Is there really any value to 3-year smartphone forecasts?

Is there really any value to 3-year smartphone forecasts?

Summary: Smartphone forecasts out to 2014 appeared online from Gartner this week, but I have a tough time putting too much value when we have seen two recent operating systems go from 0 to 15% in just three years.

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We get quarterly reports from different analysts for past smartphone performance and then every once in a while we see reports predicting smartphone performance in the future. After looking more closely at and thinking further about the latest Gartner predictions that show Symbian falling 10% over the next four years, Android rising 12%, RIM falling 6%, iOS falling 0.5%, and Windows Phone falling 0.8% I have to say I think these type of forecast reports are interesting to talk about and discuss, but should not be taken too seriously. The smartphone market is not like the PC market. The smartphone market moves very fast and just because one platform is extremely popular at the moment and shows major growth does not mean it will continue for years.

Symbian is currently the worldwide leader by a large 23% margin and with the newer versions of Symbian coming from the Symbian Foundation I don't think predictions of such a steady reduction in market share over the years is accurate. Symbian has no measurable impact in the US, but that could easily change with proper marketing and wireless carrier support as we saw with Android and the Motorola Droid on Verizon. Symbian is tightly tied to Nokia and Nokia has their new MeeGo operating system, in partnership with Intel, so we could see this new OS showing up in future numbers.

Android launched in late 2008, but with just a couple of devices primarily only on T-Mobile it stayed down in the low single digit percentage area of the market. It wasn't until Motorola launched the Droid on Verizon that Android took off at breakneck speed to the level now where every carrier has decent Android devices with nothing looking to stop the momentum at this time. However, to rise another 12% in four years (going from 47.5 million to 260 million) in a crowded smartphone market will be quite a feat for Android with operating system fragmentation and an almost overwhelming number of choices for consumers. As Microsoft and Windows Mobile found out before, too many choices and fragmented versions of the operating system is not always the best route to success.

RIM has been able to count on the enterprise market for a fairly steady share of the market and the largest in the US, but the rather disappointing incremental upgrade seen in OS 6 doesn't look to bring in too many new smartphone consumers. I think the forecasts may be correct here with a slow decline in RIM market share in the future.

The Apple iPhone and iOS showed a meteoric rise when it went from a nonexistent entity to 15% in just three years. It has now flattened out and is primarily selling to previous iPhone buyers who upgrade and will most likely continue this way until they expand beyond AT&T in the US. Apple charges premium prices for their devices and is quite profitable with the iPhone business so that could sustain them and help them continue to gain market share. Other smartphone operating systems have caught up to and in some cases surpassed the user interface and functionality of iOS so Apple's yearly major release schedule may feel a bit slow in the smartphone world.

I don't think any valid predictions can be made at all for Microsoft's Windows Phone 7 platform since it has not yet even launched and past performance with Windows Mobile is not a good indication of future performance. As you know I spent a few weeks with Windows Phone 7 and it is quite a departure from what we are used to from Windows Mobile while offering a user experience that is unique when compared to the other major smartphone players. Microsoft has LOTS of money and if they can get marketing like they have with Xbox behind the platform we could see this OS take off just like Android has, especially given that WP7 should be launching across multiple carriers with multiple hardware manufacturers.

Palm hit a home run at CES a couple of years ago with the announcement of webOS, but has yet to show up in any market share or forecast measures with limited, and rather flawed, hardware and limited carrier support. The operating system is fantastic, but needs great hardware, enthusiast carrier support, and worldwide availability to gain in the smartphone market. HP now owns Palm so the resources should be there to support the platform and HP/Palm could capture something like 5 to 10% of the smartphone market if they get going soon.

In today's extremely fast moving smartphone market we have seen two operating systems (Apple's iOS and Android) each go from 0 to 15-18% in three years. Given these performances, predicting who will hold what amount of market share three years from now is simply a guess that should not be given too much weight. It will be a wild ride over the next three years and I have to say it is lots of fun to follow and be a part of the smartphone world.

Topics: Hardware, Android, Google, Mobility, Operating Systems, Smartphones

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23 comments
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  • RE: Is there really any value to 3-year smartphone forecasts?

    "Is there really any value to 3-year smartphone forecasts?"

    No.

    I don't think there's much value in any 3-year forecast in the tech industry, to be honest.
    CobraA1
  • RE: Is there really any value to 3-year smartphone forecasts?

    Your points are interesting but i think you miss a few details.

