Windows Phone is poised to be the fastest-growing mobile OS over the next five years, but when all is said and done, Microsoft will boast just 9 percent of the world's smartphone shipments, according to a newly released report from research company Analysys Mason.
All told, the report ("Smartphone markets: worldwide trends, forecasts and strategies 2012-2017") predicts Microsoft will ship 136 million Windows Phones by 2017, up from 11 million units in 2011. But those shipments will represent just 9 percent market share: Apple will claim 23 percent, and Android will dominate with 58 percent of the pie.
"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," said Ronan de Renesse, author of the report and principal analyst at Analysys Mason. "It would also encourage subscribers to move from one OS to another, as well as improve operators' negotiating position in smartphone retail."
Smartphone connections will grow nearly threefold over the next five years to reach 3.4 billion in 2017, according to the report. Smartphone shipments will increase from 700 million in 2012 (41.2 percent of total handset shipments) to 1.37 billion by the end of 2017 (70 percent share of total handset shipments).
While the number of smartphones swells, Google won't see its overall market share budge beyond 58 percent, however, "largely because of a lack of other platforms from which to capture additional market share," according to the research company.
Also of note: Today, less than half of new phone purchases are upgrades. By 2017, the figure will be three in four. That means vendors will have to go to greater lengths to retain customers. "This will create a significant strategy shift for stakeholders," said De Renesse. "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."
On the hardware side, Analysys Mason anticipates that hardware vendors will continue to jockey for market share. Vendors with their own content and multidevice ecosystems -- such as Apple, Samsung, and Sony Mobile -- or those with a strong presence in emerging markets (including Huawei and ZTE) will maintain or increase their market share at the expense of rivals, according to the report. Chinese manufacturers Huawei and ZTE will have a combined smartphone market share of 22.2 percent in 2017, up from 7 percent in 2011.
Standout vendors will be those that focus on value over volume, according to Renesse. "Value rather than volume has become a priority for top smartphone vendors. It results in a 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," he said.
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