The maturing smartphone market is fragmenting into four categories: business and three consumer segments including performance, midrange and entry-level.
Riding a wave of market expansion in emerging countries, where smartphones are not subsidized by operators, the midrange and entry-level categories will grow the fastest over the next five years; they are jointly forecast to grow from 33 percent of the smartphone market in 2009 to 44 percent by the end of 2014. In unit shipment terms, that accounts for a 31 percent CAGR, from 56 million units in 2009 to 219 million during the same period.
Among the five major operating system players, RIM and Windows Mobile are primarily business focused, while Apple and Android compete in the high-end consumer segment. Windows Mobile also plays on the consumer side but is clearly moving upstream, leaving the fastest-growing consumer segmentsthe midrange and entry levelalmost exclusively to Symbian.
Mobile Linux also has a small play in the entry-level consumer segment but remains highly fragmented.
The recent move by Symbian to become open-source will drive Linux users towards the operating system.
Symbian's long-term prospects are clearly tied to Nokia, which remains committed to the OS.
With the increasing competition at the high end, Symbian will no doubt lose market share in this segment, but it will post strong growth in the midrange (sub-$350 retail) and entry-level (sub-$200) categories. Here's why.
Symbian is a lean, well-optimized OS with low minimum hardware requirements. In an entry-level, small-screen, 2.5G single-tasking device, the Symbian OS can run on an ARM9 processor at 200 MHz with 32 Mbytes of RAM and 20 Mbytes of ROM. Android, in contrast, requires much higher processor speeds (ARM11 at 528 MHz, moving toward ARM's Cortex-A8 at 600 MHz and Scorpion at 1 GHz in v2.0), with 256 Mbytes each of RAM and ROM.
Nokia, the dominant Symbian OEM, has strong brand equity in several fast-developing regions, including the Asia-Pacific (where it accounted for 49 percent of the 2009 smartphone market), China (66 percent), India (60 percent), Latin America (57 percent), Middle-East/Africa (75 percent) and Eastern Europe (55 percent), where the OEM is not only the leading smartphone vendor but also the leading supplier of cell phones. As they trade up to smartphones, Nokia cell phone users in these regions will tend to stick with the Nokia brand and its wide selection of smartphones at lower prices.
As a successful producer of low-cost cell phones, Nokia, with its deep engineering expertise (chip design, hardware design, OS, applications), diverse supply chain, strong distribution and Ovi services strategy, is in a unique position to deliver the right combination of price, performance and features in Symbian devices appropriate to the midrange and entry-level segments.
Marvell's PXA2xx/3xx and Texas Instruments' OMAP 850/1710 applications processors running Windows Mobile 6.1 Standard (or earlier versions) are the only other mature platforms that can compete with Symbian at the low end. Windows Mobile 5.0 is a viable entry-level solution; WM 6.0 and 6.1 are suitable for the midrange category. With significantly higher hardware requirements for the current WM 6.5 (and even higher for the upcoming WM 7), which renders all pre-2009 hardware incompatible, Microsoft is clearly shifting its focus to the high-end consumer and business categories. Mainstream support for WM 5.0 will cease in October, and WM 6.0 support will likely be retired next year.
2.5G technology (GPRS/EDGE) remains popular in the price-sensitive segment, and Nokia, with Symbian, is one of only a few major OEMs that continue to introduce 2.5G smartphone models. HTC/Dopod is another one, which supports WM 5.0 and WM 6.0, but it faces the aforementioned support retirement risk.
Future Symbian versions from Nokia is the only likely candidate for bringing much-sought-after full-screen multitouch capability to the midrange category.
Huawai, a proven low-cost supplier has announced plans for shipping Symbian smartpohnes for the low-end market. ZTE, another leading low-cost producer and member of Symbian Foundation, is expected to follow suit.
Meanwhile, Symbian is not standing still in the performance segment. The upcoming Symbian^3 adds demand paged virtual memory along with significantly improved support for hardware acceleration of video and graphics as part of Symbian's next-generation graphics architecture, which will include HD video recording and playback. Multitouch capability will also debut in this version.
Symbian^4, which is expected well before yearend, promises an all-new user interface as well as support for near-field communications. Symbian^5, scheduled for next year, is expected to support multicore processors, such as ARM'sCortex-A9 MPCore, along with additional improvements in graphics and video. NTT Docomo's version of Symbian, with its own MOAP(S) mobile-oriented applications platform user interface, also runs in several high-end smartphones.
Overall, the Symbian OS is forecast to grow at a 21 percent compound annual rate through 2014, to reach 190 million units that year. It will register a loss in market share over the period, slipping from 43 percent last year to 38 percent in 2014. The most aggressive drop will come between this year and 2011, however; after that, its share is forecast to remain fairly flat.
Satish Menon is a senior industry analyst, specializing in mobile devices, with Forward Concepts