Microsoft's Windows Phone overtakes BlackBerry, but Android dominates smartphones utterly

Microsoft's Windows Phone overtakes BlackBerry, but Android dominates smartphones utterly

Summary: Smartphones now outsell features phones, while Android has stretched its lead over Apple's iOS even further.

SHARE:

Microsoft's Windows Phone has overtaken Blackberry in the smartphone OS stakes for the first time. However, the smart device market still remains a two-horse race between Google's Android and Apple's iOS, with Google continuing to outpace its rival by a significant margin.

Windows Phone has taken the number three spot in the smartphone market with a 3.3 percent market share for the second quarter of 2013, compared to the 2.7 percent held by BlackBerry, which recently said it was considering options for the future of the business, including selling it off. In the second quarter of 2012, BlackBerry's market share stood at 5.2 percent while Windows Phone's was 2.6 percent.

Five alternative futures for BlackBerry

Five alternative futures for BlackBerry

Five alternative futures for BlackBerry

But despite this minor excitement, the smartphone market is really dominated Android, with Apple's iOS a considerably smaller second place.

Android continued to increase its lead with 79 per cent of the market in the second quarter (up from 64.2 percent in the second quarter of 2012), according to data from analyst Gartner, while iOS held a 14 percent share. However, with a new iPhone expected shortly, Apple could start to eat into Android's lead again.

Around 435 million mobile phones were sold to end users in the second quarter of 2013, an increase of 3.6 per cent from the same period last year, according to Gartner. Worldwide smartphone sales hit 225 million, up 46.5 per cent from the second quarter of 2012 while sales of feature phones totalled 210 million units — a 21 percent decline year-on-year.

Anshul Gupta, principal research analyst at Gartner, said smartphones accounted for 51.8 per cent of mobile phone sales in the second quarter of 2013, overtaking feature phone sales for the first time. Smartphone sales grew fastest in Asia-Pacific, Latin America and Eastern Europe with growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively.

According to Gartner, Samsung maintained its number one position in smartphones with 31.7 percent of the market, up from 29.7 percent in the second quarter of 2012. Apple's smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 per cent from a year ago.

However, there could be challenges ahead as the smartphone market especially in the US and Western Europe is showing signs of reaching saturation point which is leading manufacturers to look at new form factors such as smartwatches.

Worldwide smartphone sales to end users by operating system in 2Q13 (thousands of units)

O/S 2Q '13 units 2Q'13 market share % 2Q '12 units 2Q '12 share %
Android 177,898.2 79.0 98,664.0 64.2
iOS 31,899.7 14.2 28,935.0 18.8
Microsoft 7,407.6 3.3 4,039.1 2.6
BlackBerry 6,180.0 2.7 7,991.2 5.2
Bada 838.2 0.4 4,208.8 2.7
Symbian 630.8 0.3 9,071.5 5.9
Others 471.7 0.2 863.3 0.6
Total 225,326.2 100.0 153,772.9 100.0

(Source: Gartner August 2013)

Gartner's research also included some analysis of the positions of the smartphone vendors:

Samsung: The South Korean company retained its number one position in the overall mobile phone market, and Gartner's Gupta said in a statement: "We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below average selling price mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end."

Nokia: Gartner said slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia's mobile phone sales in the second quarter of 2013. Nokia's mobile phone sales totalled 61 million units, down from 83 million units a year ago, although its Lumia sales grew 112.7 per cent in the second quarter of 2013. Gupta said recently announced devices such as the Lumia 1020 should boost Lumia sales in the second half of 2013 but warned: "Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points."

Apple: Gartner said Apple faced a "significant drop" in the average selling price of its smartphones: despite the iPhone 5 being the most popular model, its average selling price has decline due to strong sales of the iPhone 4, which is sold at a strongly discounted price. Gupta said this showed the need for a new flagship model and the risk if Apple introduced a new lower-priced model. "Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalisation will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it."

Lenovo: Gartner said the challenge for Lenovo is to expand outside of China: it continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. Its mobile phone sales grew 60.6 per cent to reach 11 million units in the second quarter of 2013, while smartphone sales grew 144 percent year-on-year and helped it rise to the number four spot in the worldwide smartphone market for the first time.

More smartphone stories

Topics: Smartphones, Android, Apple, Hardware, Mobility, BlackBerry, Samsung

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

41 comments
Log in or register to join the discussion
  • And then there were three...

