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Will Apple, Google and Samsung lose the smartphone market?

Mike Elgan | Jan. 28, 2013
Mobile phone competition intensifies. Linux-based platforms are gunning for iOS and Android, and Chinese companies want to price the iPhone and the Galaxy S line out of the market.

Just five years ago, the global epicenters of the mobile phone universe included Finland and Canada, where Nokia and Research In Motion are headquartered.

After the launch of the Apple iPhone in 2007, and after Android phones started getting really good, iOS and Android devices began their sustained assault on market share, and today they dominate totally.

From the perspective of who is making the majority of physical smartphone handsets, the clear leader is South Korea's Samsung, which sells more than one quarter of the world's smartphone handsets, followed by Apple, which sells about 18 percent. No other company gets anywhere near a two-digit market share globally.

From the perspective of platforms -- who makes the operating systems and controls both the functionality and the app ecosystem that powers the world's smartphones -- it's clear that Google's Android is by far the world's leader, followed distantly by Apple's iOS.

From a business perspective -- who's making money on mobile phones in one way or the other -- the clear winners are Apple, Google (via advertising, mostly) and Samsung.

So today, we can say that the smartphone market is solidly controlled by two companies that are less than nine miles apart from each other in Silicon Valley in the U.S. (Apple and Google), plus Samsung in South Korea.

These three companies in two countries ship the handsets, make the operating systems and collect most of the profits.

But what will the mobile market look like five years from now?

Meet the new operating systems

All is not well in the universe of mobile platforms, or operating systems.

Apple's iOS platform used to be much better loved by Apple fans. It had by far the most and best apps, and it was perceived by most to be innovative and leading edge.

But the Android platform is either catching up to, or has already surpassed, iOS in both innovation, as well as the quantity and quality of available apps. When you combine software improvements on Android with a vastly greater variety of available handsets, many former iPhone users are defecting to the other side, or thinking about it.

While users are growing ever fonder of the Android platform and its apps, hardware makers that create Android-powered phones are growing less fond. The issue is direct competition from Google itself.

Google has twice launched phone initiatives where it decided to sell Google-branded phones. The first initiative was in early 2010 when Google launched the Nexus One, followed by the Nexus S. They were manufactured by HTC, but the fact that Google was involved in their design and sold them directly gave the phones a huge advantage over any phone HTC might sell -- or any phone HTC's competitors might sell.

 

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