There was plenty of news to report from the mobile industry during the first quarter of 2011, though no story was bigger than AT&T’s agreement to acquire T-Mobile USA in a deal that would alter the mobile landscape in some dramatic ways. The takeover would result in a remarkably stratified market with one uber-carrier (AT&T (s t)/T-Mobile, with as many as 130 million subscribers), a clear-cut No. 2 (Verizon Wireless (s vz) with 101 million) and a very distant No. 3 (Sprint (s s) with 50 million). The proposed tie-up will endure a thorough examination from federal regulators who are likely to demand substantial concessions from AT&T for regualtory approval – if it’s allowed at all.
The tablet industry continued to take flight in early 2011, with Apple’s (s aapl) dominance loosening slightly thanks to the emergence of Samsung’s Galaxy Tab, a late-2010 model, and the arrival of Motorola’s Xoom (s mmi) slate. Apple’s market share fell from 93 percent to 73 percent during the fourth quarter, according to IDC, while the Galaxy Tab garnered a 17 percent share. Cupertino looked to cement its lead in the space, though, with the hugely successfully launch of the iPad 2 in March.
Meanwhile, Android (s goog) built on its incredible momentum in recent months, with comScore reporting that one in every three smartphones sold in the U.S. from November 2010 to February 2011 runs Google’s mobile operating system. While Apple’s iOS held the line at roughly 25 percent, Android’s continued growth once again was costly for Research In Motion’s (s rimm) BlackBerry OS, whose market share slid by 4.6 percent. But Android also experienced its share of growing pains during the first quarter. Not only was the platform again the victim of a malware attack, developers appear to be increasingly concerned about fragmentation. Baird polled 250 developers and found that 87 percent of respondents viewed Android fragmentation as at least “somewhat of a problem,” and nearly one-fourth said it was a “huge problem.” Google has begun to address the issue by limiting early access to the newest versions of Android to manufacturers and carriers whose plans for the OS gain Google’s approval.
Meanwhile, the hype surrounding Near Field Communication (NFC) continued to grow thanks to the technology’s potential to power mobile payments and wireless marketing campaigns. In just the last three months, we’ve seen:
- Research In Motion vow to include NFC in “many if not all” BlackBerry devices coming to market this year.
- Announcements of separate NFC-based mobile payment initiatives in Salt Lake City and at the 2012 Olympics in London.
- Sprint unveil an effort to bring a mobile payment system to market ahead of the Isis initiative, which is backed by all three of its tier-one competitors.
- Reports of Amazon, (s amzn) Apple and Google all pursuing their own NFC-based mobile payment trials and initiatives.
Juniper Research predicts that 20 percent of all smartphones will be NFC-enabled by 2014, so the groundwork is being laid for a potentially huge industry. But the prospects for NFC may hinge on it being used by merchants for mobile marketing before consumers embrace it as a platform for mobile payments.
Of course, the first quarter saw other major stories as well as the continuation of some important trends in mobile. Nokia (s nok) and Microsoft (s msft) announced a huge deal that will see the Finnish manufacturer adopt Windows Phone as its primary mobile operating system, effectively leaving Symbian in the rear-view. Verizon Wireless appears to have a hit in its HTC ThunderBolt, which is the first handset to support the carrier’s new lightning-fast LTE network. And Amazon opened its own Android storefront, providing a high-profile alternative to Google’s Android Market.
Of course, there is plenty to look forward to in the mobile industry over the next several months, including the launch of Amazon’s Android app store, and a rush of new tablets. To read more about those developments, and for further analysis of the first quarter, read my latest report on GigaOM Pro (subscription required).