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iPhone soars, Microsoft 'main loser'

By Victoria Ho, ZDNet Asia on August 20, 2009

Summary

Apple iPhone's market share grew significantly over past year while newcomer Android also made waves and Windows Mobile suffered, says Canalys.

Topics

android, apple inc., apple iphone, canalys, high tech computer corp., microsoft windows mobile, motorola inc., oem, smart phone

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The numerous players in the smartphone market are quickly gaining ground in innovation and shipment numbers, but this has been mainly at Microsoft's expense, said Canalys.

Its latest research report highlighted the buzz surrounding the iPhone, Android and BlackBerry smartphone platforms, and focused particularly on Apple's iPhone gains in the market.

Canalys senior analyst Pete Cunningham, said: "Apple has revolutionized the smart phone sector, leapfrogging more experienced rivals."

He said, however, that there is opportunity for rivals to target Apple's weak spots, which he named as the high cost of the iPhone and the restricted selection of operators due to its exclusive tie-ups in many countries.

Canalys said, however: "The main loser has been Microsoft's highly standardized Windows Mobile platform. Its [global] smartphone market share has now fallen below 10 percent and the trend is likely to continue as many of its OEM (original equipment manufacturer) partners, including HTC, Motorola and Palm, are focusing investment on other platforms."

Globally, Windows Mobile has been eclipsed by Apple, which went from a 2.1 percent market share in the second quarter of 2008 to holding 13.7 percent of the market in the second quarter of this year.

BlackBerry-maker, Research In Motion (RIM), held a 20.9 percent share in the second quarter of this year, with Nokia still on top at 44.3 percent.

While Nokia still dominates the market by a large portion, its share has been falling. Last year during the same period, its share was 45.5 percent, according to Canalys.

In the Asia-Pacific region, however, the iPhone fever appears not to have set in yet. For the second quarter of 2009, Nokia's market share was 59.7 percent, with Sharp at 9.4 percent and Fujitsu at 9.2 percent.

The iPhone debuted in the region over a year later than it did in the North American market.

Canalys' report also pointed to the success of relative newcomer Android. The first Android-based phone was shipped in September last year, and has taken 3 percent of the smartphone OS market. Its overall share is expected to increase "substantially" as more vendors join HTC in making Android-based phones, said the analyst.

"The free license model, tight integration with Google applications and the potential for a high degree of vendor and operator customization are all benefits attracting industry participants," it said.

Among the OEM members of Android's Open Handset Alliance (OHA) are Motorola, Samsung and LG Electronics, with Kyocera being a recent entrant.

Outside of the smartphone market, Nokia, also has the lion's share of the basic phone segment. And with some emerging markets expected to continue to grow and adopt 2G devices, this is likely to directly benefit Nokia's business.

The Finnish phone manufacturer recently announced a tie-up with Microsoft, with the intention of taking on RIM in the enterprise space.

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