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Apple Joins Top Five Mobile Phone Vendors as Worldwide Market Grows Nearly 15%

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FRAMINGHAM, Mass.--(BUSINESS WIRE)--The worldwide mobile phone market grew

14.6% in the third quarter of 2010 (3Q10), the fourth consecutive quarter of

double-digit growth, driven in part by the fast-growing converged mobile device

category. According to the International Data Corporation (IDC) Worldwide

Quarterly Mobile Phone Tracker, vendors shipped 340.5 million units in 3Q10

compared to 297.1 million units in the third quarter of 2009.

Vendors that aren't developing a strong portfolio of smartphones will be

challenged to maintain and grow market share in the future.

The growing popularity of converged mobile devices, or smartphones, with

consumers and businesspersons is evidenced by the appearance of a second

smartphone-only vendor in the top 5 ranking. Apple moved into the number 4

position worldwide in 3Q10, joining Research In Motion (RIM) as one of the

world's largest mobile phone suppliers. RIM has spent three quarters on IDC's

leaderboard. Apple and RIM also posted the highest-growth rates among the top 5

vendors last quarter.

"The entrance of Apple to the top 5 vendor ranking underscores the increased

importance of smartphones to the overall market. Moreover, the mobile phone

makers that are delivering popular smartphone models are among the fastest

growing firms," said Kevin Restivo, senior research analyst with IDC's

Worldwide Mobile Phone Tracker. "Vendors that aren't developing a strong

portfolio of smartphones will be challenged to maintain and grow market share

in the future."

Apple, RIM, and the vendors producing Android-based smartphones have put

noticeable pressure on Nokia, the overall market leader. "Nokia still leads all

vendors by a significant margin for converged mobile devices and mobile phones

as a whole," said Ramon Llamas, senior research analyst with IDC's Mobile

Devices Technology and Trends team. "However, Nokia's grip on the traditional

mobile phone market has been somewhat loosened, as multiple Chinese vendors

have gained ground, especially within emerging markets. To bolster its overall

competitiveness, Nokia has been focused on improving its smartphone offerings."

Market Outlook

IDC believes the worldwide mobile phone market will be driven largely by

smartphone growth to the end of 2014. "The smartphone is becoming the focal

point of the personal communications experience," noted Restivo. "As a result,

new market growth will be increasingly generated by smartphones. This year, we

are expecting the smartphone sub-market to grow 55% year over year."

Regional Analysis

quarter to the detriment of market leader Nokia. In emerging markets, brands

such as Micromax, Nexian, and i-Mobile chipped away at Nokia's market share.

Android-powered smartphones also gained momentum across the region at the

expense of Nokia. Samsung gained ground in South Korea while Huawei, Lenovo,

and ZTE launched devices in several markets. In Japan, mobile phone market

growth was driven primarily by domestic vendors Sharp, Panasonic, Fujitsu, and

NEC.

smartphones, which grew thanks to the iPhone 4 and Android-powered devices from

HTC and Samsung. Demand was also stoked by large operator device subsidies that

helped to keep consumer interest in smartphones high. At the same time, the

CEMA handset market grew slowly in 3Q10. As a result, smartphone volumes are

growing substantially but still only comprise one-fifth of total shipments for

the regions combined. This is modest compared to more economically-developed

regions.

smartphone market. Grabbing headlines were the Apple iPhone 4, RIM's BlackBerry

Torch 9800, the HTC EVO 4G, and Motorola's new DROID X and DROID 2, all of

which were launched last quarter. Not to be overlooked was Samsung's Galaxy S

smartphone lineup, which were launched at all of the major carriers last

quarter. Traditional mobile phones, meanwhile, fought back with smartphone-like

functionality, but saw their overall share of the market continue to decline.

In Canada, Android-powered handsets gained momentum as Samsung, LG, Sony

Ericsson and Motorola shipped new models. Huawei and ASUS, low-cost providers

of Android devices, entered the market. RIM's BlackBerry Torch was announced

while the iPhone 4 was introduced to great fanfare.

region grew as a result of higher smartphone adoption. Vendors like Alcatel,

ZTE, and Huawei have targeted Latin America aggressively with entry-level

models in an effort to steal share from Nokia, the overall market leader in the

region. These models are lower-cost product offerings designed to meet the

needs of basic users. Motorola s Android-powered devices have also grown

quickly in the region due to the popularity of models like the QUENCH,

Backflip, and Milestone.

