Windows Phone: Down but not out in fight with Android

Android accounted for more than 56 percent of smartphones sold in Q1, but the market has become highly commoditized and Microsoft-Nokia partnership may soon bear fruit

Android is sitting pretty atop the smartphone market, accounting for more than 56 percent of the 144.4 million smartphones sold worldwide this past quarter, according to Gartner. The second closest rival was iOS, which claimed 22.9 percent of the market.

On the other end of the spectrum, sales of Windows smartphones accounted for just 1.9 percent of the market, lower than even Bada's 2.7 percent share for the quarter. RIM, meanwhile, clung to a 6.9 percent share.

Despite Android's market share swelling from 36.4 percent to 56.1 percent year over year, the platform's continued dominance is by no ways guaranteed, according to Gartner: The smartphone market has become highly commoditized and differentiation is shaping up as a challenge for manufacturers.

"This is particularly true for smartphones based on the Android OS, where a strong commoditization trend is at work and most players are finding it hard to break the mold," said Anshul Gupta, principal analyst at Gartner. "At the high end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid- to low-end segment, price is increasingly becoming the sole differentiator.

"This will only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability, and scattered market share," Gupta said.

Both Microsoft and RIM may have a shot at chipping away Android's lead, though it won't be easy. Microsoft is paying the price for taking so long to bring a viable mobile OS to market. Still, the company is a powerhouse in the technology field with the resources, connections, and name recognition to give its platform a boost. The company's partnership with Nokia finally appears to be bearing fruit in the Lumia 900, which is reportedly enjoying strong sales and has garnered praise from reviewers and consumers (not to mention Siri). Praise for the Lumia 900 is by no means universal, however; InfoWorld mobile maven Galen Gruman was not so impressed.

RIM, meanwhile, may have a more difficult time gaining back lost ground in the mobile space. The company sold 9.9 million mobile handsets in the first quarter of 2012, down from 13 million in Q1 in 2011. "RIM desperately needs to deliver winning BlackBerry 10 products to retain users and stay competitive," said Gupta. "This will be very challenging, because BB10 lacks strong developer support, and a new BB10 device will only be available in the fourth quarter of 2012."

On the hardware side, Samsung took the No. 1 spot in smartphone sales from Apple, having sold 38 million devices for the quarter. Android's growing popularity contributed to Samsung's success. Samsung's Android-based smartphone sales in Q1 represented more than 40 percent of all Android-based smartphone sales worldwide, according to Gartner.

Apple and Samsung raised their combined share to 49.3 percent, up from 29.3 percent in the first quarter of 2011, according to Gartner, while widening their respective leads over Nokia, which saw its smartphone market share drop to 9.2 percent.

"Smartphone sales are becoming of paramount importance at a worldwide level. For example, smartphone volumes contributed to approximately 43.9 percent of overall sales for Samsung as opposed to 16 percent for Nokia," Gupta said.

Like Microsoft, Nokia's success in the mobile market will depend heavily on the success of Windows Phone.

This story, "Windows Phone: Down but not out in fight with Android," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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