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iPhone soars to 16.6% of smartphone market

updated 11:25 am EST, Tue December 2, 2008

Needham on iPhone Share

The iPhone is now not only the second most popular smartphone in the world but has saved the smartphone industry from a decline this past summer, according to a research note by Needham analyst Charlie Wolf. Apple's handset has represented about 16.6 percent of the entire smartphone market worldwide for the quarter ended in September and is now second only to Nokia. The latter has already acknowledged struggling smartphone share but is now known to have plummeted from 63.3 percent of the market a year ago to 43.6 percent owing largely to the spike in iPhone sales triggered by its 3G version.

The figure was also partly buoyed by RIM's BlackBerries and the overall range of Windows Mobile phones, though each of these declined slightly between the spring and summer.

Apple's relaunch has been strong enough that it ultimately masked a potential stall in the overall smartphone market. While the rate of growth was flat between spring and summer at 28.6 percent, Apple's presence has been the "only reason" the market didn't slow down significantly, Wolf says.

In the US, Apple is now also second only to RIM, earning about 30 percent of the country's smartphone sales through the iPhone versus the BlackBerry lineup's 40 percent. Windows Mobile and Palm OS are continuing to decline with Microsoft's platform holding 17 percent and Palm less than 10 percent.

The analyst explains the sudden shift towards iPhones as a reflection of a wider preference for the business models used by Apple and RIM, both of whom make the operating systems for their own devices and so have greater control over the hardware itself. While licensing operating systems for multiple hardware devices has worked well on PCs until recently, most smartphone makers have been reluctant to allow a second Microsoft monopoly with Windows Mobile and so reportedly chose Symbian more for its anti-Microsoft status than its merits.

"The Symbian operating system is generally considered to be less robust than
Windows Mobile or the Palm OS," Wolf claims. "But Symbian was able to retain a huge lead over competing operating systems chiefly through Nokia's endorsement and marketing muscle, especially in Europe, along with Microsoft's difficulties in attracting major handset manufacturers."

Symbian's share may decline further as some developers opt for Google's free Android platform instead, the researcher says, also noting that Microsoft has essentially had the advantages of Office and its Exchange servers taken away by the BlackBerry and the nature of the smartphone market. The desire from companies such as HTC and Sony Ericsson to develop front-ends like TouchFLO or the XPERIA panels for Windows Mobile simply shows that many of them have felt a need to mask a difficult stock interface, Wolf adds.

He is cautious to provide guidance and notes that Android's impact is liable to change as more phones and carriers come onboard beyond the existing range, which is limited to HTC's G1 for T-Mobile in the US and Europe. He nonetheless notes that the just-launched BlackBerry Storm is unlikely to gain traction given a series of high-profile mixed or negative reviews that attack the phone for neither outpacing the iPhone in the touchscreen market nor catering to RIM's core business audience.

"The Storm will probably ignite an upgrade cycle among some BlackBerry users," he writes. "But it's unlikely to lure a significant number of mobile phone users into the BlackBerry fold."

By Electronista Staff


  1. sfmitch

    Fresh-Faced Recruit

    Joined: Mar 2008


    iPhones are everywhere

    I flew from SF to TX for Thanksgiving (return flight through Denver) and I couldn't believe how many iPhones I saw, they were everywhere.

    Wow - I knew they were selling well but the last 2 times I flew (last Thanksgiving and April), I didn't see anything close to what I saw last week.

  1. lkrupp

    Junior Member

    Joined: May 2001


    How can this be?

    How can this be? The myriad of critics you find on the blogs and forums have declared the iPhone to be an unmitigated disaster because it lacks (insert favorite deal-killing missing feature or function here). Don't consumers listen to these marketing and engineering "experts" ?

  1. loudpedal

    Forum Regular

    Joined: Oct 1999


    Sold or shipped?

    Not to be a killjoy but according to Apple Insider, these figures were based on units shipped, not units sold. I know I see many more each passing month as well.

  1. MeandmyMac

    Fresh-Faced Recruit

    Joined: Feb 2008


    Not me...

    Since the iPhone has been on sale, I must be the Forest Gump of iPhone spotting... I've only seen three.

    "A few more and you can have yourself a cocktail!"

  1. testudo

    Forum Regular

    Joined: Aug 2001



    So, if the iPhone didn't exist, the smartphone market would've tumbled? Or could it be that it just stayed the same because people went to the iPhone, rather than some other putrid device?

    And all of this is just 'new' sales, not total market share. Except for Apple people, how many actually rush out to get the new version of anything?

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: Sep 2007


    iPhone or touch

    Are people seeing an iPhone or a Touch?? I hear that they sold like crazy over the holidays.

    It could be either as wi-fi is available in some airports/

    Just a thought.

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