How Android swallowed the UK smartphone market in 18 months

Figures from Kantar ComTech show how dramatically Android has risen to prominence - but what does that mean for rival contenders such as Nokia, Apple and RIM?

In just 18 months, Android has come from nowhere to become the mobile OS powering just under half of all smartphones sold in the UK – and half the people owning a mobile phone in the UK have a smartphone.
In the process it has bested Nokia's Symbian (since declared dead, though still stumbling to its grave), RIM's BlackBerry OS (which is fighting back) and Apple's iPhone (which, given its comparatively high price until the latest cuts to the iPhone 3GS and iPhone 4, was never likely to dominate long-term).
It's an amazing run for Android which is likely to carry on into 2012, since it's taken four years to reach this point (longer if you count Nokia's, RIM's and Microsoft's offerings from 2005/6 as smartphones) but the number of smartphones being sold is accelerating.
What these figures don't show you is that the entire market is growing; Kantar ComTech WorldPanel, which provides the statistics, declined to give absolute sales figures (they want to have something to tempt clients to buy the full reports). A minor note: these figures go up to 2 October, just before the iPhone 4S launch; expect that Apple's share will recover slightly. Even so, Android is just going to keep growing.
It's very likely that in the next two years you'll see smartphones reach something like 90% penetration in the UK - if only because fewer shops and carriers will be selling feature phones, for two reasons: (a) they make less money selling them in the first place (b) carriers get less money from phones that don't have data plans.
Android is almost certain to sweep the board here: it could hit up to 70% market share in one or two years (remember, market share is "share of handsets being sold", not "share of handsets in peoples' hands"). That's because Android handsets from cheaper manufacturers such as China's Huawei and ZTE will come in at the bottom of the market (it's noticeable how the "Other" segment has fallen to zero in the past year). Pretty soon you're going to be able to get a smartphone for almost nothing in your local supermarket. And you can already get really cheap PAYG data options from Three or GiffGaff.
For the record, I think it's great that smartphones are becoming pervasive. Putting the internet in everyone's hands, wherever they are? (If only the mobile carriers would stop holding up the 4G auction.) That's got to be a really good thing.
Does it matter, though, whether the pervasive OS is Android, or what share this or that OS has, beyond the willy-waving horse race that some people love to indulge in? Here's Henry Blodget over at BusinessInsider, who slams on the CAPS LOCK to pronounce ATTENTION APPLE FANS: Samsung Blowing Past Apple To Become The Biggest Smartphone Vendor Is Not Good News". (By which he means not good news for Apple. Though by implication, it would also be Not Good News for RIM and Nokia either.)
Blodget's take:

As the history of the tech industry has demonstrated again and again, technology platform markets tend to standardize around a single dominant platform. Although several different platforms can co-exist while a market is developing, eventually a clear leader emerges. And as it does, the leader's power and "network effects" grow, while the leverage of the smaller platforms diminishes.

In the case of Android, this growing power will not lead to enormous profits for Google, because, right now anyway, Google is not selling Android. (Instead, Google is building a "moat" around its wildly profitable search business and making it easier for people to use Google search from their phones. This may change when Google acquires Motorola and starts selling integrated handsets itself.)

But the better Android phones get, and the more market share Android gains, the more Android's network effects will increase, and the more Apple's leverage over the iPhone ecosystem will diminish. And that can only be bad news for Apple's ability to continue to command exploding profits from iPhones, app developers, musicians, media companies, and others who now must pay it big distribution fees because they have no other choice.
Similarly, the bigger other global handset manufacturers get relative to Apple, the less (relative) leverage Apple will have over partners in the global parts-and-manufacturing supply chains.

