There are three combatants and they have fought each other to a standstill. There is war between them, but even as it intensifies, no force gains ground. As the saying goes, something’s got to give.
This is an overdramatic portrait of the smartphone market in the United States, but it’s no less true for its bombast. According to Nielsen’s and their April market share report, Google (NASDAQ: GOOG), Apple (NASDAQ: AAPL), and Research in Motion (NASDAQ: RIMM) have held onto more or less the exact same portions of the U.S. smartphone market that they did in January. Google Android phones make up 36% of the market, iPhones make up 26% and BlackBerry phones account for 23% of the market.
The rest of the smartphone market is broken up between the bit players; Hewlett-Packard (NASDAQ: HPQ) and its Palm gadgets along with Nokia (NYSE: NOK) phones make up 5% of the market total. Microsoft (NASDAQ: MSFT) holds onto 10% , but only 1% of that total comes from the newer Windows Phone 7 operating system, the rest being older Windows Mobile devices.
What’s surprising is that there has been no dramatic shift in power amongst the three major players after major new product releases. Apple released its Verizon (NYSE: VZ) ready iPhone in February and HTC released the 4G-compatible, Android-equipped Thunderbolt in March. No phone changed the market though. Google’s dramatic climb has halted, while Apple and RIMM’s declines have halted, too. People are buying smartphones, but no one stock is benefitting more than the others.
So what will break the stalemate? And when?
Even though the Verizon iPhone didn’t turn the tide quite like investors and analysts expected it to, provider diversification could still be the secret to Apple’s success. Analyst Peter Misek of Jeffries predicted on May 16 that the iPhone will be available on Sprint (NYSE: S) and T-Mobile USA’s networks in September. Even though those telecoms command just a fraction of the subscriber base as AT&T (NYSE: T) and Verizon, the added consumer access would definitely allow Apple to make gains on the Android market.
Given other rumors, particularly a Tuesday report out of Japan that Apple will deliver an iPhone compatible with all major carriers in August, it’s looking increasingly likely that Apple will indeed get that boost.
Google and Research in Motion are facing a surprisingly similar problem: Both need to find a way to reignite consumer interest. RIMM would have almost certainly seen bigger declines in BlackBerry market share this year if the company’s phones hadn’t found a niche as an affordable smartphone alternative to the Apple iPhone.
And the pause in Android growth in 2011 signifies that Google needs more than an exciting new device from its manufacturing partners like Motorola (NYSE: MMI). Google needs to start finding a way to build its identity as a content provider with its app and media stores in the way that Apple has become identified with its iTunes and App Store outlets.
The dark horse right now is the Microsoft and Nokia’s partnership. While Nokia is in particularly bad shape right now, the right combination of a sexy new gadget and canny marketing could make the company’s first round of Windows Phone 7 handhelds a major success in the next six months. If that happens, all three major combatants in the U.S. smartphone war will see their pieces of the pie become significantly smaller.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