    It looks like Microsoft/Nokia has finally secured the third place slot, and everyone below that is fading away. Android looks pretty secure in the #1 spot (at least for a while), so the new battle will between Microsoft and Apple for the #2 slot. At the moment, iOS is falling faster than Windows Phone is growing, but if the trends continue, Windows Phone will eventually pass iOS. The big questions for Microsoft and Nokia is "when will Windows Phone reach critical mass and really take off?" A lot of us think that number is 10%... but since it's still below 5%, 10% still seems a year or two away. And what if Windows Phone never reaches critical mass? Then what happens?

    As for the cheaper iPhone, surely Apple doesn't expect this $400 phone to challenge the army of cheap Android phones. The cheap iPhone is designed to keep Windows Phone at bay. I mean, even the design & colors are very Nokia-ish. Apple cannot catch Android. Apple is afraid of Windows Phone. It seems pretty obvious to me.

    Finally, there's BlackBerry. It never really stood a chance against Google, Apple, and Microsoft. They've all got ecosystems. They've all got loads of cash. BlackBerry just couldn't compete. My guess is that someone (maybe Microsoft) will snatch them up for the patents & maybe even release a BlackBerry-branded phone targeted at the enterprise. Either way, BlackBerry as we know it is just about finished. Most of us knew this last year. BlackBerry knows it now.
    cybersaurusrex
    • Ecosystem

      Actually, Apple needs to start worrying about ecosystem, too. As much as everyone talks about the "iOS ecoysystem" there actually really *isn't* much of one. Sure, there are tons of Apps in the App store and lots of speaker docks for iPods, but how many of them aren't just as readily available on Android or have easily substituted, often superior, competitors?

      Google has worked hard to take over people's personal email, which gives them an incentive to keep using Google. And Google's Maps are very hard to replace, at least outside of the US, as is YouTube. MS's ecosystem is undoubtedly the strongest, with Azure, (the service soon to be formally known as) SkyDrive, Exchange and especially Office really inimitable.

      But I can't think of *anything* that Apple is best-of-breed at that would keep people on iOS. The appeal of iOS was 3rd party support. Now that Android's 3rd party support has surpassed iOS', I think they're in real trouble. If WP manages to close the market share gap within the next year -- which seems likely -- then they mind find them selves in a deep ecosystem hole.
      x I'm tc
      • *might find

        not mind find.
        x I'm tc
      • Just not true

        The iOS ecosystem is still the strongest.

        Apps still come out first for iOS, and there are still many apps that are not on Android yet, or not available with the same features.

        3rd party support for Android has not reached the levels of iOS.

        Now, all the may certainly change in the future, but for now, the iOS ecosystem is the strongest.

        As long as developers are making more money on iOS than other platforms, that will probably not change.

        People who get low end, cheap or free phones, are not likely to spend money on apps and accessories, as those who buy higher end devices.
        yoshipod
        • And neither is your statement completely true

          "Apps still come out first for iOS, and there are still many apps that are not on Android yet, or not available with the same features."

          Yeah, right. Show me an equivalent of AirDroid. Show me ANYTHING using NFC. Show me ANYTHING using IR. While not all Android phones have such hardware, NO iPhone/iPad/iPod have NFC or IR.

          "People who get low end, cheap or free phones, are not likely to spend money on apps and accessories, as those who buy higher end devices."

          So those who get the iPhone 4 or 4S (free with a 2 year service contract from Verizon in our area) won't spend money on apps and accessories? Sorry, this argument doesn't hold water any longer.

          Open your eyes. Google has placed an ecosystem around Android that is every bit as strong as Apple has placed around it's iDevices. Add to that the fact that the hardware manufacturers can include hardware features on Android devices that you have to purchase extra adapters to use with your iDevice.
          benched42
          • Was true, not so much anymore

            Apps coming first to iOS is so last-year. Sure, there are companies that began on iOS and will support it first, for awhile. But many are going to Android first these days, and some companies are going Android-only right now (not leaving iOS, just not moving their Android apps to iOS). The Google Play Store passed 1,000,000 apps this summer. No guarantee of quality, but neither were the big numbers Apple always threw around. Fact is, if you need a mobile app, you can find it on Android or iOS.

            They key thing with a mobile device isn't the basic apps, so much as the app you need right now. Locational apps, like an electronic trade-show guide, the "Firefly Festival" app I downloaded last June for a weekend music festival, that kind of stuff is not coming to devices with a
            Hazydave
          • The sales figures say otherwise

            In the past 12 months iOS developers earned $5B while Google play developers earned $900M.

            So despite a much larger market share and user base for Android, iOS apps make more money for developers on average.

            http://www.forbes.com/sites/tristanlouis/2013/08/10/how-much-do-average-apps-make/

            Until that changes, the iOS ecosystem will be stronger. Developers go where the money is.
            yoshipod
        • This is true...for now.

          "As long as developers are making more money on iOS than other platforms, that will probably not change."

