1. US Smartphones Market Research Report by Rapidsoft
(2011-12)
Contents
Market Definition .................................................................................................................................... 2
History .................................................................................................................................................... 2
Major Players .......................................................................................................................................... 2
US Smartphone Market ........................................................................................................................... 3
Smartphone Market Players ................................................................................................................ 3
Smartphone Market Share ................................................................................................................... 4
Bases of Competition............................................................................................................................... 5
Smartphone Operating System ................................................................................................................ 6
iOS....................................................................................................................................................... 7
Android ............................................................................................................................................... 7
Windows Phone .................................................................................................................................. 7
BlackBerry OS ...................................................................................................................................... 8
Symbian .............................................................................................................................................. 8
Threat Analysis ........................................................................................................................................ 9
Conclusion............................................................................................................................................... 9

2. Market Definition
A mobile phone that is built with advanced computing features, abilities and connectivity than a feature
phone is known as a smartphone.
History
There was a time when Nokia was the market leader across the globe. But with change in technology
and advancements things changed. Before the smartphones were discovered there were PDAs (personal
digital assistants) and mobile phones. PDA allowed the user to carry important things with them that
included the meeting information, calendar, address book etc and the mobile phones allowed people to
be in touch with their loved ones as well as business associates.
In the year 1992, IBM came up with Simon which was supposedly the first smartphone as it also
included a calendar, address book, world clock, calculator, note pad, e-mail, fax functionality and games.
Later on Nokia came up with 9000 series in 1996. In early 2000, Microsoft introduced a new version of
the Pocket PC operating system. Later on smartphone devices based on the Palm OS were released and
then came Research in Motion (RIM) with the first BlackBerry.
With time things changed and Apple came with iPhone the most popular smartphone and then came
Android that completely ate the market share for BlackBerry and Apple’s share to certain extent. In
2010, 298 million smartphones were sold up from 175 million in 2009 up by 70%. Android players like
Samsung and Apple became the leaders leaving the Nokia, the Finnish company and RIM behind.
Similarly smartphone sales saw an increase in 2011 as well. In the 1st quarter, 428 million mobile
devices were sold showing a 19% increase over a year and overall 85% increase year by year.
Major Players
Major players include Samsung, Apple, RIM, HTC and Motorola. Apart from these there are many small
companies as well in the market like Nokia, LG and Dell etc. Major mobile operating systems in US are
android, iOS and to some extent RIM as well. Recently Windows phone in collaboration with Nokia has
also entered the market but we are yet to see the same creating an impact on the consumers. With iOS6
coming out this year it’s hard to say whether RIM’s BlackBerry and Windows Phone will survive or not.
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

3. Top Mobile Operating Systems in the US from Jan’11 to May’12
Source: StatCounter Global
This report has core focus on the US market as it differs from the Global Market. Every major player
that is present in US is also a Global brand but they function differently when operating in US. Like for
example the patent war that is always going on between Apple and Samsung.
US Smartphone Market
Smartphone makers from around the world have their foothold in the US market. But major players
include Apple’s iOS, Google’s Android and maybe to some extent Windows Phone and RIMs BlackBerry.
These days’ people are using their smartphones on the go for checking mails, using social networking
sites, playing games etc. Smartphone is not only a consumer phone it’s also become an asset for the
organizations around the globe as it helps in lowering down the burden, paperwork and increases
accuracy. The next segment includes the major players of the US Market.
Smartphone Market Players
Almost all the manufacturers sell their smartphones in USA. The most popular mobile operating systems
in US at present are Apple’s iOS and Google’s Android. Major handset manufacturers include US based
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

