FRAMINGHAM, Mass.--(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.)--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 (
“To dismiss the worldwide leaders would be a mistake”
"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
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.
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.
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.
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)
|Research In Motion||11.2||3.5%||8.0||2.9%||40.0%|
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 firstname.lastname@example.org.
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