          Apple has really made the monetization part easy for developers. Google, not so much. Once Google's app store is a seamless and easy to us as Apple's, things will change.

          However, I also think that people trust the iTunes app store a lot more than the Google Play store, and with good reason.

          Using a Gmail address and an anonymous pre-paid Visa card, anyone can upload an app to the Google Play store and it will be available for download within an hour or two, with virtually (none that I know of) oversight from Google. They only pull an app if it's reported to be malware. So, if a malicious coder was good enough, they could release a useful app who's malware component could do significant damage before being detected. Apple's rigorous pre-release evaluation process (which can be painful for developers) mitigates this risk greatly.

          I think this trusting relationship makes iPhone owners much more likely to download apps, and lots of them, than Android owners who (if they're smart) are probably more careful about what they download.
          HappyXWindowsUser
      • The is a great point

        The ecosystem is going to heavily rely on services and that is an area where Microsoft and Google excel and an area that Apple has struggled. I can only imagine the difficulties any new platform will face trying to break into the mobile space now.

        Cramming more pixels, megapixels and GHz into a phone is going to be less and less of a driver for attracting and retaining users.
        Emacho
      • There isn't an ecosystem?

        I could barely hold myself down to a derisive snort. iTunes still has the largest marketplace for media (by a long shot, except for Amazon.) And yes, there's the apps.

        Games is possibly the weakest link, but even then, iOS isn't hurting in that department either (though it has no crossover like XBox.)
        Mac_PC_FenceSitter
    • Situation easy.

      This is almost funny because its actually descriptive of a set of circumstances that have existed in the past, and still do exist until this day in the PC market. Now its plainly in sight for all to see at work in the smartphone market, yet, despite the fact one would have to be both blind and ignorant of the reasons the market is divided up the way it is, nobody has seemed to find it important enough to say the words.

      So Im going to say them. Lets get this out in the open and talking about it properly so people can keep it in mind when discussing issues about the smartphone market.

      The reason why Android has come to own such a large majority of the market in the smartphone wars is largely the same kind of reason that Windows came to own such a large majority of the PC market. Its plainly and simply the fact that Android is and has been an OS that's broadly available one the most different permutations of hardware and only comes at a premium price when its on premium hardware.

      Apple on the other hand, is now suffering, albeit slowly, the same problem they have suffered by in the past in the PC market place and that's largely the fact you have limited hardware choice, in fact when it comes to getting a brand new iPhone its one hardware choice, and it comes at a somewhat premium price. Its all fine for the iPhone loyalists, and it is a great phone, but its still makes it horrendously difficult to compete with an OS that's available on the variety of choices of hardware that Android can be found on.

      WP8, also a great phone, suffers from two things of course, firstly, entering way too late into an almost saturated market and secondly being limited to only a few hardware choices right now as opposed to the massive number of devices Android can be found on. I have some very good respect for all the smartphone OS's out there, but for example, when looking at new Windows phones I asked myself where is the real premium hardware Windows phone? Where is the Windows phone model that's on the killer hardware? While I can understand the reluctance for a hardware company to put together an expensive WP8 hardware package at his point, because WP8 units are off to a slow start and making an expensive model may make that model difficult to sell in significant numbers to sell at a realistic price, without at least one or two powerhouse models, it keeps WP8 in a state where its hard for anyone to pick up any particular WP8 model and say "This Windows phone is an absolute killer unit".

      It prevents people at the various sales kiosks from being able to say that a particular Windows phone is the hottest hardware available. It dosnt even leave a customer wanting in that respect where they might then look at the great OS and say, I think this is a cool phone, its fantastic hardware, but have you got anything just like this only a little cheaper hardware?

      It in fact leaves the sales people at the sales counters saying, "look at this Android phone, it has the killer hardware". People who want an iPhone of course want an iPhone. For WP8 it leaves it on a rather difficult and rutted road for product promotion when there are only a few limited hardware choices, none of them being at the very high end, and similar kinds of hardware in various forms that is certainly already available for Android phones.

      I know. I was smartphone shopping for an upgrade for my old iPhone recently and it was as clear as the day is long at location after location. It was far too easy for sales people to rave about the top of the line Android hardware, and the sales people already seemed to always have an ingrained knowledge that there is always those who simply want an iPhone, or may be even swayed into an iPhone for no other major reason that it is a cool looking piece of hardware and Apple makes it.

      If Microsoft wants Windows phones to get moving off the shelves they have got to find a way to get it onto more hardware choices, many more hardware choices and they really do need at lease someone to produce a killer hardware flagship model. Otherwise, salespeople just cant get a good grip on how they can suggest and promote its sales.
      cayblex1
    • victory?