4. companies Apple Inc. and Motorola, Research in Motion Limited from Canada, Korea based Samsung
and LG and Finnish manufacturers Nokia.
Smartphone Market Share
Though Samsung is the market leader throughout the world when it comes to smartphones but it still
trails Apple in USA. Of the total smartphones shipped worldwide Q1 2012, Samsung accounted for 42.2
million — a 267% year-on-year surge (IDC ). Then it was Apple with 35.1 million (up 88.7%), Nokia &
BlackBerry with 11.9 million (down 50.8%) and 9.7 million (down 29.7%) respectively. Lastly it was HTC
with 6.9 million (down 23.3%).
Source: IDC
Samsung’s and Apple’s total in the US accounted for 99% of the domestic market sales during the first
quarter of 2012. With 30% of the market share Apple stood on top in USA while Samsung is just 6%
behind Apple with US market share of 24% in 2012. With the launch of Galaxy SIII and the predicted
launch of iPhone5 and iOS6 things could actually turn.
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

5. Source: NDP Group
Market share for mobile operating systems have also changed as compared to the last year’s reports.
iOS was the winner but Android has gained the market share and left iOS behind globally. Following
graph shows the 1st quarter results for both 2011 and 2012.
Bases of Competition
Every consumer has a different set of criteria when it comes to buying a product or service. There are
many factors that are involved. Like for instance a girl in fashion would like to buy a phone that is trendy
and looks chic but similarly a tech savvy person would look out for the features of the phone as well
apart from the style and looks. Major factors that influence the decision making involve aesthetic (look
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

6. & feel), hardware and software functionalities, services and price. Features and price are the most
important factors and is an integral part of the decision making when buying a smartphone. Consumers
look out for price, size quality and inbuilt functionalities while buying smartphone and lately apps have
also started playing a major role in the decision making as consumers have started to realize that many
apps in their smartphones can save them from carrying lots of devices with them. Apps have started to
make a big impact on the consumers and that has increased the sales of the smartphones around the
globe. It is expected that in-app purchase will increase to 65% of the total smartphone apps market from
just a mere 40% by 2015.
Price is a really important factor for buying smartphone. But for some price really does not matter and
having the most expensive mobile becomes a status symbol for them. Recently in a survey conducted by
ComScore revealed that around 50% of the people use smartphones to handle their business on the go.
Mobile operating system has become an important aspect for the consumers while buying a
smartphone. There was a time when people used phones by Nokia then RIM’s BlackBerry entered later
on Apple’s iPhone took the market share but ultimately Google’s Android became the winner and
people across the globe are buying either an iPhone or an android phone over BlackBerry, Nokia and
Windows phone.
Smartphone Operating System
Mobile OS is the controller of any smartphone, tablet, PDA or other smart devices. The latest Mobile
operating systems combine the features of personal computer operating system with touchscreen,
Bluetooth, WiFi, NFC and more. Latest Mobile Operating Systems and their features:
Comparison of smartphone OS
BlackBerry
iOS Android Windows Phone Symbian
OS
Open Handset Symbian
Company Apple Microsoft RIM
Alliance/Google Foundation
Current
5.1.1 4.0.4 7.5 7.0.0 10.1
Version
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

7. BlackBerry
iOS Android Windows Phone Symbian
OS
OS Family Darwin Linux Windows CE 7 Mobile OS Mobile OS
Closed Closed, Closed
Development Open Source, Closed
(propriet licensable, minor (proprietary
Model extendable (proprietary)
ary) customizations )
C, C++,
Programmed Many, .NET(Silverligh
Objective C, C++, JAVA Java C++
in t/XNA)
C
Source: Wikipedia
iOS
iOS which was previously known as the iPhone OS, is the popular operating system developed by Apple
Inc. Initially it was introduced in 2007 for iPhone and iPod Touch later on it was extended to support
iPad and Apple TV as well. Unlike other operating systems iOS only works on Apple devices. Apple’s app
store, iTunes, is the largest one with over 650,000 apps which have collectively been downloaded over
30 billion times (Apple WWDC keynote address). SDK for iOS was released in 2008 for 3rd party but with
no customization restriction.
Android
The most popular operating system of today is Android, which is a Linux based OS for smart devices like
tablets and smartphones. The OS is developed by Google and other companies. In 2006, Google had
bought the initial developer Android Inc. and in 2007, Open Handset Alliance, a consortium of
86 hardware, software, and telecommunication companies were decided to keep on improving Android
OS. This OS was released as an Open Source code under the Apache License. Open Source nature of the
OS makes it popular among the app developers and JAVA is used by the developers for writing Android
codes. The app store, Android Market now known as Google Play has more than 500,000 apps and it is
expected that more than 10 billion apps have been downloaded from Google Play.
Windows Phone
This is an OS developed by Microsoft after its predecessor Windows Mobile. It was launched towards
the end of 2010. A new interface was introduced with this OS the Metro. Additionally, the software is
integrated with third party services and Microsoft services, and sets minimum requirements for the
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

