Gartner Predicts Mobile OS Market Share

Lots of people apparently think it’s a big deal that Gartner is predicting Android will surpass iOS for second place. But why is that necessarily a good thing, given that they’re predicting Symbian will remain in first place? Who thinks Symbian is actually doing well? Nokia’s board sure doesn’t.

via Daring Fireball Linked List: Gartner Predicts Mobile OS Market Share.

I also noted with amusement that by 2014 “other” is slated to sell 85 million units or nearly 10% share, up from 6.1% in 2009. These “others” will be selling more than twice what Apple is expected to sell this year. Is “other” WebOS, Bada, MeeGo, LiMO? If so they’re in for a healthy future.

But dwelling on details like these is missing the point. To see how improbable this prediction is, let’s go back to 2006 and ask what Gartner was forecasting would happen now.

First thing to note is that in 2006 Gartner was busy tracking PDA sales. You might wonder why this is relevant. The reason is because a significant proportion of RIM’s Blackberries counted as wireless PDAs and were therefore considered to compete with Palm’s Treos, HP’s iPaq and Dell’s famous Axim. Nokia was in the running with its Communicators. Here is how Gartner characterized the equivalent market in early 2006:

So I’ll just come out and say it: In 2006 Gartner did not have a clue what a smartphone was. By their admission:

Gartner defines a PDA as a data-centric handheld computer weighing less than one pound that is primarily designed for use with both hands. These devices use an open market operating system supported by third-party applications that can be added into the device by end users. They offer instant on/off capability and synchronization of files with a PC. A PDA may offer WAN support for voice, but these are data-first, voice-second devices.

In other words, in 2006 Gartner was splitting phones with operating systems into two separate markets: data-oriented wireless PDAs and voice-oriented smartphones. The split was mostly based on the judgement of the analyst on whether a device was “voice” or “data” oriented. I suppose they used the primary input method as a proxy: numeric keypads meant the device was one-handed and therefore voice-oriented. If the device had a full keyboard and/or a stylus-actuated touch screen then it was a two-handed data-oriented device. But even this proxy was not quite enough, sometimes devices were classified whimsically.

To make it more complicated, they bundled non-cellular but Wi-Fi enabled PDAs with wireless PDAs. This made some sense from a corporate IT point of view (their primary customer base) as these data-oriented devices would be used either on a LAN or a WAN (Wide Area Networks: what Gartner anachronistically called cellular networks.)

The presence or absence of a cellular radio did not enter into their view of these devices. So if you asked Gartner in 2006 to forecast smartphones (as we know them now) in 2010, I suppose you’d get what they forecast for “data-centric” devices.

So assuming that today’s smartphones are mostly “data-centric” we would have to look back on their view of that market and not the voice market which was seen as an entirely different thing. Their answer should have had something to do with the market leaders and participants in 2006. As the table above shows Gartner showed that RIM, Palm and HP led in 2005 with Nokia and T-Mobile[1] pulling up the rear.

However, from a platform point of view, at the beginning of 2006

Microsoft Windows CE was the No. 1 PDA operating system (OS) in 2005 as 7.05 million PDAs were loaded with the OS, up 33 percent from 2004 shipments of 5.28 million units. Palm OS PDA shipments declined 34 percent to 2.96 million units in 2005.

In late 2006, Gartner made further predictions for the year:

In 2006, Gartner expects the PDA market to increase by 6.3 percent to 16 million units. The market will continue to be driven by broader availability of cellular-enabled PDAs from wireless carriers. Gartner estimates that 53 percent of all PDAs shipped in the first half of 2006 featured integrated cellular capability, up from 46 percent during the same period in 2005. “The share of PDAs purchased by enterprises will continue to increase; it accounted for 49 percent of all PDA shipments in the second quarter of 2006 and Gartner expects that the enterprise market will account for 52 percent of all PDA shipments in 2006,” said Todd Kort.

At this time I have not yet dug up a Gartner “Wireless PDA OS” four year forecast from the year 2006 but I suspect it would not show devices running Google’s Android operating system or any running something called iOS.

I also seem to remember that they were suggesting that Windows would be the leading mobile platform. Although it was trailing in 2006, Gartner was quite bullish on the disruptive challenger from Redmond.

[1] T-mobile is in the list because it was common practice in 2006 for operators to market Pocket PC Phone Edition devices made by HTC under their own name. Orange, Vodafone and Verizon also had own-brand HTC Windows touch-based devices. Now what does that strategy remind me of?

  • MattF

    I don't get past the fact that Gartner makes predictions of 2014 device sales to seven significant figures. In point of fact, they'd be lucky to get accuracy of one significant figure– it's more likely that they'll get zero.

