Analyst: Mobile users are 'content' with Android and iOS duopoly


Nokia's (NYSE:NOK) disappointing second-quarter financial results indicate that consumers are "content" with a mobile ecosystem dominated by Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS, according to an investor note released by Needham & Company Analyst Charlie Wolf.

Wolf downgraded Nokia's stock rating from a "buy" to a "hold" after the manufacturer failed to match analyst expectations during the previous quarter. He said that limited consumer interest in Nokia Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone 8 is a sign that users are "content with just two platforms," blaming Nokia's struggles on a smaller app library, ineffective marketing and the company's previous loyalty to the "antiquated" Symbian operating system. (Nokia is halting shipments of Symbian phones this summer.)

Vendors shipped 7 million Windows Phone units worldwide during the first quarter of 2013, up 133 percent from 3 million during the first three months of 2012 and increasing the platform's global market share from 2 percent to 3.2 percent, research firm IDC reported in May. While Windows Phone shipments now outpace BlackBerry (NASDAQ:BBRY), which fell to 6.3 million during the first quarter from 9.7 million during the year-ago period, both operating systems trail far behind Android and iOS, which combined to power 92.3 percent of all smartphone shipments during the first three months of this year.

"It appears that the market is reaching the now-or-never moment for the Windows [Phone] 8/Nokia duo," Wolf wrote. "We expect Microsoft to throw enormous resources behind Windows [Phone] 8 to prevent its demise. But with a single digit market share, the challenge will be enormous."

Nokia shipped 7.4 million smartphones in the second quarter, almost all of which were Lumia devices, up 32 percent from the first quarter but missing the 8.1 million units that analysts had expected, according to a Reuters poll. Nokia shipped 500,000 devices in the North American market, down from 600,000 devices in the year-ago quarter but up slightly from the 400,000 the manufacturer shipped in the first quarter of this year.

Nokia's North American sales figures are notable considering Nokia has made a concerted push to increase sales and exposure in the U.S. market, specifically through new Lumia devices available through AT&T Mobility (NYSE:T), T-Mobile US (NYSE:TMUS), Verizon Wireless (NYSE:VZ) and others. "Despite completely new Windows phone line and support from new partners, Nokia's US smartphone vol dropped YoY. It is over," tweeted industry observer Tero Kuittinen.

For more:
- read this AppleInsider article

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