There's three things there. Let's take the last one first: supply chains. Apple didn't do badly in 2007 when it was an entrant to the mobile phone supply chain, and it's got enough money in the bank that it can guarantee supplies any time it likes. (That's what it uses its cash reserves outside the US to do: buy up future outputs from various factories.) Most smartphone manufacturers don't have much scale; that's unlikely to change. Samsung is likely to get bigger (though it would be helpful if it would be more forthcoming about how many phones and how many tablets it has pushed out the door). That won't stop Apple making phones, though. And by proxy, it won't stop RIM or Nokia making phones - Nokia is still the world's largest in handset volume. Only mismanagement can mess that up.
Now to the first point, about "the history of the tech industry". Actually, the history of the tech industry is a wide and varied thing, which doesn't show any clear lessons about dominant platforms. Yes, you do get dominant platforms, but that doesn't prevent other players existing within niches and making good money from it. Cite 1: Apple, making nice money, thanks, from the PC market. Cite 2: Microsoft, making nice money, thanks, from the server OS market, despite Linux being the most-used. The leverage of Apple and Microsoft in those respective spaces is helped by the existence of standards, and it's those - plus the internet - which make the "platform" idea less powerful on smartphones.
Think of it like this: if the PC market had started when the internet was already pervasive, then operating systems would have had to have internet standards built in; that would have forced more interoperability. It was the threat that Netscape might force interoperability on all computing platforms that scared the bejeezus out of Microsoft in the 1990s. So smartphones, which are arriving when the internet is pervasive, will live by different standards.
Horace Dediu, who runs the consultancy Asymco, puts it like this: imagine a world where 5 billion people have a smartphone. In that case, a 10% share translates to 500 million users. Even a 1% share is 50 million. If you couldn't make a profit from 50 million users, you probably shouldn't be in the business at all.
And just a side note on that "wildly profitable" Google search from their phones. All the web stats, and Google's own stats, indicate that - for now anyway - about two-thirds or more of mobile web browsing and searching is mostly done by iOS users (iPhone, iPod Touch, iPad). In some places it's much higher. Now, past performance is not necessarily a guide to the future (you only have to look at the graph to see that). But you have to ask too: what exactly is the "network effect" that Blodget thinks Google will get from Android? People writing apps? They already do; but it hasn't dented the bigger platforms.
The interesting challenge will be for Nokia and RIM, which have to establish themselves at the higher end of the market as everything shifts to smartphones. But in a growing market, the only problem is how to supply enough people. Android's a whopping success. But that doesn't shut anyone out - yet.

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Microsoft says Google Android is 'standing on our shoulders'

 Senior lawyers warns that litigation is natural outcome of intense competition in fast-growing field – but that Google is taking advantage of others' efforts

One of Microsoft's most senior lawyers has accused Google's Android software of "standing on the shoulders" of companies such as his own in the smartphone wars, and that the flurry of patent lawsuits going on between companies involved in the field is only natural in a rapidly developing field.
In an interview with the San Francisco Chronicle, Horacio Gutierrez, the deputy general counsel for Microsoft, says that patent protections are necessary to give companies the incentive to spend millions of dollars and years of effort on new products.
He says that software patents are necessary, because so much focus has shifted from hardware to software: "The question of whether software should be patentable is, in a sense, the same as asking whether a significant part of the technological innovation happening nowadays should receive patent protection."
Gutierrez argues that Microsoft developed and has patented really critical features including "the ability to synchronise the content that you have in your phone with the information in the server of your company or in your computer at home". He adds that there are plenty of others: "Features that just make the phone much more efficient, things that are deeply embedded in the operating system." He argues that modern smartphones are a fully-fledged computer with a sophisticated, modern operating system.
The complaint means that Google and its Android handset partners have a growing number of companies ranged against them as patent litigation has intensified over the past 18 months.
Apple is suing a number of Android partners, notably including Samsung and HTC, while Microsoft has extracted per-handset licence payments from HTC and Samsung, as well as similar Android-related payments from companies as diverse as Wistron, General Dynamics, Acer, Viewsonic, Itronix and Onkyo. By some calculations, Microsoft is getting more revenue from patent-related payments from Android than from its own Windows Phone operating system.
Google bought the Android handset maker Motorola Mobility in August , apparently to acquire its long-standing patent pool relating to mobile phones, after failing to acquire a patent pool from the bankruptcy sale of the Canadian company Nortel, which went to a consortium including Microsoft, RIM and Apple.
Gutierrez says the suggestion that certain features (such as an indication of how far a page has loaded) may seem obvious to people who don't understand how systems have to be built: "Many times when you express those ideas at a high level, they seem obvious to anyone who really doesn't understand the particular ways in which certain effects are achieved in software. It's not just one feature, but a whole series of features in a phone or another mobile device that really make up the whole experience of the user."
Gutierrez rebutted the suggestion in an interview with James Temple of the San Francisco Chronicle that the software giant has a campaign against Android. "Every time there are these technologies that are really disruptive, there are patent cases. People who lived in that particular time would look and say, 'What a mess, we certainly must live in the worst time from an [intellectual property] perspective. The system is broken and something has to be done to fix it,'" he said. "That's the situation we're in right now. If you think of a mobile phone or a tablet computer today, they're not your father's or your grandfather's cell phone."
He adds that different pathways to achieve the same ends would be independently patentable – which would imply that if a company can show that it uses a different method from the patented one to achieve an effect, it would have an absolute defence against a patent infringement suit.
In June, Microsoft lost a key software patent case which it had taken all the way to the Supreme Court, after it was sued by the Canadian company i4i over certain features of earlier versions of Office.
Google is facing a lawsuit from the database giant Oracle, which in 2009 bought Sun Microsystems and the rights to its Java code, over allegations that Android doesn't comply with the licence for Java.
Google's chief lawyer complained in July that software patents are "gumming up innovation"
The interview with Gutierrez is in two parts, here and here.

