Gartner Market Research Estimates Windows Phone 7 to be #2 in Market Share By 2015

Daily Tech ^ | 04/08/2011 | Jason Mick

[SeekAndFind]

Gartner, Inc., one of the world's most respectable market research firms, has announced [press release] that its research supports our hypothesis that Microsoft Corp.'s (MSFT) Windows Phone 7 smartphone OS will become the market's second largest player when the phase-out of Nokia Oyj.'s (NOK) Symbian OS is complete.

In a research report released this week, it estimates that this year the platform will only rise modestly from 4.2 percent market share in 2010 to 5.6 percent in 2011 (still behind Symbian, in fifth place). But by 2012 it will jump to a 10.8 percent, switching places with Symbian. And three years later in 2015, it will have surpassed iOS and Research in Motion, reaching 19.5 percent market share, taking the #2 spot in world market share.

The report is most pessimistic about Canadian smartphone maker Research in Motion, Ltd.'s (RIM) prospects. It predicts that RIM will fall from a 2010 peak market share of 16.0 percent to 11.1 percent by 2015. It also predicts that Apple, Inc.'s (AAPL) iOS will rise this year, but fall by 2015.

Aside from Microsoft, the other big winner if Gartner's predictions hold true will be Google. Gartner predicts that Google will rise from a narrow lead of 22.7 in 2010 world sales, to a dominant 49.2 percent market share by 2012.

Variety of handset options, bleeding edge hardware, and a relatively strong brand image continue to drive Android sales upward even as some of its other competitors flounder.

On Wednesday in the Asian markets, Taiwan's HTC Corp. (2498) passed Finnish phonemaker Nokia in total market cap. Market cap isn't the best measure of true performance or company reach (Apple recently passed Microsoft), but it does off a bit of a thermometer to the market's perception of a company.

HTC's cap hit $33.8B USD after shares rose 5.3 percent in the day's trading. Nokia managed a modest 1.1 percent raise, with its cap closing at $33.6B USD.

Nokia ships far more phones than HTC. HTC, currently Asia's second largest phone maker (in market cap), shipped 24.7 million handsets in 2010, according to Gartner. By contrast, Nokia shipped 461 million units last year.

However, HTC's phones are largely high-profit smartphones, whereas Nokia's sales are still heavily driven by low-margin older phone designs. In that regard the companies are much closer in profit than the sales numbers might indicate. HTC's operating margin, a measure of profitability was 16 percent during 2010's final calendar quarter, while Nokia's was 7 percent.

Traders' valuation of HTC may also be based on the fact that the company has a great deal of upward momentum. Nokia, meanwhile, has a degree of downward momentum as it tries to make the painful transition from Symbian to Microsoft's Windows Phone 7.

HTC's rise in the smartphone market has been nothing short of meteoric. The largely unknown device maker has risen to become one of the premier Android smart phone makers, trailing only South Korean giant Samsung Electronics (005930). Its success largely owes to its decision to fully throw its support behind the "winning horse" in the smartphone race -- Android.

The company does face some threats, though, such as Chinese Android phone-maker ZTE

[mnehring]

2015 is a pretty bold prediction. The way things change and new phones are released, I wouldn’t want to even predict by the end of the year.

[SeekAndFind]

While Symbian isn't exactly a household name in America, for years it sat on top of global smart phone sales, thanks to market leader Nokia's support. With today's announcement of a strategic partnership with Microsoft, Symbian's owner Nokia let slip a market-moving detail: it is phasing out Symbian for Windows Phone 7.

And just like that Windows Phone 7 has been slated to, in all likelihood, claim the #2 spot in smart phone global sales by operating system.

Table 1
Worldwide Mobile Communications Device Open OS Sales to End Users by OS (Thousands of Units)

OS	2010	2011	2012	2015
Symbian	111,577	89,930	32,666	661
Market Share (%)	37.6	19.2	5.2	0.1
Android	67,225	179,873	310,088	539,318
Market Share (%)	22.7	38.5	49.2	48.8
Research In Motion	47,452	62,600	79,335	122,864
Market Share (%)	16.0	13.4	12.6	11.1
iOS	46,598	90,560	118,848	189,924
Market Share (%)	15.7	19.4	18.9	17.2
Microsoft	12,378	26,346	68,156	215,998
Market Share (%)	4.2	5.6	10.8	19.5
Other Operating Systems	11,417.4	18,392.3	21,383.7	36,133.9
Market Share (%)	3.8	3.9	3.4	3.3
Total Market	296,647	467,701	630,476	1,104,898

Source: Gartner (April 2011)

[KoRn]

lol!

[Jeff Gordon]

Windows 7 phone has been #2 since it was introduced and always will be.

[SeekAndFind]

RE: Windows 7 phone has been #2 since it was introduced and always will be.

---

I thought the top 2 were the Android based and the Apple iOS based (iPhone) phones...

[OCC]

Win Phone 7 needs integrated device data encryption, as does Android. When that happens, game over for RIM.

[SeekAndFind]

RE: Win Phone 7 needs integrated device data encryption

My friend, a marketing person for Microsoft in Washington State tells me they’re seriously working on it. They know the market demand.

[OCC]

I know one big enterprise environment that would like to retire it’s BES servers as soon as that happens :)

[Jeff Gordon]

There are more than one meaning for #2. :-)