Smartphone Sales Increased 42 Percent

Worldwide sales of mobile devices totaled 440.5 million units in the third

quarter of 2011, up 5.6 percent from the same period last year, according to
Gartner, Inc. Non-smartphone devices performed well, driven by demand in
emerging markets for low-cost devices from white-box manufacturers, and for
dual-subscriber identity module (SIM) devices.

Sales into the channel reached 460 million units. Gartner analysts said this
increase was because of inventory build-up in the channel partly because of the
shipping of new devices late in the quarter but mostly to prepare the channel
for the holiday season. Gartner expects most of the build-up to be sold by the
first quarter of 2012.

“Our forecast for the end of the year remains broadly in line at a worldwide
level as regions such as Asia/Pacific and the Middle East and Africa make up for
weaker performance in the Western European market,” said Annette Zimmermann,
principal analyst at Gartner based in Munich.

Smartphone sales to end users reached 115 million units in the third quarter of
2011, up 42 percent from the third quarter of 2010. Sequentially, smartphone
sales slowed to 7 percent growth from the second quarter of 2011 to the third
quarter of 2011. Smartphone sales accounted for 26 percent of all mobile phone
sales, growing only marginally from 25 percent in the previous quarter.

“Strong smartphone growth in China and Russia helped increase overall volumes in
the quarter, but demand for smartphones stalled in advanced markets such as
Western Europe and the U.S. as many users waited for new flagship devices
featuring new versions of the key operating systems,” said Roberta Cozza,
principal research analyst at Gartner. “Slowdowns also occurred in Latin America
and the Middle East and Africa.”

“Some consumers held off upgrading in the third quarter because they were
waiting for promotions on other new high-end models that were launched in the
run-up to the fourth quarter holiday season,” Ms. Cozza said. “Other consumers
were waiting for a rumored new iPhone and associated price cuts on older iPhone
models; this affected U.S. sales particularly.”

Despite a drop in market share, Nokia continued to be the worldwide leader in
mobile device sales as it accounted for 23.9 percent of global sales (see Table
1). The second quarter of 2011 was the low point for Nokia, and the third
quarter brought signs of improvement. Dual-SIM phones in particular, and feature
phones generally, maintained Nokia’s momentum in emerging markets. Heavy
marketing from both Nokia and Microsoft to push the new Lumia devices should
bring more improvement in the fourth quarter of 2011. However, a true turnaround
won’t take place until the second half of 2012.

Table 1

Worldwide Mobile Device Sales to End Users by Vendor in 3Q11 (Thousands of
Units)

Vendor

3Q11

 Units

3Q11 Market Share (%)

3Q10

 Units

3Q10 Market Share (%)

Nokia

105,353.5

23.9

117,461.0

28.2

Samsung

78,612.2

17.8

71,671.8

17.2

LG Electronics

21,014.6

4.8

27,478.7

6.6

Apple

17,295.3

3.9

13,484.4

3.2

ZTE

14,107.8

3.2

7,817.2

1.9

Research In Motion

12,701.1

2.9

12,508.3

3.0

HTC

12,099.9

2.7

6,494.3

1.6

Motorola

11,182.7

2.5

8,961.4

2.1

Huawei Device

10,668.2

2.4

5,478.1

1.3

Sony Ericsson

8,475.9

1.9

10,346.5

2.5

Others

148,990.9

33.8

135,384.1

32.5

Total

440,502.2

100

   417,085.7

100

Source: Gartner (November 2011)

Samsung became the No. 1 smartphone manufacturer worldwide as sales to end users
tripled year over year to reach 24 million; sell in was high as the channel
built inventory. Samsung was the No. 1 smartphone manufacturer for the first
time, ahead of Nokia in Western Europe and Asia. Gartner attributes this to the
strong performance of Samsung’s Galaxy smartphones, which now cover a broad
range of prices, and a weaker competitive market. Analysts expect more
competition in the fourth quarter of 2011, not least because sales of the iPhone
4S, 4 and 3GS will capture share from Android manufacturers.

Apple shipped 17 million iPhones, an annual increase of 21 percent, but down
nearly 3 million units from the second quarter of 2011 because of Apple’s new
device announcement in October. Gartner believes Apple will bounce back in the
fourth quarter because of its strongest ever preorders for the iPhone 4S in the
first weekend after its announcement. Markets such as Brazil, Mexico, Russia and
China are becoming more important to Apple, representing 16 percent of overall
sales and showing that the iPhone has a place in emerging markets, especially
now that the 3GS and 4 have received price cuts.

The Android OS accounted for 52.5 percent of smartphone sales to end users in
the third quarter of 2011 (see Table 2), more than doubling its market share
from the third quarter of 2010.

“Android benefited from more mass-market offerings, a weaker competitive
environment and the lack of exciting new products on alternative operating
systems such as Windows Phone 7 and RIM,” Ms. Cozza said. “Apple’s iOS market
share suffered from delayed purchases as consumers waited for the new iPhone.
Continued pressure is impacting RIM’s performance, and its smartphone share
reached its lowest point so far in the U.S. market, where it dropped to 10
percent.”

Table 2

Worldwide Smartphone Sales to End Users by Operating System in 3Q11 (Thousands
of Units)

Operating System

3Q11

 Units

3Q11 Market Share (%)

3Q10

 Units

3Q10 Market Share (%)

Android

60,490.4

52.5

20,544.0

25.3

Symbian

19,500.1

16.9

29,480.1

36.3

iOS

17,295.3

15.0

13,484.4

16.6

Research In Motion

12,701.1

11.0

12,508.3

15.4

Bada

2,478.5

2.2

920.6

1.1

Microsoft

1,701.9

1.5

2,203.9

2.7

Others

1,018.1

0.9

1,991.3

2.5

Total

115,185.4

100

   81,132.6

100

Source: Gartner (November 2011)

 

 

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