According to the latest IDC numbers, Android took a whopping 79.3% share of smartphones shipped in the second quarter with iOS managing 13.2%. Common wisdom holds that third place is the critical spot — carriers want a strong alternative to keep the top two platforms from gaining too much power. Drop below third place, though, and the future is bleak with shelf space and visibility becoming much tougher to pull off.
Microsoft’s (MSFT) Windows Phone has officially wrested that coveted third place spot from BlackBerry (BBRY), which has now dropped below 3% market share. However, the battle for third may turn into a three-way fight. It’s possible that Windows and BlackBerry could be facing a challenge from another alternative — Firefox OS.
But wait, isn’t Firefox a web browser?
Yes it is. Firefox the web browser is a free, open-source product developed and maintained by Mozilla, a nonprofit organization. Firefox started at zero marketshare in 2002 (when it was released as “Firebird”) to challenge Microsoft’s Internet Explorer, which commanded nearly 94% of global web browsing traffic at the time. Firefox’s web browser now holds more than 20% market share, despite competition from Google’s Chrome and Apple’s Safari web browsers.
When Mozilla made the decision to release a Firefox mobile operating system for smartphones — Firefox OS — the news was a blip on the radar in North America, at least outside of the software development community. However, it’s entirely possible that Firefox OS might just show up on that next IDC report thanks to a confluence of factors.
First, mobile carriers are tiring of paying costly subsidies to carry the latest Android smartphones and iPhones. Ending the Android/iOS stranglehold is held up as a key way to lower smartphone prices and break that pattern.
Second, in emerging markets, a mobile platform that eschews a closed-app ecosystem (like Google Play and Apple’s App Store) for an open, web-based one has appeal for a customer base not yet invested in those proprietary apps. Firefox OS leverages its use of open standards like HTML 5 to offer users web apps that can be used even on competing platforms by running the Firefox browser.
With Western smartphone markets maturing, the biggest potential gains in market share are found in these emerging markets. That’s why Apple is scrambling to be competitive in China, and why BlackBerry points to Latin America as a core market.
With smartphone penetration at just 16%, Latin America is a perfect spot for Firefox OS to establish a beach head. And that’s what is happening, thanks to Spain’s Telefonica (TEF) which is launching Firefox phones in Colombia, Venezuela and Brazil. Besides the Latin America launches, Telefonica is already selling Firefox OS smartphones in Spain. Deutsche Telecom (DTEGY) began selling them in Poland in July, announcing that the devices will be available in Germany, Hungary and Greece this fall.
Firefox OS devices are also being released by some of the top smartphone manufacturers, including surging companies like ZTE, LG and Huwaei. ZTE’s smartphone shipments were up 79% on the year this quarter, and the Chinese manufacturer captured 4th place worldwide according to Strategy Analytics.
While it’s big on Android devices, ZTE’s collaboration with Intel (INTC), support for Firefox OS and heavyweight presence in emerging markets has the potential to chip away at both the ARM (ARMH) and Android domination of smartphones.
As pointed out by the Wall Street Journal, becoming a viable third platform requires not just the support of smartphone manufacturers and carriers, but also developers — an area where Microsoft and BlackBerry have struggled.
The fact that Firefox OS seems to have strong developer support is yet another factor that should concern Microsoft and BlackBerry. Mozilla’s open-source approach helped push the Firefox web browser to being a developer favorite and the Firefox OS — with its embrace of open web standards — is also being talked up in that community.
In addition, Mozilla has committed to the “most aggressive” mobile OS release schedule, promising quarterly features updates. And while Google says “Don’t be evil,” Mozilla’s credo is: “Doing good is part of our code.” In many ways, the open-source approach of Firefox OS is delivering on many of the promises that Google made to developers about Android that have fallen by the wayside.
It’s going to take a while before we know for certain whether Firefox OS has legs (it’s not even slated to hit the U.S. market until 2014). But with the big push beginning this summer and support from smartphone makers like ZTE, it’s conceivable that Firefox OS will officially hit the charts and not be rolled into the woeful “other” category.
From there, it’s not a huge leap to imagine single digit marketshare — a development that would slam Microsoft and likely be the death knell (if it hasn’t not already sounded) for BlackBerry’s BB10.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.