iPhone Storms Smartphone OS Market

Apple's iPhone still hasn't sold enough hardware units to rise out of Gartner's "others" category, but the mobile operating system now has 2.8 percent worldwide market share in the smartphone OS category. That puts iPhone OS ahead of Palm OS.

The data is for the second quarter, where, according to Gartner, Apple shipped 892,503 copies of Mac OS X on mobiles; I refer to it as iPhone OS. That compares to 270,000 copies in second quarter 2007. It's worth noting that iPhone only had two days of sales in second quarter 2007.

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Gartner's numbers are, surprisingly, higher than Apple's. For second calendar quarter, Apple said it shipped 717,000 iPhones. There should be a one-to-one correlation between hardware and software.

But Apple's 2.8 percent share may grossly understate where the iPhone OS is today. Second-quarter sales don't reflect Apple smartphone operating system shipments after release of iPhone 3G. Gartner's data and a little soothsaying gives some insight into how much Apple could storm the smartphone OS market in third quarter.

During the first two quarters, smartphone OS shipments were fairly constant for many manufacturers. For example, Nokia's Symbian shipped 18.4 million in both quarters for the same market share. Windows Mobile stayed fairly constant, too. Palm OS had modest gains. Major exceptions: RIM and Linux, which had gains and losses, respectively. Sequentially, RIM OS shipments rose to 5.9 million from 4.3 million, with its share rising four points to 17.4 percent.

Based on the first half data, I'll make these assumptions for third quarter—and this is educated guesswork for ranking Apple:

• Symbian: 18.4 million
• RIM, 7 million
• Windows Mobile, 3 million
• Linux, 1.5 million
• Palm OS, 700,000

I'm assuming RIM will continue its growth spurt and that Apple will mostly pick up share from mobile users moving to smartphones. Apple has already revealed that it sold 1 million iPhones during the 3G model's first weekend of sales. So there are 1 million iPhone OS shipments guaranteed. Financial analyst predictions vary from about 4.4 million to 6 million iPhones will be sold during the third quarter. The lower-end prediction, if correct, would put iPhone OS well ahead of Windows Mobile. Such a circumstance would be a major blow to Microsoft and major marketing coup for Apple.

What if I'm wrong about RIM? Suppose the company only shipped 6 million BlackBerrys during the quarter and Apple did the same? The point: Apple is tracking for at least third and conceivably second ranking in smartphone OS shipments during third quarter.

Another quarter of sales, with iPhone distribution approaching the planned 70 countries, and Apple's mobile OS could even rival Symbian. For smartphones. The category is one of the smallest for which Nokia ships mobiles. Nokia shipped about 120 million handsets during second quarter, according to Gartner. Therefore, more broadly, Symbian is safe from iPhone OS encroachment. But the smartphone market is Apple's to storm.

[Please send your tips or rumors to watchtips at live.com].

Posted by Joe Wilcox on September 11, 2008 5:45 PM