Android and iPhone Achieve Smartphone Duopoly

With various market-analysis firms weighing in on end-of-year sales for smartphones, one trend is holding firm: Android and iPhone share a duopoly that controls over 90 percent of the market, leaving just a pittance for alternative platforms like Windows Phone and BlackBerry. And that market is humongous, with a record 700 million units sold in 2012.

Related: IDC: Android Utterly domanates the Smartphone Market

Strategy Analytics claims that Android controlled over 68 percent of the worldwide smartphone market for all of calendar year 2012, while Apple’s iPhone came in a distant second with over 19 percent. Combined, the two platforms controlled nearly 88 percent of the market for all of 2012.

And their combined dominance only increased throughout the year. In Q4 2011, Android controlled 51 percent of the market, with Apple coming in at 23.6 percent, Strategy Analytics claims, a combined share of 74.6 percent. By Q4 2012, Android market share had surged to over 70 percent, while iPhone came in at 22 percent. Together, these two platforms held over 92 percent of the market heading into 2013.

 “The worldwide smartphone industry has effectively become a duopoly as consumer demand has polarized around mass-market Android models and premium Apple designs,” a statement credited to Strategy Analytics analyst Scott Bicheno notes.

The numbers are somewhat staggering. More than 700 million smartphones were sold in calendar year 2012, about double the number of personal computers that were sold. And device makers sold 217 million smartphones just in Q4 2012, up 38 percent from the 157 million units sold in the same quarter a year earlier. Growth is starting to slow, however, as the North American market in particular has become “saturated,” Strategy Analytics claims. But even that slowing is relative: Smartphone sales still grew an incredible 43 percent in 2012, compared with 64 percent in the previous year.

Looking at specific handset vendors, Samsung was the biggest maker of smartphones again with 213 million units sold in 2012, good for over 30 percent market share. Apple came in second with 136 million units, or 19.4 percent market share. The distant third-place finisher? Oddly enough, it was Nokia, with 35 million units and 5 percent market share.

Since we know Nokia sold 13.4 million Windows Phone handsets in 2012, and that Nokia controls about 74 percent of the market for Windows Phone, we might extrapolate a rough market share number for Windows Phone (which Strategy Analytics doesn’t explicitly address): 3.3 percent for 2012. The firm separately noted that Nokia “lacks a true hero model in its range that can be considered an Apple iPhone or Samsung S3 killer.” This despite high-profile launches for several new Lumia handsets, including the Lumia 920, which Nokia sells only through select wireless carriers.

Related: Windows Phone 8 Devices Significantly Undercut iPhone Pricing

 

