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Android peaks as phone market slows

06 Jul 2012
00:00
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This year is set to be a banner year for Android, but not for the mobile phone market overall as a slump in the feature-phone market limits growth to single digits.

According to the latest Worldwide Quarterly Mobile Phone Tracker report from research firm IDC, vendors will ship a total of nearly 1.8 billion mobile phones this year, compared to 1.7 billion units shipped in 2011. That’s a mere 4% growth year on year, and the lowest annual growth rate for the mobile handset sector in three years.

IDC credits the expected slowdown to a projected 10% decline in feature phone shipments in 2012. While feature phones will still comprise 61.6% of the total mobile phone market this year, many feature phone owners are holding on to their phones in light of uncertain job and economic prospects, IDC says.

On the bright side, the smartphone segment will offset the feature-phone slump with a 38.8% increase to 686 million units, driven by high carrier subsidies, falling average selling prices and component costs, increased awareness and device diversity, and lower-cost data plans among other things.

“The smartphone parade won’t be as lively this year as it has been in past,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “The mobile phone user transition from feature phones to smartphones will continue in a gradual but unabated fashion. Smartphone growth, however, will increasingly be driven by a triumvirate of smartphone operating systems, namely Android, iOS and Windows Phone 7.”

Most of that will be Android, which will dominate the smartphone sector for the next four years. IDC expects Android to account for 61% of the smartphone OS market this year, driven largely by Samsung sales. On the downside, that’s as good as it’s going to get - Android’s market share will slip to just under 53% by 2016.

Interestingly, it won’t be Apple taking the credit for nibbling away Android’s market share, but Windows Phone. Indeed, Apple is expected to see its market share slip just a tad from 20.5% this year to 19% in 2016. By contrast, Windows Phone will be outselling iOS phones by that time, as its market share grows from an estimated 5.2% this year to 19.2% in four years, putting it in the No. 2 slot. (To keep that in perspective, iOS will still see healthy 10% CAGR growth in that time frame.)

Unsurprisingly, with Nokia now committed to Windows Phone, Symbian is fast slipping into obscurity. IDC expects Symbian-powered smartphone shipments to effectively grind to a halt in the next two years.

More surprisingly, however, the same fate won’t befall BlackBerry OS, the current woes of Research In Motion notwithstanding. IDC insists there will still be a market for BlackBerry OS-powered devices in emerging markets, for example, where users are looking for affordable messaging devices.

However, while BlackBerry will more or less maintain its current market share level (projected to be 6% this year and 5.9% in 2016), IDC’s Restivo says the gulf between the BlackBerry OS and its primary competition “will widen as the mobile phone market becomes increasingly software/app-oriented and the ‘bring your own device’ enterprise trend proliferates.”

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