Microsoft lagging five years behind Apple

Microsoft has been predicted to ship almost as many smartphones in 2017 as Apple will ship by the end of this year.

That is according to research company Analysys Mason, who says that although Windows Phone will become the fastest-growing OS during the period, it will only have a single-digit share of the smartphone market in five years.

Despite Windows shipments expected to grow from 11 million units in 2011 to 136 million units by 2017, Mason forecasts Windows smartphones will account for only 9% of the world’s smartphone shipments at that time, compared to Apple’s 23% and Android’s 58%.

“Having a third significant OS player like Windows in the smartphone market would benefit mobile operators because it would reduce Apple’s and Google’s control over the market,” says Ronan de Renesse, author of the report.

“It would also encourage subscribers to move from one OS to another, as well as improve operators’ negotiating position in smartphone retail.”

The report also predicts smartphone upgrades will drive three out of every four smartphone purchases by 2017, where today it is currently less than half.

“This will create a significant strategy shift for stakeholders," de Renesse says.

"Operators will have to increase the value of smartphone contracts by offering early handset upgrades and larger data allowances to retain customers, and handset vendors will have to develop stronger app and content ecosystems (as Apple has done) in order to increase loyalty.”

Mason says smartphone connections will grow nearly threefold to reach 3.4 billion by 2017, with shipments rising from 700 million this year (41.2% share of total handset shipments) to 1.37 billion during five years (70% share of total handset shipments).

The rate of growth in the rate of new smartphone connections will significantly decline however, from 39% in 2011, to 29% in 2012 with further decline (20%) expected next year.

Vendor shipments:

The report suggests handset vendors’ share of smartphone shipments will be "volatile" in the next 5 years, as it has been previously (Nokia and Research In Motion (RIM) were among the top handset vendors as recently as 2011).

Vendors with their own content and multi-device ecosystems such as Apple, Samsung and Sony Mobile or those with a strong presence in emerging markets such as Huawei and ZTE will maintain or increase their market share at the expense of others.

Mason says chinese manufacturers Huawei and ZTE will have a combined market share of 22.2% of smartphone shipments in 2017, up from 7% in 2011.

“Value rather than volume has become a priority for top smartphone vendors," de Renesse says.

"It results in an overcrowded high-end smartphone segment with huge marketing budgets.

"Keeping up the pace set by Apple and Samsung will be tough and other manufacturers will require a lot of ingenuity, which we are starting to see."