Worldwide mobile phone shipments jumped by 14.5% in the second quarter of 2010, driven by sales of smartphones and entry-level handsets.
The worldwide mobile phone market continued to show signs of improvement during the second quarter of 2010, driven primarily by smartphone vendors and companies outside the top five leaders worldwide. According to IDC’s Worldwide Quarterly Mobile Phone Tracker report, mobile phone vendors shipped a total of 317.5 million units during 2Q10, up 14.5% from the 277.2 million units shipped during the second quarter of 2009 (2Q09). For the first half of 2010, vendors shipped a total of 620.6 million units, up 18.5% from the 523.5 million units shipped during the first half of 2009.
“That worldwide growth was driven primarily by vendors outside the top vendors is particularly noteworthy,” said Ramon Llamas, senior research analyst with IDC.
“Directly contributing to this is growth in the smartphone category. Companies with a strict focus on the smartphone market, like RIM, Apple, and HTC have clearly benefited from steadily increasing user interest.”
However, Llamas also points out that it’s not just new smartphone vendors that have driven the market forward, “it’s also the companies with a presence among entry-level handsets and mid-range devices, which have long been the domain of the worldwide leaders.”
Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker program, said some traditional mobile phone makers and brand owners, such as ZTE, have gained share due to higher volumes of lower-cost models, which are increasingly popular with mobile service providers.
Market Outlook for 2010
Restivo added that smartphone growth, especially in regions such as Latin America and Asia/Pacific (excluding Japan) will power market growth this year. “Lower smartphone average selling prices, increased consumer interest, and aggressive expansion plans on the part of key suppliers will keep the device type growing above market growth rate.”
The Western European market grew due in large part to higher smartphone sales, price cuts to models, new product introductions as well as generous operator subsidies. All phone vendors increased smartphone sales – those companies whose strategies are pegged to Android fared particularly well. Meanwhile, the traditional mobile phone segment declined and even the surge of feature phones in the region from the Asian manufacturers has not been enough to reverse this trend.
Smartphones once again took centre stage in the United States mobile phone market with the highly anticipated launch of Apple’s iPhone 4, HTC’s DROID Incredible and the EVO 4G. While these captured headlines and mindshare, other vendors began seeding the market for what was to come later this year, including Samsung’s Galaxy S, Motorola’s DROID X, and several handsets from Dell. Smartphone growth was also apparent in Canada, where Android-powered smartphones, including Sony Ericsson’s Xperia X10 and Motorola’s Quench, DEXT, and BackFlip arrived on the market. At the same time, basic traditional mobile phones gained popularity with new wireless carrier entrants and discount brands.
Top Five Mobile Phone Vendors Q2 2010
Nokia remained the overall mobile phone market during the quarter, with total shipments exceeding those of the next two vendors combined. But despite this accomplishment, Nokia’s challenges in the high-end of the smartphone market, against Chinese vendors within emerging markets, and from falling behind other vendors in the Americas have contributed to its declining stock price and device profitability. Still, the company should not be taken lightly with its strong brand, manufacturing, and distribution. Nokia remains optimistic with the upcoming launch of the N8 smartphone, the warm reception to its C3 messaging device, and continued success within key emerging markets.
Samsung experienced strong year-on-year growth, citing progress in the United States and emerging markets and success in its touchscreen devices. At the same time, the combination of soft demand in Europe, late launches of key smartphone models, and product mix adjustments resulted in revenue and profit decline for the quarter. Still, Samsung anticipates improvement during the second half of the year, as its highly anticipated Galaxy S smartphone series readies for launch and more touchscreen models are on the way.
LG rebounded during the quarter, sending shipment volumes back above the 30 million unit mark after a one quarter lull. The launch of two Android-powered smartphones – the Ally and the Optimus Q – helped bolster the company’s smartphone portfolio, while the continued success of the youth-oriented phones and messaging devices helped drive continued success in the traditional mobile phone market. From a financial perspective, however, LG’s revenues and profits declined sharply from a year ago, reflecting ASP declines from an aging portfolio and expenses incurred from R&D and marketing.
Research In Motion posted the highest year-over-year gain (40%) of all the top five vendors, a feat accomplished by its singular focus on the smartphone market. The company shipped its 100 millionth BlackBerry device last quarter – it also launched the BlackBerry Pearl 3G and the BlackBerry Bold 9650. These joined their popular cousins, the BlackBerry Curve 8520 and BlackBerry Bold 9700. RIM also unveiled its new BlackBerry 6 operating system, featuring a new user interface and browser, which answers some of the criticisms and comparisons against other operating systems currently available on the market.
Sony Ericsson continued to make positive strides as the company realigned its focus. Although shipments were down 20.3% year over year, Sony Ericsson’s launch of several Android-powered high-end smartphones (Xperia X10, X10 mini, and the X10 mini pro) has already resulted in strong revenue results. Moreover, the company announced the Xperia X8, a lower priced smartphone featuring a touchscreen. Sony Ericsson also shipped several handsets designed for the mid-range of the market, but clearly, emphasis on its growing smartphone platform was key to its success for the quarter.
Top Five Mobile Phone Vendors, Shipments, and Market Share, Q2 2010 (Units in Millions)
|Vendor||2Q10 Shipments||2Q10 Market Share||2Q09 Shipments||2Q09 Market Share||2Q10/2Q09 Change|
|Research In Motion||11.2||3.5%||8.0||2.9%||40.0%|
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 29, 2010[ad name=”Google Text half banner advert “]