While Apple has had plenty of good news lately, many other competing handset manufacturers and operating systems are coming on strong. Who has the best chance to be No. 1?

Global handset shipments reached 327 million units worldwide in the third quarter of this year, rising from 291 million units a year earlier, according to Strategy Analytics, and annual growth came in at 13 percent, compared with a rate of 16 percent during the first six months of 2010. Some brands overachieved, such as Apple, while others underperformed, such as LG and Nokia.

?Apple has reinvented the ecosystem by giving power back to the consumers, developers and companies that can continually innovate,? said Jeff Judge, cofounder/CEO of Signal, Chicago.

Apple
Apple shipped 14.1 million handsets worldwide in the third quarter of this year, up a huge 91 percent annually, per Strategy Analytics.

Apple was a star performer, as it surged past Research In Motion and Sony Ericsson and jumped into the top five handset rankings for the first time.

Apple's growth continues to come from expanding its retail presence across dozens of countries and carriers worldwide.

A next major wave of expansion is likely to come from a CDMA version of the iPhone at Verizon Wireless in the U.S., a move that could put considerable competitive pressure on Samsung, LG and Motorola in the first half of 2011 (see story).

The success of its mobile devices from the iPod touch and the iPhone to the iPad has made Apple the most valuable technology company on the NYSE and it will soon become the most valuable company in the world, surpassing Exxon/Mobil on the S&P 500 (see story).

?Apple deserves significant credit for driving consumer demand for a more powerful mobile computing experience,? said Tim Grace, product director at Signal, Chicago. ?Prior to the iPhone, smartphones were largely viewed as complicated, expensive devices that were the domain of the business user or technophile.

?As they did with the iPod and the mp3 player market, Apple?s blend of skillful design and ability to create resonate messages to consumers about the benefit of the iPhone interface and app marketplace certainly defined a category,? he said.

As a result, consumers? appetite for richer mobile experiences has skyrocketed, which has benefitted marketers tremendously.

Agencies and brands looking for deeper ways to engage customers can now leverage more robust mobile Web experiences, value-added native applications and tighter targeting of content and advertising via location-based technologies.

?While other mobile device and OS developers have evolved to compete very closely with Apple on these fronts, Apple?s impact since the 2007 release of the first-generation iPhone is unmatched in shaping consumer preferences and accelerating marketers? interest in mobile,? Mr. Grace said.

That said, the smartphone space remains a highly competitive one, and that is unlikely to change any time soon.

Google?s Android
Devices built upon Google?s Android operating system may be the biggest threat to Apple, as Motorola?s Droid lineup and smartphones from Samsung and HTC target similar demographics.

In addition, the simple fact that Android devices are available on multiple handset manufacturers and many more carriers than the iPhone gives Google?s OS a significant advantage.

?Android and Apple are the top two players, and while Apple wins in the innovation department, Android has a good chance of winning based on its accessibility,? said Vishal Gurbuxani, cofounder of Mobclix, San Francisco. ?The open source platform and device proliferation allows them to reach a broader user base.?

Bolstered by its new Android devices, Samsung shipped 71 million handsets worldwide during the third quarter of 2010, rising a slightly above-average 19 percent from 60.2 million units a year earlier, according to Strategy Analytics.

Samsung?s global marketshare reached 22 percent in the third quarter of this year, inching up from 21 percent in third-quarter 2009.

The handset manufacturer continues to edge ahead of LG (9 percent) and it is just 12 points behind Nokia (34 percent), the closest it has ever been.

Samsung continued to grow volumes at a slightly above-average rate due to healthy demand for its expanding portfolio of Android smartphones such as the Galaxy S.

The device-maker commenced its smartphone onslaught with the Galaxy S in the third quarter and a tablet onslaught with the Galaxy Tab will began in the fourth quarter.

Nielsen recently reported that the growth rate of Android has surpassed the other players.

Apple recognizes this and in order to keep up with Google, it is starting to relax its regulations a bit, per Mr. Gurbuxani.

While reach is a plus, fragmentation is the biggest problem with Android.

There are many different devices, and developers are having issues figuring out what features and screen resolution they need to design their application ? the user experience is not unified.

?Carriers and handset manufacturers are allowed to skin and customize the OS as they see fit, which is going to cause consumer confusion in the marketplace today,? Mr. Gurbuxani said. ?The Open App Market also causes consumer confusion, as you are now confronted with multiple stores to buy similar applications.?