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Mango shows Microsoft still has the taste for smartphone success

The only worry is that Microsoft has delivered this lovely Windows operating system a little too late

Steve Jobs famously criticised Microsoft for having no taste and no culture. Windows Phone 7.5, the latest version of Microsoft's operating system for mobile phones, is a revolutionary product for its parent company because it has both in spades. The worry is that Microsoft has delivered this lovely creation a little too late.
As a piece of visual design, the operating system also known as Mango makes the iPhone's bubble-inspired home screen graphics look tired and out of date. The style is pared back, letting the content, drawn in from the myriad of online sources that now figure in our daily lives, do the talking. Applications each inhabit a simple red square, or "live tile" on a black screen. When customised they earn their name and truly come to life, which is where the culture comes in.
The level to which a select group of the best social media platforms – Facebook, Twitter, LinkedIn – have been woven into the functions on Mango goes well beyond what was available on its predecessor (Windows Phone 7), and arguably well beyond what Apple's iPhone and Google's Android can offer.
Punch in your Facebook and Twitter coordinates, and the software merges them with your address book to create a profile for each contact, with their latest photos, status updates and tweets. Pin that person's tile to your home screen, and each update feeds into the little square.
The most recent photos taken on your phone are also displayed in their own double sized tile. And the home screen can, unlike many other operating systems, display multiple tiles from a single application – one for each item you are bidding for on Ebay, or the weather in a handful of cities.
The messaging has caught up with iPhone. A conversation that might begin on Facebook chat but then moves to text messaging or Windows Live Messenger – the Microsoft instant messaging service – now appears on screen in a single thread.
Where the operating system does fail to impress is with voice recognition. Mango incorporates it, for example to compose an email. But "Want you meet camera" is not a very usable approximation of "Want to meet tomorrow".
Voice commands are not just a diverting new trick. They are the future for smartphones. Using virtual keypads on a tiny touch screen is life sapping, and impossible to do while walking. But the trusty buttons of a qwerty keyboard are just not sexy enough to be added to the iPhone. So Apple is doing its level best to get us using Siri, its own voice service, which has surprised users with its accuracy. Microsoft has some catching up to do here.
And it will make every effort to catch up. The software behemoth is not just fighting for a nice sideline, it is fighting for control of the mass market computer. As mobile connected devices become cleverer and are touched by millions more fingers than have ever typed on a PC keyboard, the importance of the laptop or desktop computer will fade and with it Microsoft's influence.
There is a long battle ahead. Research firm IDC says Windows operating systems were on just 2% of phones sold worldwide in the first half of this year, down from 13% in 2008. Back then, Android's share was 0%. In three years it has become the best seller, with 42%. BlackBerry is still significant, and Apple's iOS is at 19%.
The first Nokia handsets to use Windows will be unveiled in London next week. Nokia still sells more "feature" phones than anyone else, but it sold just 15% of smartphones in the summer, down from 33% in 2010. Its decision to abandon Symbian left it unable to compete for most of this year. The alliance with Microsoft is clearly make or break, and their target as they attempt to rise up the ranks will be Android.
Research In Motion, maker of BlackBerry, will continue to chase its corporate market. Apple will remain the premium brand for now. Which will leave Microsoft and Google slugging it out for dominance of the cheaper, mass market handsets.
Where Google may have the edge is control over handset design. It is buying Motorola, possibly just for the patents needed to protect Android against litigation, or possibly to create better phones. Nokia and Microsoft are merely in an alliance, but they have size, marketing firepower, relationships with networks and experience on their side. Nokia won its battle for dominance of the mass market against Motorola at the end of the 1990s, and still sells more basic feature phones than anyone else. Microsoft knows a lot more about selling operating systems than Google, albeit on PCs. Its creator may be a fading force, but Mango shows Microsoft still has the taste for success.

