The mobile phone market is up big for the first quarter of 2010 after sales declines during 2009, according to the latest sales figures released by market research firm Gartner. Smartphones are also growing faster each quarter as they continue to replace feature phones for many users. No surprise that the iPhone and Android-based phones saw the biggest gains, as the two platforms were the only two in the top five to gain market share year-over-year.

Worldwide, mobile phone vendors sold 314.7 million phones—smart and otherwise—in the first quarter, a 16.9 percent increase from the first quarter of 2009. Nokia, Samsung, and LG continue to grab most of the market with little year-over-year change, while numerous other vendors battle for small parts of the remainder. However, the importance of smartphones can be seen in the overall mobile market. Big market share drops for Sony Ericsson and Motorola allowed BlackBerry maker RIM to move into fourth place globally, making RIM the first smartphone-only vendor to crack the top five.

Data source: Gartner

Apple has moved up to seventh place overall, more than doubling first quarter shipments from 2009 to grab 2.7 percent of the mobile phone market. “Growth came partly from new communication service providers in established markets, such as the UK, and stronger sales in new markets such as China and South Korea,” said Carolina Milanesi, research vice president at Gartner, in a statement. 

Global smartphone sales grew even more than last quarter, with 54.3 million units sold for a 48.7 percent year-over-year increase. Smartphones now represent 17.3 percent of all mobile phone sales, up from 13.6 percent in first of quarter last year.

Symbian still commands a large, though continually eroding, market share among smartphone platforms, shedding another 4.5 points of share. BlackBerry is holding strong at number two, losing about one point year-over year. With little innovation in its current incarnation, Windows Mobile also shed a few points as well. WebOS’s poor showing left it lumped in the “other” category with other niche platforms.

Data source: Gartner

The big winners are, as is becoming commonplace, iPhone OS and Android. iPhone OS market share improved considerably year-over-year, with its 112 percent unit growth enough to move it up to 15.4 percent among smartphones globally. However, a staggering 806 percent unit growth pushed Android well ahead of Windows Mobile into fourth place. Both iPhone OS and Android are poised to catch up to the BlackBerry platform in short order. Apple will have its work cut out for it to stay ahead of Android globally, even as the open source mobile platform has by some accounts surpassed iPhone OS-based smartphones domestically.

“To compete in such a crowded market, manufacturers need to tightly integrate hardware, user interface, and cloud and social networking services if their solutions are to appeal to users,” Roberta Cozza, principal research analyst at Gartner, said in a statement. “Just adding a QWERTY keyboard will not make a device fit the communication habits of today’s various consumer segments.”

However, Cozza said, “mobile OS ecosystems are developing and will move beyond smartphones to continue to deliver consumer value and a rich user experience.” Apple strengthened its iPhone OS platform by using it to power its iPod touch and iPad mobile devices. Android runs a few similar devices, mostly e-book readers, but it has yet to make a big move into the tablet or PMP space. However, Android will also face competition with Chrome OS in the tablet market. HP announced that it will definitely expand the webOS platform into the tablet space after its acquisition of Palm, but the desktop PC market leader has its work cut out for it.

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Google’s Android mobile OS is showing slow growth in Western Europe since its launch, according to analysts.

Noted analyst firm IDC has stated that while Android’s market share has grown in this region, from 4.2 per cent to 5.4 per cent in the July- September period, consumers are still shying away.

“Consumers steer clear of Google’s OS and sell-out is below everyone’s expectations. Consumers recognize the Google brand, but still do not understand what Android is,” IDC analyst Francisco Jeronimo.

Lack of awareness

“The lack of devices available didn’t help to raise awareness, though this is expected to change, with more handsets from LG, Samsung, Sony Ericsson, Motorola, and other vendors hitting the market soon.”

It’s worth noting that Android is still pretty nascent compared to other operating systems – it’s barely a year from release, and in relative terms, a 1.2 per cent increase in three months can be interpreted in a number of ways.

However, the number of ‘headline’ handsets has been minimal, with the Hero the main phone consumers will be familiar with. Android is still also early in the development stage, meaning elements consumers take for granted in other phones, such as full Bluetooth support, aren’t added until later in the development cycle.

Symbian – the operating system used for years by Nokia in its smartphones and more recently in Samsung and Sony Ericsson models – has 48 per cent of the market in Western Europe, but many predict this to decline as other competitors raise their game.

Windows Mobile is still the mainstay of the business market too, and although the iPhone and Android handsets are growing, it will take a larger range of more compelling devices to properly take on the established players and move Android from ‘Geek Chic’ to a genuine contender.

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Microsoft has informed some of its partners that it has had to delay Windows Mobile 7, a much anticipated update to its cell phone operating system.

Although Microsoft has not publicly said when to expect Windows Mobile 7, partners who had expected to have a final release in their hands by early next year have been told now that it won’t be ready until the second half of next year, sources told CNET News.

The delay is a significant blow for the software maker, which has been counting on the next version of Windows Mobile to enable devices that better rival Apple’s iPhone. Among the features widely expected to be part of the release is advanced gesture recognition, perhaps along the lines of the iPhone, but possibly also using the camera as a means for reading gestures. Microsoft’s Tellme unit, which focuses on speech input, has also been working on Windows Mobile 7 features.

The delay also comes amid stepped-up competition. Google is preparing Tuesday to launch the first phone running its Android operating system, while Apple has its updated iPhone 3G, and new models are also debuting from BlackBerry maker Research In Motion.

Microsoft, for its part, declined to comment on its plans. In an interview, group product manager Scott Rockfeld noted that CEO Steve Ballmer and mobile unit head Andy Lees did meet with 17 of the company’s largest cell phone maker and carrier partners.

“They all expressed their excitement of what we are doing in the short term and the long term,” Rockfeld said.

Microsoft is not expected to have a major update to its core operating system ahead of Windows Mobile 7. However, other improvements are expected to debut sooner, most notably an improved browser that brings the rendering engine of Internet Explorer 6 onto Windows Mobile. That update, still expected this year, should pave the way for Windows Mobile phones to display rich Web pages, including those that are home to Flash content and Ajax applications.

In addition, a number of carriers and handset makers have been working with Microsoft to add new touch interfaces and other features, separate from Microsoft’s operating system updates. The T-Mobile Shadow was one of the first devices to benefit from such work, while more recent products from HTC also have their own custom interfaces above and beyond those included in the most recent version of Windows Mobile.

“Customers don’t have to sit back and wait,” Rockfeld said. “There’s tons of stuff coming from us and our partners.”

Rockfeld also tried to make the case that Microsoft’s business model is friendlier to hardware makers and cell phone carriers than those of rivals, including Google.

“The thing that they are trying to do is they are trying to own the services,” Rockfeld said, saying that is a move that has plenty of carriers worried. “They don’t want to sit there and just become a dumb pipe.”

Microsoft, he said, is willing to work with carriers to power their own services. “We’re happy sharing the limelight,” he said.

As for Windows Mobile 7, Microsoft has said very little publicly. Ballmer did make reference to it in a speech to enthusiasts in April.

During the speech, he talked about how Windows Mobile would outsell Apple and RIM during 2008. He then added: “And I think that certainly this should be a good year for us for sales, but the work we’re doing on Windows Mobile 7, which is the next major release of Windows Mobile, not just in the Windows Mobile team, but across Windows Mobile, in Silverlight, the development platform, the e-mail, the back-end, I think you’ll continue to see that as an area of major excitement and innovation for the company as we move forward.”

Source: CNET