Top Five Mobile Phone Vendors

Nokia maintained the top spot in the overall mobile phone market despite

year-over-year unit shipment growth of less than 2% in new chief executive

Steven Elop's first quarter at the helm. The company grew converged mobile

device shipments 61% in 3Q10, but average selling prices for the device type

dropped to 136, compared to 190 in the same quarter last year. Nokia

attributed the plunge to price pressure from competitors and its stated desire

to reach more customers. Nokia hopes the C8 and C7 devices will boost ASPs in

future.

Samsung marked a new milestone during the third quarter, pushing through the 70

million unit mark for the first time in the company's history. In addition, the

company more than doubled the number of converged mobile device shipments from

the previous quarter. Driving this was the worldwide release of its Galaxy S

i9000 converged mobile device, as well as its bada-based Wave model. Looking

ahead to the fourth quarter, Samsung appears poised to bring more smartphones

to market, with a new Wave 2 awaiting launch and more mass-market devices for

emerging markets.

LG Electronics missed its 3Q10 total mobile phone and smartphone shipment

growth targets, resulting in an overall double-digit shipment decrease when

compared to the same quarter one year ago. LG has yet to make a significant

impact in the smartphone category unlike its competitors. Although operating

margin returned to the same levels as a year ago, sales and profitability both

fell significantly. By the end of the quarter, LG replaced its CEO Nam Yong

with Koo Bon-Joon, head of LG's trading firm, LG International.

Apple leapt ahead of several vendors in 3Q10 including RIM, which it surpassed

by 1.7-million units, and Sony Ericsson by 3.7-million units. The company's

record shipment performance can be attributed to the introduction of the iPhone

4 in 17 new countries last quarter. The record performance came despite

"Antennagate," the name used to describe the controversy around alleged iPhone

reception problems, in July.

Research In Motion posted a record number of unit shipments in 3Q10. The

BlackBerry maker continues to grow in Latin America, for example, due to the

success of the Curve 8520 entry-level model, which has helped drive growth in

most emerging markets. The vendor's results were also boosted by the

introduction of the higher-cost Torch in the United States, a key market due to

the size and intensity of competition.

SonyEricsson, which shipped 10.4 million units in 3Q10, fell off the Top 5 list

for the first time since the Tracker was conceived in 2004.

Top Five Mobile Phone Vendors, Shipments, and Market Share, Q3 2010 (Units in

Millions)

Vendor 3Q10 Unit Shipments 3Q10 Market Share 3Q09 Unit Shipments 3Q09 Market

Share Year-over-year Change

1. Nokia 110.4 32.4% 108.5 36.5% 1.8%

2. Samsung 71.4 21.0% 60.2 20.3% 18.6%

3. LG Electronics 28.4 8.3% 31.6 10.6% -10.1%

4. Apple 14.1 4.1% 7.4 2.5% 90.5%

5. R.I.M. 12.4 3.6% 8.5 2.9% 45.9%

Others 103.8 30.5% 80.9 27.2% 28.3%

Total 340.5 100.0% 297.1 100.0% 14.6%

Source: IDC Worldwide Quarterly Mobile Phone Tracker, October 28, 2010

Note: Vendor shipments are branded shipments and exclude OEM sales for all

vendors.

For more information about IDC s Worldwide Quarterly Mobile Phone Tracker,

please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services,

and events for the information technology, telecommunications, and consumer

technology markets. IDC helps IT professionals, business executives, and the

investment community to make fact-based decisions on technology purchases and

business strategy. More than 1,000 IDC analysts provide global, regional, and

local expertise on technology and industry opportunities and trends in over 110

countries worldwide. For more than 46 years, IDC has provided strategic

insights to help our clients achieve their key business objectives. IDC is a

subsidiary of IDG, the world's leading technology media, research, and events

company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of

their respective holders.

Contacts

IDC

Kevin Restivo, 416-673-2230

krestivo@idc.com

or

Ramon T. Llamas, 508-935-4736

rllamas@idc.com

or

Michael Shirer, 508-935-4200

press@idc.com

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Apple-Joins-Top-Mobile-Phone-Worldwide