Apple to be smartphone king

Figures from Generator Research suggest that Apple will be the world's number one smartphone vendor by 2013, beating competitors like Nokia away from their long-held market dominance.

In its report, Generator said that Apple, which is a fairly recent entrant to the marketplace, was in a strong position to both dominate, and lead the industry because of its innovative design and features like the Apple App store.

"It is somewhat ironic that having come all this way, the mobile industry is now facing the prospect of ceding large segments of its market to outsiders who have the competencies and assets to use the building blocks that have been delivered by the mobile industry and set the mobile services market alight." it said. "From a starting position as a rank outsider, Apple is already beginning to have a transformational impact on the mobile industry."

In its first year of availability, the iPhone built up a five per cent market share of all worldwide smartphone shipments, while competitor Nokia held 40 per cent. Generator Research predicted that within five years "the tables will have turned and Nokia's share will have fallen to 20 per cent". It suggested a number of reasons for this change.

Apple's ability to combine good hardware with software, which Generator called its core competence, is one factor that the analysts said other firms would seek to ape. Another is the Apple App store, which offers complimentary applications for the smartphone often for free or at a very low cost.

Such a service, the authors said, would be difficult for other firms to copy. The feature is also important to the firm because "the result is that Apple has found a way to get existing smartphone users to spend more".

However, the researchers suggested that Apple should move away from 'cool' applications, and should mature the type of applications and content that are made available. It recommended that Apple releases software tools to increase development.

"Apple would be interested in this because a richer API would allow developers to make App Store applications more interesting to users. More sophisticated applications would also command a higher price, which would also make Apple's developer programme more interesting to operators."

Although Apple may have to implement some changes and mature both its technology and the use of that technology, Generator believes that the firm can do this, and will cement its position as a pioneer in mobile communications.

"Apple's embryonic mobile platform is so significant that we think it will transform today's mobile services market to a similar extent to how NTT DoCoMo of Japan transformed the mobile market in November 1999 by launching i-mode, which showed to the world what the concept of mobile internet' really meant," it said.