While Microsoft’s Windows Phone will be the fastest growing operating system in terms of shipments in the next five years, it won’t get anywhere near Apple’s share of the smartphone market until 2017, Analysys Mason predicts.
Windows will be the fastest-growing operating system (OS) in terms of number of shipments in the next 5 years, growing from 11 million units in 2011 to 136 million units by 2017. However, Windows smartphones will account for only 9pc of the world’s smartphone shipments in 2017, compared to Apple’s 23pc and Android’s 58pc.
Analysys Mason predicts that Android smartphones will account for 58pc of the smartphone market by the end of 2013, but will then stagnate and maintain that market share for the next four years because of a lack of other platforms from which to capture additional market share.
Having a third significant OS player like Windows in the smartphone market would benefit mobile operators because it would reduce Apple’s and Google’s control over the market,” explained Ronan de Renesse, author of the report and Principal Analyst for the Mobile Broadband and Devices research programme.
“It would also encourage subscribers to move from one OS to another, as well as improve operators’ negotiating position in smartphone retail.”
Significantly, the report also predicts that smartphone upgrades will drive three out of every four smartphone purchases by 2017, where today it is currently less than half.
De Renesse explained: “This will create a significant strategy shift for stakeholders. Operators will have to increase the value of smartphone contracts by offering early handset upgrades and larger data allowances to retain customers, and handset vendors will have to develop stronger app and content ecosystems (as Apple has done) in order to increase loyalty.”
4G and growth of smartphone connections to 2017
The report also indicates that smartphone connections will grow nearly threefold in the next 5 years to reach 3.4 billion in 2017. Smartphone shipments will rise from 700 million in 2012 (41.2pc share of total handset shipments) to 1.37 billion by the end of 2017 (70pc share of total handset shipments).
However, the rate of growth in the rate of new smartphone connections will significantly decline – from 39pc in 2011, to 29pc in 2012. In 2013, this growth rate will decline further to 20pc.
Handset vendors’ share of smartphone shipments is predicted to be volatile in the next 5 years, as it has been previously (Nokia and Research In Motion (RIM) were among the top handset vendors as recently as 2011). Vendors with their own content and multi-device ecosystems such as Apple, Samsung and Sony Mobile or those with a strong presence in emerging markets such as Huawei and ZTE will maintain or increase their market share at the expense of others. Chinese manufacturers Huawei and ZTE will have a combined market share of 22.2pc of smartphone shipments in 2017, up from 7pc in 2011.
“Value rather than volume has become a priority for top smartphone vendors. It results in an overcrowded high-end smartphone segment with huge marketing budgets. Keeping up the pace set by Apple and Samsung will be tough and other manufacturers will require a lot of ingenuity, which we are starting to see,” de Renesse explained.
The report also suggests that smartphones are the most important element of the 4G ecosystem, contributing more than 80pc of 4G connections in developed markets by the end of 2017.
Japan, South Korea and the USA lead smartphone-based 4G growth globally, and together account for 77pc of 4G smartphone connections. Western Europe is expected to catch up by the end of 2013 when countries such as France, Italy, Spain and the UK further deploy their 4G networks.
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