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Electronics Production | February 23, 2011

Nokisoft vs Android? Android wins!

Smartphone markets are on a roll. Shipments grew from 177 million in 2009 to 302 million in 2010, a remarkable 71% growth rate.
Meanwhile, handset OEMs’ market shares have fluctuated widely: Nokia’s dropped from 39% to 33%, even as the collective share held by manufacturers of Android-based phones increased from 4% to 24%. “In short,” says ABI Research vice president Kevin Burden, “the market has been disrupted during a period of record growth.”

Today’s smartphone includes a long and growing list of technologies, components and software. Some combinations of these find favor with consumers, others do not. Smartphone OEMs’ strategies determine how these components are stitched together into cohesive products.

With the rise of Android, the number of handset OEMs with significant smartphone market share increased in 2010. This competitive landscape is forcing handset OEMs to consider their device and portfolio strategies carefully as they jockey for position.

Many are placing their bets on Android. Are they right?

Senior Analyst Michael Morgan elaborates: “Motorola has pinned its entire turnaround strategy on Android. As competitors flood the Android ecosystem, Motorola wants to become known as the OEM that brings Android devices to business. Meanwhile Samsung is hoping that it can convert its feature phone customers to smartphones, on the backs of both Bada and Android. And Nokia has now moved away from a purely proprietary OS strategy.”

How are these strategies working?

It appears that handset OEMs choosing Android have had success that is both driven by and limited to the reach of their distribution networks and operator partnerships. “Unfortunately,” Morgan says, “OEM-specific Android 'enhancements' have not yet created a clear differentiation in consumers’ minds. Smartphone OEMs adopting Android as a key platform must produce meaningful innovation or risk losing significance."

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