FRAMINGHAM, Mass. July 29, 2010 – 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 IDC’s 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 midrange
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 lowcost
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.
Contacts:
Ramon T. Llamas
(508) 935 4736
rllamas@idc.com
Kevin Restivo
(416) 673 2230
krestivo@idc.com