ABI Research predicts that the leading smartphone operating system, Symbian, will ship on almost a quarter of all handsets by 2009. Though Symbian is by far the most popular platform for smartphones, these types of devices only account for about 2% of the mobile handset market.

So, according to ABI Research, 98% of mobile phones leverage proprietary operating systems. That leaves, for example, Symbian, Microsoft with Windows Mobile, PalmSource with the Palm OS and Linux to fight over a small portion of the total handset market. The total number of smartphones shipped with these operating systems accounted for about 10 million units.

In comparison to the smartphone market, worldwide mobile phone sales totaled 520 million units, a 20.5% increase from 2002 sales, according to report released by Gartner last month.

Though many cellular carriers would like to control the OS in handsets, handset manufacturers still largely govern the market for handset operating systems. In the longer term, the problem with both carrier optimized OSs and proprietary OSs is they deliver less functionality. Users will ultimately drive demand for Smartphones because of better functionality for such things as larger screen size, improved menu navigation and a broad platform on which you can more easily add applications to enhance the user experiences. These capabilities are all limited under carrier-specific or proprietary OSs.

ABI Research said among the critical success factors for Symbian to date has been the reluctance of carriers and handset vendors alike to use Microsoft's Windows Mobile for fear that Microsoft would come to dominate cell phones as it did the PCs. In fact, this was the whole reason a consortium of mobile phone vendors, including Nokia and Sony Ericsson, established Symbian as a private company back in 1998.

However, with Nokia, the market leader in handsets seeking to gain controlling interest in Symbian, will handset vendors not begin to see Symbian as a threat? Given the relationship between Nokia and Symbian, it is no surprise that Motorola, Nokia's largest competitor, has chosen to pull out of Symbian as a shareholder.

Market Share

According to Gartner, Nokia continued to lead the worldwide mobile phone industry, and it became the market leader in North America. However, on a worldwide basis, it suffered a decline in market share, dropping to 34.7% in 2003 from 35.1% in 2002.

Motorola's market share declined in the fourth quarter of 2003. However, rising sales this quarter of new products could result in a resurgence in Motorola's market share in 2004. Despite success late in the year, Motorola lost the leadership position in the home market in North America.