updated 02:50 pm EDT, Tue July 7, 2009
Apple May Overtake Nokia
Apple's share of the smartphone market is growing quickly enough that it could overtake Nokia's in as little as four years, according to data from Generator Research. The analyst group sees the market almost reversing itself from its situation today and believes Nokia will tumble from about 40 percent share today to just 20 percent in 2013. iPhones, meanwhile, should accelerate and hit 33 percent of the market at the same point. Apple would match Nokia's share sometime in 2011 and ship as many as 77 million phones that year.
The apparent flip is expected to come about both through ideal conditions for Apple as well as an inability for Nokia to pay attention to smartphones as much as it would like. Generator sees Apple as entering a "golden age" of fast growth both because of the combination of the iPhone and the App Store, with one driving sales of the other. It also has the benefit of selling both to smartphone users as well as to existing iPod owners. A crossover device appealing to high end media phone users, such as the $99 iPhone 3G, should also give the company a boost.
Nokia, in turn, is seen as a victim of its own emphasis on low-cost phones. As it makes most of its current money selling budget devices in developing countries where there's still room to sell phones in that category, the company doesn't have an actual financial stake in keeping smartphones at the top. The Finnish giant is likely to try and defend its territory but may be only half-hearted in funding its efforts as the smartphone business won't be where Nokia makes its true profits.
Much of Nokia's already ongoing decline in share is commonly attributed to its own slow response to competitors. While it responded to the BlackBerry's popularity outside of work relatively quickly with the E71, the company took a year and a half to react to the iPhone's debut with its own touchscreen phone, the 5800 XpressMusic, and has only just launched its second in the form of the N97. The rapid expansion of the iPhone's App Store also pushed Nokia to launch the Ovi Store as a central portal for software despite running its N-Gage and music stores with modest success for considerably longer.
Generator is convinced that Apple could speed up its sales further by more tightly integrating the iPhone app ecosystem with carriers, which the researchers believe would let developers target specific networks and perform feats that aren't normally possible with Apple's carrier-neutral strategy. Apps could be written to send individual or group SMS messages for alerts, for example, or could establish calls and customize ringtones.