News

10 November 2010

 

Apple joins top-5 mobile phone vendors as market grows nearly 15% year-on-year

Worldwide mobile phone shipments increased for a fourth consecutive quarter of double-digit growth rates in third-quarter 2010, reaching 340.5 million units (up 14.6% on 297.1 million units in third-quarter 2009), according to the Worldwide Quarterly Mobile Phone Tracker of market research firm International Data Corp (IDC). The increase was driven partly by the fast-growing converged mobile device category.

The growing popularity of converged mobile devices (smartphones) with consumers and business people 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 Q3, 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.

“The entrance of Apple to the top 5 vendor ranking underscores the increased importance of smartphones to the overall market,” says senior research analyst Kevin Restivo. “Moreover, the mobile phone makers that are delivering popular smartphone models are among the fastest-growing firms,” he adds. “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 overall market leader Nokia. “Nokia still leads all vendors by a significant margin for converged mobile devices and mobile phones as a whole,” says 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,” he adds.

Regional analysis

• In Q3/2010, competitive forces emerged in the Asia/Pacific (excluding Japan) region 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.

• Western European market growth was largely attributable to smartphones, due to the iPhone 4 and Android-powered devices from HTC and Samsung. Demand was also stoked by large operator device subsidies that helped to maintain high consumer interest in smartphones. At the same time, the CEMA (Central/Eastern Europe, the Middle East and Africa) handset market grew slowly in Q3. Smartphone volumes are hence growing substantially but still comprise just one-fifth of total shipments for the regions combined (modest compared to more economically developed regions).

• The USA market was characterized by growth in smartphones. 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 launched in Q3). Not to be overlooked was Samsung’s Galaxy S smartphone lineup (launched at all of the major carriers in Q3). Meanwhile, traditional mobile phones 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.

• Despite continued economic sluggishness in some countries, the Latin American 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 top spot in the overall 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 firm grew converged mobile device shipments 61% in Q3, but average selling prices (ASPs) for the device type dropped to €136, compared to €190 a year ago. Nokia attributed the plunge to price pressure from competitors and its stated desire to reach more customers. “To bolster its overall competitiveness, Nokia has been focused on improving its smartphone offerings,” says Llamas. Nokia hopes the C8 and C7 devices will boost ASPs in future.

Samsung marked a new milestone during Q3, exceeding 70 million units. Also, the firm more than doubled its number of converged mobile device shipments from Q2. Driving this was the worldwide release of its Galaxy S i9000 converged mobile device, as well as its bada-based Wave model. Samsung appears poised to bring more smartphones to market in Q4, with a new Wave 2 awaiting launch and more mass-market devices for emerging markets.

LG Electronics missed its Q3 total mobile phone and smartphone shipment growth targets, resulting in an overall double-digit shipment decrease from a year ago. Unlike its competitors, LG has yet to make a significant impact in the smartphone category. Although operating margin returned to the same levels as a year ago, sales and profitability both fell significantly. By the end of Q3, LG replaced its CEO Nam Yong with Koo Bon-Joon, head of LG's trading firm LG International.

SonyEricsson, which shipped 10.4 million units in Q3, fell off the Top 5 list for the first time since IDC's Worldwide Quarterly Mobile Phone Tracker was conceived in 2004. It was surpassed by 3.7 million units by Apple leaping ahead of several vendors with a record 14.1 million shipments due to its introduction of the iPhone 4 in 17 new countries in Q3 (despite July’s ‘Antennagate’ controversy around alleged iPhone reception problems).

Although surpassed by Apple by 1.7 million units, Research In Motion (R.I.M.) posted a record 12.4 million shipments in Q3. The BlackBerry maker continues to grow in Latin America, for example, due to success of its Curve 8520 entry-level model, which has helped drive growth in most emerging markets. The firm’s results were boosted by the launch of the higher-cost Torch in the USA, a key market due to the size and intensity of competition.

IDC believes that 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,” notes 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.”

Top five mobile phone vendors, shipments and market share, Q3/2010 (in millions)
Vendor	Q3/10 shipments	Share	Q3/09 shipments	Share	Year-on-year change
Nokia	110.4	32.4%	108.5	36.5%	1.8%
Samsung	71.4	21.0%	60.2	20.3%	18.6%
LG	28.4	8.3%	31.6	10.6%	–10.1%
Apple	14.1	4.1%	7.4	2.5%	90.5%
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%

Footnote: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

See related items:

Handset shipments reach 327m in Q3

Asia-Pacific helping push global handset shipments to 1.34bn in 2010

Handset market grows to 346.2m in Q3, while Samsung gains market share

Mobile handset shipments to reach 1.43bn in 2011

Search: Mobile handset shipments

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