As a powerful member of the blogosphere, I got an interesting emailed press release Wednesday predicting the 2010 “North American” smartphone market share:
To summarize their forecast: the market is growing rapidly at nearly 38%, but Android’s (NASDAQ:GOOG) sales and share will explode while RIM (RIMM) and Apple (NASDAQ:AAPL) will lag Android and the market. Android is expected to match the (current) BlackBerry numbers by 2013. (Other numbers are intriguing: For Palm (PALM), was 2009 awful or is the broader distribution of webOS going to save Palm? The “other” residual sets a cap on the share for LiMo, Bada and other misc. Linux versions.)
This is not the only prediction for rapid growth by Android in 2010. A Goldman Sach prediction for 2010 global share has BlackBerry and iPhone flat, while Android rises to 12%.
My question: how do you predict market share without knowing the handsets to go with it? Many (including me) predicted the Nexus One would be a great hit, but it (by one estimate) sold only 174,000 units in its first 10½ weeks — 1/6 the rate of a Droid or iPhone. Perhaps it’s because it was only T-Mobile (before AT&T (NYSE:T), Verizon (NYSE:VZ) and Sprint (NYSE:S)), or perhaps it’s the expensive unsubsidized price.
Still, like the AppleTV and Windows Vista, major companies do introduce products that turn out to be duds. To me, it seems like a 167% year-on-year growth — going from half the size of the iPhone to nearly the same — requires more than just a proliferation of models. It also relies on some big hits, like the Droid. And it probably relies on smartphones being sold without data plans, which I think is coming but not for another 2-3 years.
I can’t speak to share, but I think Android will do well to crack 10 million “North American” handsets this year. (How many of these in Canada? Obviously less than 10%).
Even at these levels, Android would pass iPhone here in 2011. But I’ll never again underestimate Steve Jobs’ ability to pull a rabbit out of the hat, so it’s conceivable that a 27% iPhone growth is low — particularly if the iPhone makes it beyond AT&T. If Steve doesn’t find that next rabbit, that would be bad for the AAPL growth multiple — its P/E is around 21, above HPQ & MSFT but behind INTC & GOOG.
Author's disclosure: None.