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Samsung Nexus Prime to get UK launch 'within weeks'

Device will show off 'Ice Cream Sandwich' OS in launch by company now reckoned to be world's biggest handset vendor (updated)

Samsung and Google are to launch the Nexus Prime phone to showcase the latest version of the Android mobile operating system, "Ice Cream Sandwich", in Hong Kong late on Tuesday night.
The phone is expected to be released in the UK within the next four weeks, in time for Christmas.
The launch had been scheduled for Monday last week, but Google and Samsung postponed it following the death of Steve Jobs, Apple's co-founder and former chief executive.
As a flagship device, the phone will run the standard version of the new Android update, rather than having Samsung's G-Wiz Touch-Wiz system running on top of it. Engadget suggests that it will have a high-definition display, dual-core 1.5GHz processor and a screen size of up to 4.6in.
Like the Nexus S, the Samsung device which showcased Android 2.3 "Gingerbread", the previous major phone version, there won't be physical buttons for key on-screen functions.
Samsung and Apple are neck and neck, having both supplanted Finland's Nokia to ship more than 20m smartphone handsets per quarter in the three months to June. Analysts are still waiting for third-quarter figures from Samsung; Apple will announce figures at its quarterly results on Tuesday night.
Samsung is expected to have supplanted Nokia as the largest mobile company in terms of handset shipments when it finalises its third-quarter results through its sales of "feature phones" which don't have third-party app capabilities.
The Google chief executive, Larry Page, said at the company's earnings call last week that 190m Android devices have been activated since its inception. He also said that the mobile business was on an equivalent run rate to being a $2.5bn business.
However, he did not specify how much of that comes through mobile advertising and app sales on Android; testimony given by a Google executive to the US Congress that two-thirds of mobile search comes from devices running Apple's iOS software.
Ice Cream Sandwich, which is version 4.0 of Android, is intended to be a cross-platform offering that unites the 2.0 branch, devised for mobile phones, and the 3.0 branch for tablets which was first released earlier this year on Motorola's showcase Xoom tablet. That should mean that app developers can target all sizes of screen in a single package.
Samsung's UK press office did not have any information about the timing of the launch or any other details at the time of publication.
Update: Android Central says it has the specifications. Notable points include 1GB of RAM, Bluetooth 3.0, and the following:
• Display: AMOLED HD: 4.65 inches Resolution 720 x1280) Maximum number of simultaneous colors
• Main Display: 16,777,216 color touch screen: capacitive (multi-touch),
• Main camera: 5 megapixel CMOS camera with LED flash
• Video recording 1080pHD (1920 * 1080)
• Front camera: 1.3 million pixels CMOS
• GPS
• NFC
• Micro USB 2.0
For the full list, see the site.

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Android on PlayBook: RIM fumbles the pass to developers

Android implementation on QNX-based tablet will cut off huge numbers of potential apps from running on it. In which case, why should Android developers bother targeting it?

Wednesday was not a good day for RIM and its PlayBook.
For some time, developers have been awaiting with a degree of modest interest to learn more about the Android support on the device. When announced, it appeared that RIM would get around the problem that no one was fussed about writing native apps for the QNX operating system the PlayBook runs on by allowing Android apps to run on the device.
Wouldn't that be the best of both worlds? The device might start to get some traction by having Android support. As we've known since Microsoft first trounced Apple in the personal computer market back in the DOS days, it's the ecosystem, stupid. Without developers having any interest in building native apps for QNX, much as there'd been little interest in writing apps for native BlackBerry OS, it's unlikely anyone would seek out and buy a PlayBook device – a point which has been backed up with its poor sales and massive backlog.

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