Forty-three million smartphones were shipped worldwide in Q3 2009, making up 15% of total volumes. Growth slowed to just 5% annually, due partly to greater competition from touch-screen feature phones made by Samsung and LG, and also because some consumers delayed purchases ahead of the expected release of several new models based on Windows Mobile 6.5, Android 2.0, Maemo and LiMo during the Q4 Western holiday season. We expect the fourth quarter of 2009 to be more robust than Q3, with 20%+ growth following the launch of high-profile handsets such as the Motorola Droid, Samsung H1 and Nokia N900.
1. Symbian edged back to 44% global market share in Q3 2009, after a jump to 47% in the previous quarter. As expected, we believe the Q2 2009 boost from Nokia S60 volumes was temporary due to a mild build up of inventory in the market. Symbian is facing unprecedented competitive pressure in the second half of the year, as licensees such as Samsung, LG, Nokia and Motorola are flocking to alternative platforms like Android and Maemo.
2. BlackBerry achieved an impressive 20% global market share in Q3 2009, gaining more ground despite the Apple iPhone 3GS hype. RIM’s market share seems to have hit a ceiling in North America, but it is offsetting this by growing in every other region. The firm’s investment in the consumer segment is paying off and most of its new volumes are coming from non-business users.
3. Apple gained 17% market share worldwide in Q3 2009 and maintained its position as the third most popular operating system. Despite the exceptionally high wholesale price of the iPhone 3GS, many carriers have eagerly stocked the device in the hope that it will raise their ARPUs and slow churn. At some point, the iPhone will face a competitive slowdown, possibly caused by improved versions of Android, Windows Mobile 7 or Maemo. When that slowdown arrives, Apple has the option to downscale its portfolio and launch a stripped-down iPhone for the broader, mid-tier market.
4. Microsoft experienced its worst quarter in two years, dropping to 8% market share worldwide in Q3 2009. The downturn has been rapid; Microsoft went from being two points ahead of Apple to nine points behind in less than one year. This is partially due to the recent launch of the improved Windows Mobile 6.5 – many smartphone vendors have been choosing to wait for the new operating system rather than launch non-upgradeable devices that would be semi-obsolete in just a few months. A bigger problem for Microsoft is that the interest of licensees, such as Motorola and HTC, has drifted away to Android this year. Microsoft will have to deliver a superior user experience to continue justifying its relatively high licence fees or develop a superior services ecosystem for locking in consumer value.