8. hardware on which it runs. The OS follows licensing model of Windows Mobile, but it less customizable
by the smartphone manufacturers. The phones with this OS have been made available recently.
BlackBerry OS
Proprietary Mobile OS developed by Research in Motion for the BlackBerry devices. The OS provides
multitasking and supports various features that have been incorporated by RIM into its devices like
touchscreen, trackwheel, trackpad and trackball. Earlier BlackBerry devices were popular as
smartphones for enterprises but lately it becoming popular among the youths as well. Third party
developers can write codes using the BlackBerry APIs.
Symbian
It’s a mobile OS and computing platform for smartphones and currently is maintained by Accenture.
Later on Symbian was released under a new license and converted to a proprietary model as opposed to
an open source platform. With the release of iPhone and Android smartphones, Symbian lost its market
share and Nokia decided to switch Symbian to Windows Phone 7. As a result of the migration Nokia and
Microsoft came with Nokia Lumia in 2011. Only time will tell, whether, this decision will get the Finnish
company that developed Symbian back in the market.
Mobile OS Market Share - Worldwide
(May 2011 - May 2012)
Android (21.83)
iOS (22.66)
Symbian (30.34)
BlackBerry (8.79)
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

9. Threat Analysis
With the technology evolving every minute, customers want new things and they are becoming very
price conscious as a result of which the rivalry in the US market is fierce. Every firm tries to beat their
competitor in their game; they try to be innovative so that they allure the customers. Presently the
biggest rivalry is between Apple and Samsung where Apple has also filed a law suit against Samsung on
the basis of design and functionalities to obtain patents. No particular firm in the market has a
significant amount of market power; every firm is vying for a greater piece of the pie. This has resulted
in driving down of smartphone prices and relative price parity for flagship smartphones from each major
firm. Firms are heavily involved in price discrimination, pricing their phones differently based on the sale
outlet. Smartphones sold through retailers are frequently cheaper than those sold through network
service providers.
Conclusion
The U.S. smartphone market is rapidly changing, with constant product introductions, quickly evolving
technology and designs, short product life cycles, aggressive pricing, rapid imitation of product and
technological advancements, a highly price sensitive consumers. The U.S. smartphone market consists of
all firms throughout the world that manufacture and sell smartphones to U.S. consumers. No one firm in
the market has sufficient market share to control prices, resulting is strong rivalry and competitive
pricing. The barriers to entry are high due to the existence of patents, high fixed costs and economies of
scale, regulation, and brand loyalty. The individual market participants engage in attempts at product
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore

10. differentiation, some being more successful than others. Intermarket effects are also significant in the
U.S. smartphone market. Multiple other markets have an effect on the U.S. smartphone market: from
the suppliers, to the industrial designers, to the distributors, to the retailers, to the network service
providers. Because of its rapid change, the U.S. smartphone market is likely to be significantly different
in as short a time as 1-5 years.
Source: Gartner, IDC, Canalys and Strategy Analytics, NDP Group, StatsCounter, Wikipedia, Nielsen,
ComScore