iPhone fever sees Apple market share grow

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, according to IT research firm Canalys.

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

Canalys senior analyst Pete Cunningham, said: "Apple has revolutionised the smartphone sector, leapfrogging more experienced rivals."

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

The report stated: "The main loser has been Microsoft's highly standardised 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.

RIM, manufacturer of the BlackBerry smartphone, held a 20.9 percent share in the second quarter of this year, with Nokia on top at 44.3 percent. While Nokia still dominates the market, its share has been falling. Last year during the same period, its share was 45.5 percent, according to Canalys.

However, in the Asia-Pacific region, iPhone fever appears not to have set in. For the second quarter of this year, 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.

The 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 three percent of the smartphone market. Its overall share is expected to increase substantially as more vendors join HTC in making Android-based phones, said the analysis.

"The free licence model, tight integration with Google applications and the potential for a high degree of vendor and operator customisation are all benefits attracting industry participants," the report 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, 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.