Mobile phone market grows in Q3 thanks to smartphones

The global mobile phone market grew by 14.6 percent in the third quarter of 2010 research has found.

According to International Data Corporation (IDC)  Worldwide Quarterly Mobile Phone Tracker report, Q3 was the fourth consecutive quarter of double-digit growth, driven in part by the fast-growing converged mobile device category. It found that vendors shipped 340.5 million units in 3Q10 compared to 297.1 million units in the third quarter of 2009.

Apple moved into the number four position worldwide in 3Q10, joining Research In Motion (RIM) as one of the world’s largest mobile phone suppliers. IDC pointed out however, that RIM had stayed in the top five for the last three calendar quarters..

It added that Apple and RIM also posted the highest-growth rates among the top five vendors last quarter.

“The entrance of Apple to the top five vendor ranking underscores the increased importance of smartphones to the overall market. Moreover, the mobile phone makers that are delivering popular smartphone models are among the fastest growing firms,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker.

He warned that vendors that were not developing a “strong portfolio” of smartphones would be challenged to “maintain and grow market share in the future.”

One example of a flailing company is Nokia, which has had the pressure piled on thanks to
Apple, RIM, and other manufacturers producing Android-based smartphones.

“Nokia still leads all vendors by a significant margin for converged mobile devices and mobile phones as a whole,” said 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. To bolster its overall competitiveness, Nokia has been focused on improving its smartphone offerings.”

Nokia’s problems aside, it seems smartphones are the way forward with IDC claiming that the future mobile phone market will be driven by these devices at least to the end of 2014. It said this year it was expecting the smartphone sub-market to grow 55 percent year over year.

And the regional breakdowns look positive too, unless you’re Nokia, with IDC noting that competitive forces emerged in the Asia/Pacific (excluding Japan) region last quarter 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, while Android-powered smartphones also gained momentum across the region at the expense of the Sweedish company.

Samsung also found pastures new 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.

Back in Europe, the market’s growth was largely attributable to smartphones, which grew as a result of the iPhone 4 and Android-powered devices from HTC and Samsung. Demand was also stoked by large operator device subsidies that helped to keep consumer interest in smartphones high. At the same time, the CDMA handset market grew slowly in 3Q10.

And in the US the smartphone trend continued. 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 of which were launched last quarter.

Samsung also got a look in with its Galaxy S smartphone lineup. Traditional mobile phones, meanwhile, fought back with smartphone-like functionality, but saw their overall share of the market continue to decline.

And again smartphones ruled the roost in the Latin American region, which 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, IDC added.

Despite its tales of woe Nokia maintained the top spot in the overall mobile phone market despite year-over-year unit shipment growth of less than two percent in new chief executive Steven Elop’s first quarter at the helm. The company grew converged mobile device shipments 61percent in 3Q10, but average selling prices for the device type dropped. Nokia attributed the plunge to price pressure from competitors and its stated desire to reach more customers. IDC said Nokia hoped the C8 and C7 devices will boost ASPs in future.

Second in the rat race was Samsung, which marked a new milestone during the third quarter, pushing through the 70 million unit mark for the first time in the company’s history. And the good news didn’t end there with the company more than doubling the number of converged mobile device shipments from the previous quarter.

Driving this was the worldwide release of its Galaxy S i9000 converged mobile device, as well as its bada-based Wave model. Looking ahead to the fourth quarter, IDC predicts that Samsung appears poised to bring more smartphones to market, with a new Wave 2 awaiting launch and more mass-market devices for emerging markets.

LG Electronics missed its 3Q10 total mobile phone and smartphone shipment growth targets, resulting in an overall double-digit shipment decrease when compared to the same quarter one year ago. According to IDG this showed that LG has yet to make a significant impact in the smartphone category unlike its competitors.

And of course there’s Apple, which “leapt ahead of several vendors in 3Q10” including RIM, which it surpassed by 1.7-million units, and Sony Ericsson by 3.7-million units. According to IDC, the company’s record shipment performance can be attributed to the introduction of the iPhone 4 in 17 new countries last quarter.

Rival RIM also  posted a record number of unit shipments in 3Q10. The BlackBerry maker continues to grow in Latin America, due to the success of the Curve 8520 entry-level model, which has helped drive growth in most emerging markets.

Sony Ericsson, which shipped 10.4 million units in 3Q10, fell off the Top 5 list for the first time since the Tracker was conceived in 2004.