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6/4/2013
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Windows Phone Primed To Surge, Canalys Says

Windows Phone platform will surge from 2.4% marketshare in 2012 to 12.7% in 2017, putting it right behind Apple's iOS platform, analyst firm Canalys predicts.

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Low-cost smartphones will have a significant impact on the market during the next few years, says analyst firm Canalys. Canalys believes smartphone makers will ship a staggering 1.5 billion devices in the year 2017, as the market grows at a compound annual growth rate of 18% between now and then. Google's Android platform will be responsible for the lion's share of those shipments, but there will be a surprising shift in the rest of the market, led by Microsoft's Windows Phone, Canalys says.

Last year, Google's hardware partners shipped approximately 470 million Android smartphones. Canalys says that number will hit 1 billion by 2017, giving Google a commanding 67% of the smartphone market worldwide, which is the same percentage it has now. Though the number of devices shipped will double, most of the growth is coming from first-time smartphone buyers converting from feature phones. Android may have a solid grip on the low end of the smartphone market right now, but that's going to change.

"The price of smartphones has fallen dramatically over the last few years and this has helped increase penetration," said Chris Jones, Canalys principal analyst. "As component prices continue to fall, vendors will be able to deliver great experiences on smartphones at low price points, which means that in many markets, feature phones will become extinct." By 2017, Canalys believes smartphones will represent 95% of all cellphone sales.

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One company that will benefit from the shift to low-cost devices is Nokia. Its Asha series of devices, which are billed as smart feature phones, will eventually go away in favor of low-cost devices using Microsoft's Windows Phone. By default, as Nokia benefits, so will Microsoft.

"The scalability of Microsoft's platform will be critical to its success and it has made progress here by enabling Huawei and Nokia to deliver Windows Phone products at aggressive price points," said Jessica Kwee, Canalys analyst. "Nokia is the most active vendor in the Microsoft camp and it continues to make steady progress with its Lumia portfolio. It has had some major carrier wins recently in the two largest markets of China and the U.S., which will help it build momentum in the short term."

This is part of the reason why Canalys expects the Windows Phone platform to surge from its 2.4% marketshare in 2012 to 12.7% in 2017. It will be right behind Apple's iOS platform, standing as the number three smartphone platform. A five-fold increase for Microsoft during a five-year period is a solid outlook, indeed.

Despite the smartphone market's overall growth, Apple's iOS platform will grow at a slower rate. The net effect will be that it loses marketshare. Canalys predicts that Apple's share will slip from 19.5% in 2012 to 14.1% in 2017. It will be just 1.4 percentage points ahead of Windows Phone.

"Apple's growth will be curtailed by the fact that momentum in the smartphone market is coming from the low end, and Apple is absent from this segment," said Kwee. "Android's continued dominance is due to the scalability of the platform." Toss in low-cost Windows Phones, and Apple may want to rethink its strategy of building only high-end devices.

But what of BlackBerry? BlackBerry managed to retain 4.8% of the smartphone market during 2012. Like Apple, shipments of BlackBerry devices will increase, but at a slower rate when compared to the market as a whole. Canalys thinks BlackBerry will still have about 4.6% of the market in 2017. In order to do that, however, BlackBerry needs to ditch its BlackBerry 7 handsets and get some entry-level BlackBerry 10 devices into its portfolio quickly.

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cgerber
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cgerber,
User Rank: Apprentice
6/5/2013 | 3:19:29 PM
re: Windows Phone Primed To Surge, Canalys Says
Windows Phone is great (I bought one on the release date and loved it), but can Microsoft continue to pour money into it with the hope that in 4-5 years it may be able to generate significant marketshare? Will it ever return profits on the total lifecycle of the operating system? Sure, in 2017 maybe they'll finally start to break even, but they've been pouring millions into it for 3-4 years now; will they ever see that money ever again?

I think the market needs more strong competition and Microsoft definitely has the history and talent to box with the rest of them. But, I'm not sure how long they're going to bet on the ability to capture the market.
liverdonor
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liverdonor,
User Rank: Apprentice
6/4/2013 | 7:34:17 PM
re: Windows Phone Primed To Surge, Canalys Says
Combine this with ARM's heavy push into the midmarket, there is a chance that the lower-end Nokia Lumia phones may use the brand-new A12 platform. Could happen.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
6/4/2013 | 7:32:09 PM
re: Windows Phone Primed To Surge, Canalys Says
The current Lumia offering is finally a viable Windows Smartphone but I think the cow has left the barn and Microsoft/Nokia are too late to the dance. Those that get a Windows Phone won't be disappointed (as in past Winphones) but not many iPhone or Android phone users will be switching anytime soon.
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