Gartner: Windows Mobile OS facing meltdown amidst smartphone boom

Paul Nesbitt

Windows Mobile lost 28% of its market share in the smartphone market in one year, according to Gartner. And the research outfit painted a grim outlook for Microsoft in the smartphone market as its OS gets squeezed between proprietary systems from Apple and RIM on one side and open source OSes like Android and Symbian on the other.

Gartner’s research revealed that Microsoft had a 7.9% share of the global smartphone market during the third quarter of this year, down from an 11% share for the same quarter in 2008. During the same period, Apple’s market share with the iPhone rose from 12.9% to 17.1%, while RIM’s market share with the BlackBerry rose from 16% to 20.8%. Symbian’s market share, meanwhile fell from 49.7% to 44.6%, a drop of 10%.

Meanwhile Google’s open source smartphone OS, Android, rose from nothing to 3.9%, Palm’s WebOS took 1.1% and various other Linux-based smartphone OSes accounted for 4.7%.

Gartner predicts that the global smartphone market will grow by 29% to reach 180 million units for the whole of 2009, overtaking notebooks in total unit terms.

‘Currently smartphones account for 14% of overall mobile device sales, but Gartner expects by 2012 they will make up around 37 per cent of global handset sales. Smartphone revenue is forecast to reach US$191 billion by 2012, higher than end user spending on mobile PCs, which is forecast to reach US$152 billion in 2012. From 2009, user spending on smartphones will start to surpass the forecast for consumer notebooks,’ the company predicted.

Clearly the smartphone market will become a very important market, but Gartner warned PC vendors who are ‘eyeing the booming smartphone market’ that it will prove a hard nut to crack, especially if they enter the market with handsets running Windows Mobile.

Gartner analyst, Roberta Cozza predicted that 2012 around 62% of the whole smartphone market will be open sourve ‘with Symbian, Android and other Linux flavours.’ Meanwhile the rest of the market will be dominated by ‘closed environments’ like iPhone and BlackBerry.

Cozza said that Microsoft may find it harder to charge licence fees from handset makers, who increasingly have the option to use free of charge OSes like Google’s Android. Already, Microsoft’s licensees, including Samsung, HTC and Sony Ericsson are developing Android handsets, and Palm and Motorola have stopped offering Windows Mobile phones.

Windows Mobile’s strongest position is in the enterprise market, but according to Gartner around 80% of smartphones are sold to consumers.

PC vendors have traditionally used Windows Mobile when they offered smartphones, but not counting Apple, Gartner found that ‘PC vendors cumulative share in the smartphone market has been static at less than 1% for years’.

‘PC vendors should realise that while convergence of technologies offers an opportunity to enter into the smartphone arena, the business models, go to market and positioning of products is very different from the PC market,’ said Cozza. ‘PC vendors will find it difficult to simply use existing supply chains and channels to expand their presence in the smartphone market. The smartphone and notebook markets are governed by different rules when it comes to successfully marketing and selling products.’