Research In Motion?s BlackBerry
Research In Motion shipped 12.4 million handsets worldwide in the third quarter of 2010, up 46 percent annually, according to Strategy Analytics.

RIM's global handset marketshare has doubled from 2 percent in third-quarter 2008 to 4 percent in the third quarter of this year, as its distribution networks have internationalized beyond North America into Europe, Africa, Asia and South America.

RIM's biggest challenge still lies in its relatively weak touchscreen portfolio for consumer users, a gap that the new Torch model has so far struggled to fill.

?Their niche is the business market, but recently they haven?t been doing much to keep up with the other players,? Mr. Gurbuxani said. ?With the smartphone market becoming so mainstream, BlackBerry needs to make some big moves to appeal beyond the business market.

?BlackBerry has huge issues with backwards compatibility,? he said. ?BlackBerry version 6 is on par with new smartphone operating systems, but versions 3 and 4 are what the bulk of consumers use.

?The company still needs to work on its overall user experience to compete with [Microsoft?s] Windows Phone 7, [Apple?s] iOS and Android.?

Nokia
Nokia shipped 110.4 million handsets worldwide in the third quarter of 2010, growing just 2 percent annually, according to Strategy Analytics.

This was the ninth-consecutive quarter that Nokia has grown volumes below the market average.

Strategy Analytics estimates that Nokia?s global share of legitimate handset shipments dipped to 34 percent during the quarter, compared with 37 percent a year earlier.

A slowdown in its mass-market 2G volumes, exacerbated by component shortages, was a key cause of the decline.

Nokia's global handset average selling price edged up 2 percent on an annual basis to Euros 64, the first time it has risen in at least a decade.

The increased ASP was driven by record smartphone shipments of 26 million units and weaker entry-level volumes caused by component shortages, which tilted the overall product-mix toward higher-priced phones.

Component constraints aside, much of Nokia?s growth during the fourth quarter will depend on the success of its four high-profile new models, the N8, C7, C6-01 and E7.

The N8, C7 and C6-01 will be attacking Sony Ericsson, LG and Samsung, while the E7 will set its sights on RIM, HTC and others.

?The Symbian OS has a huge worldwide presence but has yet to take off in the U.S. market,? Mr. Gurbuxani said. ?The complicated interface and features have been proven difficult for the average user.

?Although it is the largest share overall worldwide, it will quickly fall out of this battle if ease of use doesn?t improve,? he said. ?They are supporting two OS's right now and just launched Qt, their attempt to unify Symbian and MeeGo.

?Unfortunately, though, they have a lot of catching up [to do] to be a contender.?

Microsoft?s Windows Phone 7
Microsoft made a big splash in its attempt to make a comeback in the smartphone business, with coordinated events worldwide touting Windows Phone 7. But will the operating system make a big enough dent to matter to marketers? (see story).

The reviews thus far have been positive.

Microsoft has designed the Windows Phone 7 interface to be different from the top two players?Android and Apple.

?Their goal is to provide the user an easy way to get access to many aspects of their life,? Mr. Gurbuxani said. ?Rather than going with the typical app symbol theme, they are using tiles that can be bucketed to better meet the need of users.

?There is definitely potential for them to grab some market share since there?s a lot of buzz around them as the newest player,? he said. ?It will also be interesting to see how the tie-in to XBox Live will continue to evolve.?

The go-to market strategy for Windows Phone 7 is critical.

?Their current SDK, while impressive, is still not on par with the iOS so they have a lot of catching up to do,? Mr. Gurbuxani said.

?In terms of device reach, Windows Phone 7 needs to nail it for consumers in terms of pricing and device penetration, and so far only a GSM version of WP7 has been announced this year,? he said.

HP?s Palm
Palm is looked at as the rival to Windows Phone 7 as the two operating systems compete to be the next big thing in the smartphone arena.

HP recently announced the most significant update to Palm?s webOS since the platform was released in 2009, which is also the first new product HP has launched since purchasing the company.

The new webOS 2.0 will be available in the U.S. through Verizon Wireless in the coming months and will run on the new Palm Pre 2 device.

?Multiple reviews have said the device isn?t much of a departure from the Palm Pre,? Mr. Gurbuxani said. ?The question is how will they continue to innovate to keep up with the other players?

?Now that Palm is HP, we are all waiting to see how Palm can leverage HP with device penetration and with updates to their OS,? he said.

Final Take
Dan Butcher, associate editor, Mobile Marketer

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