Discuss this Article 8

abw1987
on Jan 28, 2013
It's true, Nokia has no "hero" device. The Lumia 920 is nice, but bulky, and only available on certain carriers. I'm about to purchase my first ever Windows Phone, the HTC 8X. I really hope Microsoft can turn the race into a Triopoly. All three platforms have unique strengths that would benefit consumers by rubbing off on each other.
chuckb84
on Jan 28, 2013
No disputing the numbers. It's just like the Mac/Windows in one way. Apple pioneered a great idea and Microsoft /Google simply copied the product and sold it through multiple vendors to achieve greater marketshare. However, that's where the similarity ends. Apple is not going to face a near extinction with 1.5% marketshare as happened with the Macintosh. Reasons: In the case of mobile devices the cost differential can never be as pronounced because most of the cost is the wireless service. Over the life of a phone, the cost to the buyer for the phone hardware is ~10% of the total. So buying a premium Apple (or other) product is much easier, and that's even true for businesses, because they make total cost of ownership decisions, unlike many consumers. The second difference between Mac/Windows and Android/iOS is the cloud and the media/app/software ecosystem that the devices connect to. Apple's is the best, period. No one disputes this. Access to apps, music, videos, movies, and perhaps most importantly, software updates for the iOS devices, is seamless, curated, and vertically integrated. Mistakes, like the maps debacle, are newsworthy because they are so rare. Android is fragmented, hard to manage and software updates are problematic for the vast majority of devices. Where does this leave all the other vendors? Well, businesses aren't going to use Android for the same reasons (and more) they avoid Linux. Windows Phone could be a strong contender here because IT guys deal with Microsoft for all the other infrastructure. It's up to Microsoft to sell it. But Windows Phone is tied by a common user interface to Win8 and that isn't going well. After that the WIndows Phone advantage is to run a gently curated system and push the advantages of that over the chaos of Android and the iron fist of Apple. I believe Paul has noted this before; he's right and it dovetails with getting Winphone into the business world.
ChristianHG
on Jan 28, 2013
By not supporting either iOS nor Android, Microsoft is actually harming its costumers, since they're most probably using either OS on their smartphones. No MS Office. Developers can't use Visual Studio. Etc. Instead they seem to be content in spending money and resources trying to fuel up an also-ran going nowhere -- and giving developers tools they won't use to build programs to an OS that no-one uses. Sad.
Todd (not verified)
on Jan 28, 2013
Windows phone is the OS2 Warp of the smartphone world
Oleg R (not verified)
on Jan 28, 2013
Although the Mac/PC analogy with iOS/Android is superficially attractive, the $100B question is whether it is a good analogy for predicting how the smartphone market will play out. That is, are consumers as "locked in" to their current choices they way the analogy presumes. One very interesting question which might shed a lot of light on whether there is a entrenched "duopoly" is how many of today's S III owners are people who switched from iPhone, as opposed to people who entered the smartphone market through Android. I've not seen any surveys of this, but if the number is large (and it may well be) I think the smartphone market may be a lot more fluid than the PC/Mac market was.Of course, any competitor will have to offer the consumer a viable ecosystem (I think we used to just call this software) if it is going to be an attractive alternative. There is little reason to think that MS won't have one that is competitive with Android and iOS, as it's come some distance to offering one already. I think the Smartphone story is far from written. In this regard, the Strategy Analytics comment that WP has no hero phone that appears to be an "iPhone killer" seems particularly obtuse. There is nothing about the S III that made it appear an "iPhone killer" when it was launched (or even now), yet look where we are.
saqrkh
on Jan 28, 2013
I think a 808 PureView-type Lumia would be the most distinct from the iOS/Android competition. The camera 'angle' (pun intended) might be interesting, especially considering Nokia's acquisition of Scalado. However, unless heavy demand for a camera-centric mobile experience exists, this may only succeed as a niche product. Of course, given the success of the Galaxy Note-series, one may never know until it is tried. But to be honest, I earnestly believe Nokia's best bet lies in disturbing the low and mid-end markets with easily affordable but relatively high quality devices.
hellcatm
on Jan 29, 2013
I agree with Oleg R I don't think we can use the same analogy with smart phones as we use with PC vs mac. PC and mac software can get expensive, you need Office that can be a few hundred dollars, you need an Adobe product even more. Even games are $60 a peace unless you buy used. Thats what locks people into PC or mac. If Office was $15 and Photoshop was $25 people would probably switch if they wanted to. Also unless you get a dirt cheap POS PC you're going to pay $700+ and for a gaming PC thats over $1000, macs are even more expensive. Smart phones on the other hand apps are cheap in comparison. Also people usually buy their phone when their contract runs out and it costs $99-$250 which is also cheap. You can't compare the two. I think people are more willing to go to what they want on a whim with smart phones because apps are cheap. Syncing your music and files between the two is pretty simple (at least with Windows Phone). Now tablets are in the middle. There are cheap Android tablets but ipads are expensive and Windows 8 tablets are expensive too, BUT you still have the cheap apps. People won't buy tablets as frequently as they would smart phones (unless they get them through their phone dealer or unless they get an Android device). Sure you see people buying every new ipad that comes out, but people buy a new mac every time they come out too...thats just the what ever it is that apple does to make their fans go nuts (I'm still not writing off subliminal messaging). :P I think the main reason Windows Phone 8 hasn't sold more is because of the apps. People have it in their head that number of apps is important even though more than half the apps on the iphone have never been even downloaded (I'm not sure about Android). It'll take time but I'm seeing more people talk about Windows Phone and I"m seeing some on the street as well. It'll take time.
dklippi
on Jan 29, 2013
Just to counter all the haters I will say I enjoy my Windows Phone. Who cares? Exactly. I don't care what you use and you don't care what I use. The article is just stating what everyone already knows. Everyone also knows it is certainly possible that this time next year the numbers will be different. Whoopty do.

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