Smart Phone Market Share: Android Posts Huge Gains, Windows Mobile Not Hopeless

According to market researchers at comScore, the US smart phone market is undergoing some interesting changes, with Google's Android system showing strong gains and Apple's popular iPhone starting to cool. But the most interesting aspect of this peek at Q4 2009 smart phones sales is that some commonly held assumptions are simply incorrect. For example, Microsoft's widely panned Windows Mobile system, while slowly losing share, actually sold almost as many units as the iPhone did. That's not too shabby for a system that is widely in need of a do-over.

Broadly speaking, little changed in the quarter in terms of positioning. Research in Motion's (RIM's) BlackBerry is still the number-one smart phone platform in the United States, followed by Apple (iPhone), Microsoft (Windows Mobile), Palm (WebOS), and Google (Android). But some interesting trends emerge when you look more closely at the data.

For example, sales of RIM-, Apple-, and Microsoft-based smart phones were basically flat, with RIM down 1 percent, Apple up 1.2 percent, and Microsoft down 1 percent. Google Android sales were up sharply, however: Android phones accounted for 5.2 percent of the market in the period, compared with just 2.5 percent in the previous quarter. Meanwhile, Palm—which is struggling to gain acceptance for its relatively new WebOS platform—actually fell, from 8.3 percent a quarter ago to 6.1 percent.

And although RIM leads the market by a wide margin with 41.6 percent of all smart phone sales in the United States, the number-two and number-three players, Apple and Microsoft, are a lot closer (to each other) than one would imagine. Apple controlled 25.3 percent of the smart phone market, compared with 18 percent for Microsoft. But when you consider the considerable efforts Apple has made in marketing the iPhone—rapidly developing its App Store and underlying platform—it's surprising that the devices don't account for a bigger share. This is especially true when you factor in the lackluster response to Windows Mobile 6.5, Microsoft's newest smart phone system, and the fact that Microsoft will soon announce a major new Windows Mobile version that will likely sever technological ties with the past.

Windows Mobile's continued sales presence can be attributed only to the business market, as it's hard to imagine many consumers weighing the available choices at a wireless carrier and walking away with a Windows Mobile device. The business market, of course, has served Microsoft faithfully in the past, especially with PCs and servers, and it's likely that brand familiarity is playing a role here. And while Apple has added the minimum Exchange support necessary to gain some corporate traction, the iPhone doesn't offer the full experience afforded by RIM or Microsoft. So it's made some headway with trend-setting CEOs and in smaller businesses, but it's rarely used broadly in large corporations.

Looking at the handset makers, the top five manufacturers, in order, are Motorola, LG, Samsung, Nokia, and RIM, and it's telling that the number-one smart phone platform maker, RIM, barely makes the top five in this list. The message here, apparently, is that variety pays off: Each of the top five manufacturers sells a large number of smart phone models via a wide range of wireless carriers. And Apple, whom many would consider one of the top smart phone makers, doesn't make the list at all. This, too, flies in the face of conventional wisdom, as the United States is Apple's strongest market. But the iPhone is available only from AT&T, and only in a single form factor.

Market researchers at comScore also provided some insight into what people are doing with their smart phones—beyond making phone calls, of course. The number-one activity, by far, was text messaging, which accounted for 63 percent of usage in the quarter. Beyond that, users browsed the web (27.5 percent), played games (21.6 percent), downloaded and used apps (17.8 percent), accessed social networking services and blogs (15.9 percent), and listened to music (12.1 percent).

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