Published: July 29, 2010
Mobile Phone Demand Expands 14.5% as Market Fragments; Top 5 Pressured by Challengers, Says IDC
FRAMINGHAM, Mass. - (BUSINESS WIRE) - The worldwide mobile phone market continued to show signs of improvement
during the second quarter of 2010 (2Q10), driven primarily by smartphone
vendors and companies outside the top five leaders worldwide. According
to the International Data Corporation (IDC)
Worldwide
Quarterly Mobile Phone Tracker, 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's Mobile
Devices Technology and Trends team. "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. But it's not just 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.
"To dismiss the worldwide leaders would be a mistake," added Llamas.
"Each currently enjoys broad distribution, a deep portfolio, and brand
recognition. Moreover, each is in the midst of refreshing its respective
product portfolio, with greater emphasis on smartphones during the
second half of this year. Still, the upward pressure from vendors
outside the current top five vendors, particularly Apple and Motorola,
will provide tough competition in the quarters to come."
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 wireless 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."
Regional Developments Q2 2010
Asia Pacific
During the second quarter, the Asia/Pacific (excluding Japan) region
was in part driven by low-cost phones from domestic players. While these
phones were often produced by manufacturers in China, they were branded
locally, and had growing impact on emerging markets like India,
Indonesia, and Vietnam. Smartphones for the region outpaced the overall
market, with a major hike in the Korea market as smartphones gained
greater traction for Korean and international brands alike. In Japan,
the absence of operator subsidies has kept mobile phone shipments down
for smartphones and traditional mobile phones alike, but this has not
kept vendors from experimenting with cutting edge features, including
digital television and radio.
EMEA
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.
Consistent growth has returned to the CEMA handset market, buoyed
by continued mobile subscriber growth in the Middle East and Africa.
Smartphones saw expansion in the region after the retrenchment of 2009
during the financial crisis, which were buoyed by price cuts to Nokia
models and the introduction of cheaper smartphone models. Among
traditional mobile phones, Nokia faced more competition as Samsung took
share away thanks to its entry level models.
North America
Smartphones once again took center 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.
Latin America
Smartphone growth continued unabated in Latin America, as a
combination of increasing user interest, low-priced data plans, and
availability for prepaid services drove shipments higher during the
quarter. Nokia, the longtime smartphone leader in Latin America, saw its
market share under heavy pressure as Apple, HTC, Research In Motion and
several others made significant inroads into the market. More smartphone
launches are expected during the second half of the year, putting more
these devices within reach of more Latin American users and driving
competition in this segment of the market higher.
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 Electronics 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
|
|
Nokia
|
|
111.1
|
|
35.0%
|
|
103.2
|
|
37.2%
|
|
7.7%
|
|
Samsung
|
|
63.8
|
|
20.1%
|
|
52.3
|
|
18.9%
|
|
22.0%
|
|
LG Electronics
|
|
30.6
|
|
9.6%
|
|
29.8
|
|
10.8%
|
|
2.7%
|
|
Research In Motion
|
|
11.2
|
|
3.5%
|
|
8.0
|
|
2.9%
|
|
40.0%
|
|
Sony Ericsson
|
|
11.0
|
|
3.5%
|
|
13.8
|
|
5.0%
|
|
-20.3%
|
|
Others
|
|
89.8
|
|
28.3%
|
|
70.1
|
|
25.3%
|
|
28.1%
|
|
Total
|
|
317.5
|
|
100.0%
|
|
277.2
|
|
100.0%
|
|
14.5%
|
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 29, 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.
IDC
Ramon T. Llamas, 508-935-4736
rllamas@idc.com
or
Kevin
Restivo, 416-673-2230
krestivo@idc.com
or
Michael
Shirer, 508-935-4200
press@idc.com
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