Android is in its death throes! Well, this may be overstating a bit, but I do believe that the Smartphone OS landscape will be very different in four years - and that Android OS, by Google (NASDAQ:GOOG), will be the loser. My basic thesis is that Windows Phone 8 (WP8) from Microsoft (NASDAQ:MSFT) and BlackBerry 10 from Research In Motion (RIMM) will take massive market share from Android (see Part 1 and Part 2 for the basic rationale).
Today, Nokia (NYSE:NOK) preannounced figures for Q4 2012.
I. Nokia Is Dead!
In Part 3: The Numbers, I provided a list of market share distributions up to 2016.
While many readers agreed with me to one degree or another, and others were diehard Windows fans, there were some who predicted doom for WP8 in general, or even Nokia specifically.
Android will never lose any market share to Windows or to Blackberry. In fact by 2016, it is extremely unlikely that Windows or Blackberry will still be around ... certainly not as mobile operating systems of any significance.
Windows is going to continue to crater into oblivion.
No. Blackberry is dead. Windows on phones will have minimum market share, and only sell on price. Write off Nokia, Sony, and most high cost, dying consumer brands. Game over.
II. Nokia Lives!
The most important part of the Nokia preannouncement, for this discussion, is that it sold over 4.4 million Lumia phones in the quarter. These are Windows phones, with older models running Windows Mobile 7 and newer models running the new Windows Mobile 8.
Additionally, Nokia sold a total of 15.9 million smartphones, including Asha and Symbian models. So if these models/price points were to transition to WP8, then that would become a significant addition to the WP8 market share.
III. Meanwhile, Apple...
Meanwhile, Apple (NASDAQ:AAPL) charges on with calendar Q4 estimates for iPhone sales ranging from 43 million to 63 million units. (See here for details.) Additionally, it has recently moved to the No. 1 position in the U.S. according to Kantar World Panel, with 53% of that market.
It should be noted that Nokia is not the only OEM selling WP8 phones. HTC and Samsung also have models in the market, among others. Of course, WP8 is still new and relatively untested. It will take time for people to evaluate it and to see if any major glitches come up.
That said, this first indication is that WP8 phones are doing better than had been expected. If these early adopters turn out to be pleased with the product, then I think we can look forward to further sales and expanding market share.
However, since the iPhone is also doing well, it seems to me that most of these new sales will be at the expense of Android, as I predicted.
"Android Is Dead?" Series Posts:
In Part 1: Why? I put out my thesis and basic arguments.
In Part 2: Titans Clash, I note corroborating analysis from a Goldman Sachs report titled "Clash of the Titans."
In Part 3: The Numbers, I proposed a 2016 market share scenario, complete with numbers, in which Android had lost significantly to Windows Phone 8 and BlackBerry 10.
In Part 4: New Contender Windows Phone 8, I discuss the new Windows Phone 8 operating system, and a couple of particular devices.
In Part 5: Number of Players, I addressed criticism that four was too many players in the market.
In a future article, I will do an analysis similar to Part 4 for Research In Motion's BlackBerry 10 OS.
Disclosure: I am long AAPL. I may open long/short options positions in AAPL or NOK in the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.