    • That's a valid point. False precision is self-evident without even looking at their track record.

  • David Chu

    It's hard enough for companies to forecast their own business 3 years out, why would you expect a company with less inside knowledge to do better?

    Still, just because you can't predict 3 years into the future doesn't mean you don't plan for it. Take the forecast for what it's worth.

    • I would say in this market a competitor has trouble forecasting one quarter ahead. To wit: Apple with all their insight into the whole integrated product and supply chain has been stumbling badly. They were far better predicting demand with the iPod.

      • Grwisher

        "To wit: Apple with all their insight into the whole integrated product and supply chain has been stumbling badly. "

        Stumbling all the way to the bank.

      • David Chu

        Lol. Awesome comments!

      • Sam Penrose

        "To wit: Apple with all their insight into the whole integrated product and supply chain has been stumbling badly. They were far better predicting demand with the iPod."

        If you oversupply, you overestimated. If you undersupply (as Apple has), either you underestimated or you simply couldn't scale fast enough. In turn, if you failed to scale fast enough, either you executed poorly, or you ran into constraints beyond your control. I don't think you have enough evidence to say that Apple "stumbled", as opposed to simply "succeeded as well as was possible."

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  • I guess one question begs – does anyone have a better prediction?

    If you are an investor in any one of these stocks, you should have a general idea as to where your player will be a few years out…I think one can make some general order of magnitude high probability bets by now…at least for Apple, Andoid, and possibly even Microsoft. Also, the overall market size can be estimated within some wide band…

    • Assume you make a prediction for one company. As the time frame expands the error rate compounds. In a market like this the error over four years will probably be on the order of 50% if you are really diligent. Now doing this for all competitors makes the complete market forecast completely undependable. My own prediction is that there will be 5 platforms and each will have equal share. I would not dare try to be more precise. My only real assumption is that the market will remain fragmented. Everything else is a coin flip.

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  • Steven Noyes

    I think you are pointing to a different issue all together. Most analysts make a poor assumption (and this is never stated) that if the players do not change, this is how will the market will unfold. They seldom look at what happens if technology changes and players change and in the tech industry, the players and products are seldom constant.

    Personally, I like what MS has done with WP7. For the first time in 15 years, they seem to have used their accumulated talent and actually thought about how to use a mobile device. Google looked at how people used mobile devices and came up with a Blackberry/WinMo clone. After the iPhone, they looked at it again and came up with an iPhone clone. Android, however, has little thought of originality behind it. It is "just" a copy in most respects. It has a great notifications system but it is also confusing to use much of the time.

    WP7 really is a different beast. I do not know if it will work/take off but I have many friends using Android ready to dump it on the first WP7 phones that ship.

    Again, I think analysts fail to look at "disruptive" competitors and make predictions on the assumption there is no company working on anything new.

    Life was so easy for them when all they had to say was "Buy MS and Windows. That will be $1,000,000 for the market research please." They have to actually think now and the analysts simply are not used to that.

    • I wrote an attack on Gartner not on Microsoft. My expectation is that WP7 will have a significant share (actually higher than what Gartner predicts). If it's half-functioning, WP7 will have their obligatory portfolio slots in both vendors and operator portfolios. The most likely casualty, as you point out, is Android as it's symmetric except for the price.

      • Steven Noyes

        My attack was on analysts like Gartner as well and was simply stating I think Gartner is underestimating WP7. They look at the current status quo and assume nothing will change and predict out 4 years. This is why they missed iPhone and Android. I think they are now neglecting WP7 and that WP7/Android purchasers are the same group IMO. WP7 will have minimal impact on iOS devices but could seriously slow the growth on Android.

        Especially if the carriers back it with 50% sales and free units like they did Android.

        So the question is, in my mind, where is the carriers love going to be? Right now, they are better off with a weakening Android and I think Gartner misses that concept.

      • The operators will act as they always have. They'll call the reps from the licensor vendors in and tell them they want n units with Android, m units with WP in x months. They'll also call RIM and order a bunch of blackberries. Job done.

  • Iphoned

    Does any one care to comment on Gartner's overall market size estimates? I think they projected around 850m smartphones market in 2015. That just feels like a bit optimistic given that overall handset sales now are around 1.2b..?

  • Vertti

    Gartner still thinks that Apple is a sitting duck where everybody can aim. They totally forget that Apple is more like a rabbidly moving target. Windows Mobile 7 sounds like fun, but it is already old when it arrives to market. Android sounds also much fun, but as a Apple stockholder I seriously don't but my mind in to the market share. Revenue share is the most important thing. That has to be good. Then if that is good (like 50% of the profits) then let's check the market share.

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