Industry research firm Gartner just released its latest data on mobile phone sales for the first quarter of 2012. There are some interesting points to be pulled out of this report that I wanted to address. Samsung dominates Android. Gartner’s data says that Korea-based Samsung shipped over 40 percent of all Android handsets last quarter. So that still leaves 60 percent of the market to other vendors, right? Yes, but according to Gartner none of these other vendors make up more than 10 percent of Android volume. None. In terms of handset brands, Samsung is also now the No. 1 phone maker in the world, ahead of Nokia. Nokia may have the No. 2 position in the market, but we need to remember that most of Nokia’s volume is based on the dying Symbian OS. Very little is based on its Windows-powered future at this point. So, considering that we’re looking at the death of the dumb phone over the next few years, let’s look at smartphone vendors and volumes. Samsung is the #1 player, having shipped 38 million smartphones. Most of these are Android powered, with a smaller number of Bada OS phones. Here’s how smartphone market share looks, by vendor, based on the Gartner data:
- Samsung with 26 percent market share
- Apple with 23 percent
- RIM with 7 percent
These are essentially the top three smartphone players right now. I realize that ZTE, LG and Huawei have a larger portion of the mobile market than RIM, but RIM is a pure play on smartphones whereas these three are not. Remember that other Android vendors have less than one quarter of Samsung’s volume.
What these data mean to Android manufacturers
If you look at the Gartner chart we’ve shown above, it’s crystal clear that most Android manufacturers are not having a lot of success right now. Even HTC, who was a former darling of the stock market, has been getting hurt. At the high end of the market, competing with Samsung is difficult. It’s tough to differentiate from an OS perspective because everyone’s using Android. There are only so many UI skins you can bring forward. I think one way to compete in the Android space is to develop amazingly useful middleware that turns your brand into a platform more than just a piece of hardware. But even then, Samsung is already heading down this path by recruiting Android developers for cloud-based middleware. At the low end, the biggest opportunity remains killing Nokia’s positioning. There is a lot of low hanging fruit here. Symbian is dying, and the only real challengers here are Android and BlackBerry right now. Windows Phone isn’t going after the low end yet, and neither is Apple. The bottom line is that Android manufacturers can’t think of themselves as competing against other Android manufacturers. That’s a recipe for disaster. They need to compete against Nokia’s 20 percent market share or build cloud services that differentiate their product from Samsung at the high end. Otherwise they’ll just be commodity hardware makers who earn no profit. But hey ... that’s still all good for consumer smartphone adoption.
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