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March 21, 2007

ABI Smartphone Market Report: Nokia Lead During 2006, Symbian OS Declined

During 2006, 70.9 million smartphone units shipped worldwide. More than half of those came from the same manufacturer—Nokia.

That’s according to ABI Research’s (News - Alert) latest report into the smartphone market, out Wednesday. The industry analysis firm said that, during 2006, Nokia dominated a 56.4 percent share of the industry, selling 40 million smartphones.

In somewhat distant second place was Motorola (News - Alert), which held 8.5 percent market share. Much of that company’s success, ABI said, was due to the success of its Linux-based devices in China, the MING in particular.
Another factor affecting the smartphone industry during 2006 was decline in dominance of the Symbian operating system, while Linux drew increasing interest. ABI noted that average selling price for smartphones has been on the decline, and as a result manufacturers are seeking ways to lower materials costs. One way is to trim the software bill by choosing an less expensive OS.
Symbian did lower its license fees during 2006 in response to this trend, but that move may not have been enough to ensure its continued dominance.
“It is not a question of ‘if’ but ‘when’ Linux will have an impact upon this market,” said ABI analyst Stuart Carlaw, in a statement. “In 2006, Symbian was estimated to have a 73 percent share of the smartphone OS market, yet our forecast is that it will to fall to 46 percent by 2012, due to strong competition coming most notably from Linux, but also from Windows Mobile.”

While materials costs is, of course, important to manufacturers, a perhaps more crucial topic is how to make their phones stand out from the competition.
“The key in differentiating smartphone products still lies in the physical design, and the look and feel of the user interface,” said ABI analyst Shailendra Pandey, in a statement. “The right combination of size, form factor, operating system, and bundled applications will determine the success of a smartphone.”
ABI noted that consumers increasingly are looking for smartphones with touch screens, MP3 players, WiFi and Bluetooth capability, fast processors, and lots of internal memory plus an expansion card slot. In other words, smartphones are becoming more than ever like miniature computers, rather than simply devices for voice communications.
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Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.


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