      This isn't a victory for MS, it's a loss for BB, with MS eating their leftovers (not even their lunch). MS "Grew" less than 1 percent, 0.7% compared to the BlackBerry's fall, which was 2.5% lower. So what happened to the additional 1.8 of the market share? They went to MS's competition.

      I don't consider that a success, win, or anything. It is "a thing" MS didn't win anything, they just showed up and their opponent didn't. Windows phones are still failing, they are still the lowest selling in the stores, and they are still the phones that do not hold their value due to this.

      If someone wants a Windows phone, I tell them to wait 2 months, the price will drop $100 bucks, then you can get a cheap phone that's a windows phone, if that's your thing.
      zithero@...
  • Only reason it's a two horse race is profits

    Android has a massive lead worldwide. Apple only has a mention here for selling high end devices with massive mark up. The reality is there is only one and that's Android. Accessory makers know they're more likely to get discretionary income from an Apple user than an Android user, although that line is even disappearing.
    ikissfutebol
    • Question

      Is the iPhone that much more expensive than the high end Android phones? I don't know myself but I had assumed they were close in price.
      rfoto
    • Apple always does this

      Apple's basically doing the same thing they did in the PC Industry. They were early movers on the personal computer in the 70s, they were early movers on the GUI personal computer in the 80s (a year before Amiga, Atari, or Windows), they were at least early mainstream movers on multimedia (after Amiga did it, but Apple survived), and kind of kept that going as their main reputation. All the while, they were selling the same basic hardware for quite a bit more money.

      That means profits. Last year, Apple was making about 5x as much profit per computer as HP. They had a 30% operating profit, while HP was like 5.6% (and that's including HP's smaller but much more profitable Enterprise stuff). As they transition from early mover in a segment to luxury item in a segment, they lose volume, but they rake in the profits. At least one year, Apple reportedly pulled in 40% of the Desktop PC Industry profits on about 5% of the sales, and sold 90% of the desktop/laptop systems over $1000. Not too shabby.

      They actually go for that model. After all, they are a single company with a proprietary OS. It's hard to imagine they'd have any way of keeping a 50%+ share of any critical market. And they'd definitely have to cut costs and profits. But take PCs... if they really did reduce MacOS PCs to match the economics of the rest of the industry, they'd sell more, no doubt. But they'd have to be at about 25-30% of all PCs sold, just to break even on those lower margin computers. So I'm claiming Apple's right about where they ought to be, given their usual game plan.

      Of course, they're not exactly following that plan anymore, given the weird dynamic of sales through subsidies at carriers. People see a "$300" iPhone 5 next to a "$300" Samsung S4, a "$99" iPhone 4S next to a Samsung S3 or a mid-range Droid or whatever, and a "free" iPhone 4 next to the other entry-level smartphones. They're starting to see Apple compete everywhere... and that might not be good. Few if any luxury brand companies have succeeded by lowering their prices. At first, that's perhaps a good thing.... "wow, a Mercedes at the price of a Ford! Where do I sign up!"... but eventually, users may well stop regarding Apple as a luxury brand. Once that happens, they lose the ability to charge twice as much for the same basic thing.

      And if you look at tablets, Apple's the only one who's been successful selling $500-$800 ARM tablets. It's really just like the PC business -- they sell a $1000 laptop, the average laptop sold is $500. Android tablets didn't really fly off the shelves until you get a decent one at $350 or an entry-level at $200 or less... there are still a few more pricey ones, but they're more of a niche thing... like my 64GB Transformer Infinity with keyboard. Not what most people are buying. Apple's already pulled a 180 on their stand on smaller, cheaper tablets... when Apple's playing the reactionary role (usually Microsoft's place), you know there's some crow being eaten somewhere.
      Hazydave
  • Linux Versus Linux

    I'm curious to see what happens with the new entrants: FirefoxOS is already shipping, then there's Ubuntu Touch, Tizen and Sailfish. And they're Linux-based. Will they grab significant share away from Android? Because nobody else matters any more.

    One thing is sure: proprietary OSes have no future beyond fighting over an ever-diminishing pile of leftover scraps. The future belongs to Open Source.
    ldo17
    • There is a reason your not in charge.

      You clearly don't know what your talking about.
      cayblex1
    • They may do ok

      First of all, these are not directly targeting Windows Phone, iOS, or Android. They're going head to head with BadaOS and Nokia's Asha, as a better
      Hazydave
  • I would like to thank the Author ...

    for not making this article into a Gallery and calling it "10 reasons why Microsoft Windows Phone has overtaken Blackberry and 10 more why Android is dominating the Cell Phone market" ! Refreshing that the information was presented in a straighforward manner that let's me consume it easily. Keep up the good work.
    jkohut