The future smartphone market will be driven by operating systems and user demand for functionality and "experiences" the phone can provide, according to industry analyst In-Stat.
In a report released Tuesday, the research firm projected that there will be some 412 million smartphones worldwide by 2014, where over 250 million units will be equipped with accelerometers.
Advanced features on smartphones will continue to evolve with users demanding tools such as touchscreens, increased camera resolution and Wi-Fi connection. According to the report, making phones "smart" carries significant cost impacts, where more than 60 percent of the cost of building such devices goes toward displays including touchscreens, baseband and apps processors and software licensing.
In-Stat added that smartphones running Symbian OS will remain dominant and continue to grow over the next few years. However, the open source platform will see drop in net handset shipments in 2014, where Symbian's market share will shrink.
"In-Stat believes new OSs such as [Google's] Android and [Nokia's] Maemo, will cut away at Symbian market share," In-Stat's analyst Allen Nogee, said in the report. "Although there are relatively few open source-based OSes in the market today, the open source OS momentum is difficult to ignore. After years of hype, it is easy to see that 2010 will be the year of Android."
In an e-mail interview with ZDNet Asia, Nogee explained the trend toward open source mobile platforms: "In the United States, where Symbian doesn't play a factor, Android has momentum because it isn't tied to one company such as Research In Motion [BlackBerry] or the Apple OS, and it also doesn't require the royalties of Microsoft's Windows Mobile.
"It also has the backing of Google, which isn't a negative [brand] to most," he said, adding that developers are also building apps for the platform.
The world's largest phonemaker Nokia, acquired Symbian last year, then transferred the OS to the Symbian Foundation.
Noting that Nokia "does great with low-cost phones, but smartphones are another case", Nogee said the Finnish phone manufacturer is falling behind even as the smartphone market continues to grow.
He added that while Nokia is moving in the right direction with Maemo, "it is a bit too slow [and] too late".
During its third-quarter earnings report, Nokia earlier this month said its telecommunications equipment unit incurred an unexpected loss of US$832 million, though it shipped 3 million more handsets than analysts forecasted. Company executives then admitted Nokia is losing smartphone market share, which dipped to 35 percent from 41 percent in the previous quarter.