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iPhone to become Blighty's favourite smartphone

Sales to bloom with end of O2 exclusivity

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Canalys Mobility Forum Apple's iPhone could become Britain's best-selling smartphone, market watcher Canalys has claimed - and it's all due to the end of O2's exclusive on the handset.

Speaking at the Canalys Mobility Forum in London yesterday, analyst Pete Cunningham revealed that the iPhone was France's favourite smartphone in Q3 2009.

That, he said, arose because of the ending there of single-carrier sales. And with that now happening in the UK too - Orange has the 3GS and Vodafone will begin offering it early next year - we could see a big increase in iPhone ownership here too.

Exclusivity was a good idea in the early days of the iPhone, Cunningham said, but now it was "restriciting sales volumes". Punters want to buy the device but are not willing to switch operator to do so.

In Europe, the Middle East and Africa during Q3, Apple took 17 per cent of the smartphone market, second only to Nokia, which took 57.5 per cent. But Nokia's unit shipments were down 10.4 per cent year on on year - Apple's were up 22.5 per cent.

Third-placed Rim saw even better year-on-year growth: 100.1 per cent. But it accounted for just 12.3 per cent of the market during the quarter, Cunningham said.

HTC followed in fourth place with a 7.2 per cent share.

Smartphones accounted for 14.7 per cent of the overall EMEA phone market in Q3. However, smartphones drive data revenues, Cunningham said, and carriers need to tap into that to cover falling voice revenues. So expect them to push smartphones further into the mainstream.

Not that the iPhone is the only contender, and Cunningham highlighted Android's growth from zero market share in Q3 2008 to 4.4 per cent in Q3 2009.

But while there's clearly a buzz surrounding the Google OS, the need phone makers have to differentiate their offerings from rivals' will slow the OS' growth, Cunningham said. Differentiation typically centres on the UI vendors and carriers have placed on top of Android, and each of these UIs will require development time and money if they're to keep up with the evolution of the underlying OS.

Windows Mobile won't be a strong contender in the coming year, despite the recent release of version 6.5, Cunningham said. But he expects Windows Mobile 7, expected to appear at least a year from now, to bring Microsoft "back into the game".

Rim, meanwhile, appears to be focused on protecting its margins, so it's likely to continue to focus on the upper end of the smartphone sector rather than drive for greater volumes.

Symbian, by contrast, will go more mass-market, entering the mid-range 'feature phone' arena, Cunningham said, as Nokia rolls out Maemo Linux at the top end. As a result, Symbian will continue to dominate the EMEA smartphone market as a whole for some time to come.

All of which, gives Apple scope to grow its customer base, gaining market share into the bargain, and potentially becoming lead vendor in a number of territories.

But it will soon have to decide whether it wants to maintain its one-size-fits-all approach, or seek to boost sales and share but lower per-device revenues by rolling out different iPhones for different kinds of consumer. ®

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