Predicting 2010 North American Smartphone Market Share

|
 |  Includes: AAPL, BBRY, GOOG, MSFT, PALM
by: Joel West

As a powerful member of the blogosphere, I got an interesting emailed press release Wednesday predicting the 2010 “North American” smartphone market share:

2009 Share 2010 Share
BlackBerry 23.2M 49.2% 28.0M 43.0%
iPhone 10.9M 23.1% 13.8M 21.3%
Android 4.6M 9.7% 12.3M 18.9%
Microsoft 4.8M 10.2% 4.7M 7.2%
Palm 1.4M 3.0% 3.1M 4.7%
Symbian 1.5M 3.2% 2.1M 3.3%
Others 0.8M 1.7% 1.0M 1.6%
Total 47.2M 100.0% 65.1M 100.0%
Click to enlarge
The forecast is by Canalys, the London-based mobile phone consultancy. Of course, as for other mobile phone market share estimates, it’s for new sales rather than installed base.

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.