Nokia faces struggle to claw back market share

Nokia is suffering from an exodus of developers to rival platforms

Nokia faces an uphill battle to halt a decline in market share as Apple, RIM and Google steal its margins, according to a senior mobile analyst.

Speaking at the Open Mobile Summit in London, Richard Windsor of Nomura Securities said that Nokia faces a period of difficulty caused in large part by the migration of developers from its Symbian platform to other devices and operating systems.

"Nokia will hope that its Symbian^4 operating system, scheduled for a 2011 release, can help encourage developers back to its eco-system. However, looking at the reaction on Symbian^3 does not give much encouragement that this will be the case," he said.

"Symbian used to be the first platform a developer would code for, but now hardly any developers say that are coding for this as they see more opportunities with Apple and Android, while the Ovi Store needs a lot of work as well."

Windsor also warned that Google's Android could run into difficulties if it becomes fragmented owing to pressure from handset manufactures to offer differentiated services to consumers.

"Fragmentation of Android could help Nokia by freeing up market space, but if this doesn't happen Google will remain strong. OEMs will want to offer different levels of service with Android, though, so it's a risk Google needs to consider, " he said.

Apple remains the only company making genuine progress in the smartphone market, according to Windsor, as it ships one tenth as many devices as Nokia yet generates far more revenue.

Underlining the power of the iPhone, Windsor added that AT&T could face huge problems in the US if the estimated 20 per cent of iPhone customers move to Verizon because of its supposedly superior coverage.

However, Windsor said that the future of the smartphone market remain buoyant, and that the devices are expected to represent 59 per cent of all mobile phone sales by 2014, up from 39 per cent this year.