    1. Margin vs Number of devices
    Symbian leads the market because of the high number of low-end devices they support. Global market share is made in the low-end space which covers most of the planet. Of course the margins in that area are small.

    At this point iOS, WP7 and Meego don't support low-end devices at all.
    Android does to some extend as we see the first few devices pop up in India and Africa but they are still much more expensive than Symbian devices.

    2. Flexibility
    Flexibility was not a strong suit of software design when Symbian and BB OS were designed... and it still isn't in some areas. It's pretty tough to change those Systems to meet the current demands which they were never designed for. Microsoft understands that since its their area of expertise and started from scratch.
    iOS, Android, WP7 and WebOS are much more modern by Design but still Android seems to be the only one bothering to go head-to-head with Symbian.

    In my opinion RIM should have bought Palm but since they didn't it's gonna get hard for them.
    WP7 is still hard to measure but i guess it will all depend on manufacturer support.
    Fragmentation on Android is a non-issue for professional developers. Just as fragmentation between XP, Vista and WP7.
    sovok_
    • RE: Is there really any value to 3-year smartphone forecasts?

      @sovok_ fragmentation is a big issue for Android. As a developer I want my app to be a success on all andorid devices, and if my app is the best thing on earth but can only reach 1/2 the android devices that's a big deal to me.
      streaky88
  • Don't forget slates

    To be successful, a mobile OS should work on both phones and slates (like iPad, or Samsung's Galaxy Tab, or LG's Optimus Pad).

    iPhone statistics usually don't factor that it's also running on the iPod and iPad.

    Some phone operating systems don't work on slates. These ones cut off their potential market, and will fail.
    Vbitrate
  • RE: Is there really any value to 3-year smartphone forecasts?

    I really agree with what sovok_ said, especially the last part. Real developers with resources that are looking to make money are not turned away by fragmentation. There's no denying its still an issue, but it mirrors what Android users want and demand eg; flexibility and choice. From a technological standpoint, not only is Android rapidly gaining market share, but it is rapidly evolving faster than anything the tech industry has ever seen. To Apple's defense, they had a good head start due to their experience with hardware and software working together, but Google had very little mobile experience and is taking the world by storm. You can keep your three year predictions save for the bit about Android OS being pack leader for a long time. That's for certain.
    deftdrummer
  • WP7 is an interesting test for Microsoft...

    Unlike Windows, Office & Explorer, where Microsoft leveraged its monopoly status to pepetuate its products, WP7 will ultimately rise or fall on whether it's a compelling product or not. From what I've seen so far, WP7 seems more like the next Xbox than the next Zune... though, interestingly enough, both of those products are incorporated into WP7. I actually think Microsoft should be grateful that Google released Android a year ago. Android has proven that Apple is mortal... and bought Microsoft some time to resurrect itself.
    empirestatebuddy
    • RE: Is there really any value to 3-year smartphone forecasts?

      Nice point about Android laying the path for Microsoft.
      streaky88
    • Not really

      @empirestatebuddy

      Android just killed MS chances at being the non Apple product category. Apple will always try to be the high end, lower volume, high margin producer. Android being free, will capture the lions share of the middle and low end (when smart phones become commodities). Who is going to pay extra to have WP7? Not too many. I think MS missed the boat and will never catch up. They have no monopoly levers to force their way into the market. MS needs to ultimately make money on smart phone SW. I think that train left the station a long time ago.
      Economister
      • I disagree. Many continue to think in a world

        of black and white, wher something has to be either this, or that.

        They forget that many are purchasing this, or that, as they are the only two avalilbe. Add "something else" to the equation and things tend to change rapidly.

        Android is good for business, iPhone best for consumer. If Microsoft can create a good balance between the two, they will have consumers from both ends.

        As for Ofrfice being a sucsess because of "monoply", once again I am in disagreement: Office is sucsessful because it is far teh best office suite available.
        Tim Cook
      • You have limited understanding / short memory

        @Mister Spock

        Office worked better for many years at least in part because of undocumented DOS/Windows features which Office could take advantage of. Now they control the document format "standard" and is therefore very difficult to dislodge. MS is a convicted monopolist, in case you have forgotten.

        As for the rest of your arguments, they are nothing but wishful thinking. I noticed the qualifying "If". Any functional advantage that MS can create will likely appear in competing OSs in short order. And you have not addressed the most fundamental question: Why would the consumers pay for WP7 when you can have something just as good for free?

        When it comes to competing JUST on the merits, with no entrenched advantage, MS does not have a very good track record.
        Economister
    • RE: Is there really any value to 3-year smartphone forecasts?

