell the majority of smartphones, as well as an array of under-$250 (U.S.) smartphones in emerging markets.
Despite the growth, only a shortlist of devices after Apple handsets and flagship Android phones from Korea’s Samsung including lower costs handsets from Asian manufacturers including, ZTE Corp, and Huawei Ltd. are showing significant growth.
Not surprisingly, Apple and Samsung are also involved in the most high-profile mobile patent lawsuit in history.
Between them, Apple and Samsung are divvying up most of the industry’s profits, according to Asymco analyst Horace Dediu, with Apple accounting for 73 per cent of earnings in the second quarter.
In terms of market share, the Android system took 75 per cent in the third quarter of 2012, reflecting 94 per cent year-over-year growth, IDC said.
Apple declined to 14.9 from 13.8 per cent compared to the 2011 third quarter, while BlackBerry hung on to third with 4.3 per cent of the market, a drop of more than 50 per cent from the year earlier period.
Microsoft, which released its Windows 8 platform in late September and has entered the tablet manufacturing game with the Surface line, is driving hard for RIM’s spot.
Waterloo-based RIM is set to release its new BB10 platform in late January; a long-awaited product refresh that analysts say will prompt wholesale upgrades from among the more than 80 million BlackBerry users.
IDC said Windows and RIM will continue to fight for the show position; with RIM CEO Thorsten Heins insisting BB10 has “a clear shot at being No. 3.”
For all of the original equipment vendors including RIM, Microsoft and Nokia, whose Lumia 920 phone runs on Microsoft’s platform, the challenge is to lure aficionados from their iPhones and Galaxys.
RIM is also working to leverage its reputation for communications security to win back corporate and government customers who have defected to other devices under the emerging bring your own device trend.
All of the vendors clearly face an uphill battle in the U.S., but in developing markets including China, domestic incumbents are the biggest challenge.
After surpassing the U.S. in the third quarter to become the largest smartphone market by shipments, China is forecast to grow by 24 per cent in 2013 and local cellular handset makers led by Lenova Ltd. are poised to rise with the tide.
While Apple’s iPhone 5 hit stores in China on Dec 14 after receiving the final nod from the country’s regulators, its share of sales in the country has been halved to less than 10 per cent on delays in introducing news models.
The fight for mobile market share will be a key technology trend in 2013, along with continued migration to cloud storage, the campaign to monetize mobile in social media and stepped up migration to fourth-generation wireless networks.
Icreasing use of near-field communication technology on mobile devices for “mobile wallet” e-commerce will likely be another development worth watching. According to analysts at CCC Insights, form factor and feel of mobile devices will be of lesser significance to buyers in 2013, as the overall experience and available app library takes precedence.
“In 2013, we think some of the most innovative mobile phone experiences will come from newly launched platforms like BlackBerry OS 10 and newcomers like Firefox OS and Tizen,” CCC said.
“They’ll offer fresh ways of doing things with your phone that’ll move the whole industry forward. Their innovations will underline why experiences, not hardware, are the future of the smartphone business.”
Overall, IT spending by enterprises in 2013 will exceed $2.1 trillion, up 5.7 per cent from 2012, according to IDC.
The biggest driver will be mobility, with sales of smart devices to grow by 20 per cent, generate 20 per cent of all IT sales, and account for 57 per cent of all IT market growth.
Excluding smart mobile devices, the IT industry would expand by just 2.9 per cent.
It’s widely expected that the surge in mobility will lead to mobile devices surpassing PCs as the method of choice for online access, probably by 2015. The number of people accessing the Internet through PCs will shrink by 15 million over the next four years, while the number of mobile users will increase by 91 million, IDC said.
Another growth area is emerging markets, where IT spending is projected to expand by 8.8 per cent to more than $730 billion, or 34 per cent of all IT outlays. The rate of growth in emerging markets is twice that of developed countries.
Also on the horizon, according to IDC’s predictions:
Mini tablet surge: The tablet market will grow by at least 42 per cent to more than 170 million units in 2013. Mini tablets with screens smaller than 8 inches will account for as much as 60 per cent of unit shipments, up significantly from 33 per cent in 2012.
Mobile platform rationalization: If a mobile platform doesn’t get interest from at least half of app developers its demise is imminent. Vulnerable platforms include Microsoft, which has attracted about 33 per cent of developers, and RIM, which has about 9 per cent developer interest.
SaaS a hot buy: IDC is predicting $25 billion in SaaS acquisitions over the next 20 months, up from $17 billion in the past 20 months.
Platform as a service growth spurt: IDC is forecasting a tenfold increase in the number of industry-focused platform as a service (PaaS) offerings, which numbered fewer than 100 in 2012. More broadly focused cloud platforms, such as salesforce.com’s force.com, Microsoft Azure and Amazon web services, will become more commoditized.
Rise of business leaders making IT decisions: By 2016, 80 per cent of new IT investments will directly involve line-of-business executives. At least half the time, the line-of-business executive will be the lead decision maker.
BYOD security: Even enterprise security isn’t immune from the consumerization trend. Citing what it calls a “bring your own ID” trend, IDC predicts that “many more enterprises, and the security software and services vendors that serve them, will use the identity management systems of Facebook, Google, Yahoo, Microsoft, and other consumer social networks and cloud services as a new foundation for enterprise authentication.” |