Apple and Samsung will account for more than half of the smartphone market through the second half of 2012, each taking a different approach to get there, according to forecasts from Canaccord Genuity.
By the end of the fourth quarter, Apple and Samsung are expected to combine for 52% of the smartphone market, a figure that will actually grow to 52.3% through 2013, according to the company. Among the other players, HTC is expected to gain market share at the expense of Research In Motion.
As the smartphone market awaits the much-anticipated iPhone 5, if that is what it will be called, Apple will stimulate sales of its more dated devices by introducing them to prepaid wireless network providers. Last month, Apple announced an agreement to bring the iPhone 4 and 4S to prepaid service provider Cricket Wireless. That was the first in a series of steps into the prepaid world for Apple, Canaccord Genuity managing director and communications technology analyst Michael Walkley says.
Apple has already completed deals to provide previous versions of the iPhone through Metro PCS and Virgin Mobile,Walkley says. "It's just a matter of when it gets announced," he adds.
One issue that may pose a challenge for Apple in this market is the upfront cost of a smartphone on a prepaid network. Unlike AT&T and Verizon Wireless, prepaid service providers do not subsidize the cost of the smartphone itself. Cricket Wireless, for example, will offer an 8GB iPhone 4 and 16GB 4S for $399 and $499, respectively. The 8GB iPhone 4 and 16GB 4S are available on Verizon's website for $99 and $199, respectively.
Regardless, Cricket Wireless, Virgin Mobile USA and MetroPCS combine to serve about 22.5 million customers, and depending on how they respond to sudden access to the iPhone, the deal could supplement Apple's growth as it prepares its next big product release.
"If they get guaranteed business like they did with Cricket, then it's good for their business model," Walkley says. "It's just unproven yet to see how they can do, but it certainly opens up a whole new realm of growth for Apple, and the fact that these prepaid channels are interested in getting the iPhone just speaks to the power of the Apple brand."
Samsung will satisfy the taste of those in the market for high-end smartphones in the meantime, Walkley says. In Europe, Canaccord saw more than 10 million preorders for Samsung's Galaxy S3, which will hit the U.S. on June 21. Combined with its existing presence of lower-priced smartphones in global markets, Samsung will continue to grow through the third quarter, Canaccord says.
HTC is positioned to grow in the shadow of Samsung and Apple, Walkley says. The HTC Evo LTE and One X models have experienced pent-up demand among Sprint and AT&T customers, Walkley says. Also, a patent dispute with Apple, which resulted in some HTC phones not being allowed to pass through U.S. customs, was cleared up.
The continued decline of Research In Motion will drive new customers to HTC, Walkley says, as will those who migrate away from Nokia or Motorola as they transition into their respective partnerships with Microsoft and Google.
While the hardware market seems as though it will be dominated by two powerhouses, the smartphone operating system market is showing signs of diversity, Walkley says. Microsoft's market share, with the release of Windows Phone 8, otherwise known as "Apollo," is predicted to grow from 5% in the third quarter of this year to 6.2% in the fourth, Canaccord says. Apple's iOS, as a result of the expected release of the iPhone 5 in October, is slated to grow from 14.1% share to 22.3% in the fourth quarter. These factors will combine to knock Android's smartphone OS share to 64.6% in the fourth quarter, down from 72% in the third.
However, the fluctuations in the smartphone OS market aren't expected to have a big impact on Samsung's overall numbers. Samsung accounts for more than 40% of all Android sales.
Colin Neagle covers emerging technologies, privacy and enterprise mobility for Network World. Follow him on Twitter @ntwrkwrldneagle and keep up with the Microsoft, Cisco and Open Source community blogs. Colin's email address firstname.lastname@example.org.
Read more about anti-malware in Network World's Anti-malware section.