Fortune’s Seth Weintraub has written a lengthy article about how 2011 will be an explosive year for the Android operating system. He also pointed out that about 269.9 million smartphones were sold this year compared to the 173.5 million shipped in 2009. In 2011 we could see a shipment of about 500 million smartphones across the world. I’ve pulled up a couple of charts from previous reports I have written about in regards to smartphone market share to make a prediction myself. The chart in the top left is Smartphone Market Share from Q1 2010 by Nielsen (Exhibit A). The second chart is smartphone OS mix Q3 2010 put together by Millenial Media, a mobile advertising analytics company (Exhibit B).
Android vs. iPhone
I believe that between these two charts, you can fairly assess what is going to happen in 2011. In Exhibit A, you will notice that Android only had a 9% market share. Fast forward two quarters later and you will notice that Android now has a 38% market share. The iPhone operating system market share jumped from 28% to 38% between Exhibit A and Exhibit B. Android has been able to spread at a rapid pace due to the open source nature of the mobile operating system. Since OEMs have to pay very little to get Android running on their phones, why not make them the default OS? HTC, Motorola, LG and Samsung are seeing the benefits of doing so. These lower costs get passed on to the consumer and will the very same reason why I am predicting that Android will surpass the Apple iPhone in market share in 2011.
Despite a higher Android market share, it is unlikely that Google Inc. (NASDAQ:GOOG) will be making more money than Apple from their mobile operating system. Apple Inc. (NASDAQ:AAPL) still has a stronger consumer application ecosystem. In other words, people are more willing to spend money on Apple applications than Google applications. Angry Birds is a huge example as the full version is free on Android and paid on iOS.
The Future of RIM
RIM is the perfect example of what happens if you don’t keep your eye on the ball. In Exhibit A, RIM had a 35% market share and suffered a huge blow over the last two quarters as they now have a 19% market share. If RIM does not clean up their act quickly, then they will likely see their market share drop to 10% in 2011. RIM has been attempting to address the issue of a weak application ecosystem on their operating system by decreasing the minimum app price and increasing the revenue split in favor of developers. But this still doesn’t change the fact that every BlackBerry owner I have talked to is not that happy with the web browsing experiences on their devices.
The New Guy In Class: Windows Phone 7 OS
I believe that 2011 will be a break-out year for Microsoft. Microsoft’s application ecosystem is starting to come together. There are some great applications on the Windows Marketplace. And Microsoft’s OEM partners are developing phones that have specifications comparable to Android devices and the iPhone. Microsoft is rumored to be in talks with Nokia. We may see Symbian’s smartphone market share get replaced by Windows Phone 7 in 2011 if a deal comes through. Microsoft has a bit of money to back them up for smartphone marketing too.
The year 2011 will be an interesting year in the smartphone market. What are your predictions? Let us know in the comments.