      @Economister: Microsoft doesn't need to own/dominate the mobile market to stay relevant. If WP7 can wrestle enterprise/business clients away from RIM, that should be enough to keep it in the game.

      @Mister Spock: I'm not saying that MS Office isn't a great product now, but... in the beginning, the ubiquity of the Windows OS definitely helped Office overtake WordPerfect, etc.

      @Economister (part 2): Someone might pay extra for WP7 because it works seamlessly with other Microsoft products the people (& IT professionals) use every day--from Office to Outlook to XBox Live.
      empirestatebuddy
      • Outlook.

        @empirestatebuddy - I think that is the key to this. I think that a lot of people are really looking for something that works like their computer. People who use Outlook for work will really gravitate towards something that works that way. Familiarity will sell devices.
        I have an Android. One very motivating factor for me was the ability to integrate my gmail account completely with my phone. All of my contacts are in gmail now and I will be able to move from any Android device to any other now without the pain of re-entering my phone numbers and addresses. For years I looked for this function with Outlook but never found a phone that would quite fit the bill. If MS can do this and other things like this with integration to other desktop products then they WILL have a market presence.
        If they really want to dent the competition they will incorporate similar functionality for competitors software.
        kwabinalars
  • RE: Is there really any value to 3-year smartphone forecasts?

    we all know what happened to the mac in the 80s. These analyst wear rose colored glasses and have no vision.They are so rosy on apple outlook. I think apple will have 4% share
    snoonw
    • RE: Is there really any value to 3-year smartphone forecasts?

      @snoonw: many thanks for your satirical comment, highlighting the tribal nature of much of these discussions. However, it might be best to use <satire> </satire> tags for those not used to your humor.
      celtec
  • RE: Is there really any value to 3-year smartphone forecasts?

    I think there is also a serious error if one attempts to measure 'success' solely in terms of market share.

    Windows Phone 7 doesn't have to have a large market share to qualify as a 'success', and neither does any other smartphone OS.

    If I am a stock holder in a company, I care far less about its market share than I care about its profitability.

    If you have 1% market share, but make a profit, this is far better than having 90% market share while losing money.

    The funny thing is that before the iPhone came along, Apple people always used to say that 'who cares if Apple doesn't have a big market share, they make a good profit' but now that Apple has made a few products that have become mainstream we are told that market share is the most important thing.

    It isn't. BMW has a much smaller market share than General Motors, but I have no doubt which company is in a better financial situation, and it ain't GM.
    Doctor Demento
    • RE: Is there really any value to 3-year smartphone forecasts?

      @Doctor Demento

      I agree. There are generally two ways to stay relevant in a market, either (1) be entrenched (Windows, Office, Explorer, Google, RIM) or (2) be in-demand/popular (iPhone, iPad, Android). When a company or product is entrenched, it can hold onto market share (and profits) just by being "the standard" or "what everybody uses." Being popular can keep a company relevant too, even if its market share is comparatively small. I think Microsoft's main target (for the moment) with WP7 is RIM/Blackberry. Microsoft can (or hopes to) leverage all of its existing advantages in the enterprise to overpower and overtake RIM... which would lead to further entrenchment (in the enterprise sector). That's not to say that WP7 doesn't have consumer appeal. It does. But it just seems that most of the people interested in WP7 will be trading in their Blackberries (like myself). It will be interesting to see if MS can pull this whole thing off.
      empirestatebuddy
      • RE: Is there really any value to 3-year smartphone forecasts?

        @empirestatebuddy

        "Being popular can keep a company relevant too, even if its market share is comparatively small"

        Huh?!?
        DeusXMachina
  • RE: Is there really any value to 3-year smartphone forecasts?

    Anyone who could accurately forecast anything 3 years from now wouldn't need a job. They'd make a killing in the stock market and they'd be kicking back and having a lifestyle of the rich and famous.
    georgeou
  • "Gartner's predictions are genius" (if Gartner had said WP7 would rule)

    It never takes the Microsoft propaganda dept. long to step on any story that that doesn't say what MS wants us all to hear.
    zato_3@...
  • I don't agree it

    Given the fact that the iPhone has a faster processor and bigger screen, and front facing camera, and the general effort that apple puts into their hardware designs. I would expect the Android to be much cheaper than that.<br>I'm an a long-user iphone user. I think iphon is more better than BlackBerry ,Android .<br>If you don't agree with me, then, look at <a href=http://www.ifunia.com/iphone-column/index.html>the unique features of iphone</a> on "iFunia iphon column".
    summer77