Ronnie05's Blog

Global 2009 and Q4,2009 Smartphone and Device Market Shares

Posted in Industry updates by Manas Ganguly on February 27, 2010

The Global meltdown took its toll, but the silver lining is the market picking up as the crisis slowly dissolves. So while the total phone sales fell by 1% YOY, Q4 registered a strong resurge of 9%. This a swing of 13.5% versus the cumulative Quarters Q1,Q2,Q3. Contribution of Q4 sales to Total year sales hit 28% versus 25% on a normal basis.

The mobile devices market finished on a very positive note, driven by growth in smartphones and low-end devices. Smartphone sales to end users continued their strong growth in the fourth quarter of 2009, totalling 53.8 million units, up 41.1 per cent from the same period in 2008. In 2009, smartphone sales reached 172.4 million units, a 23.8 per cent increase from 2008. In 2009, smartphone-focused vendors like Apple and Research In Motion (RIM) successfully captured market share from other larger device producers, controlling 14.4 and 19.9 per cent of the worldwide smartphone market, respectively.

2009, intense price competition put pressure on average selling prices (ASPs). The major handset producers had to respond more aggressively in markets such as China and India to compete with white-box producers, while in mature markets they competed hard with each other for market share. Gartner expects the better economic environment and the changing mix of sales to stabilise ASPs in 2010.

Three of the top five mobile phone vendors experienced a decline in sales in 2009. The top five vendors continued to lose market share to Apple and other vendors, with their combined share dropping from 79.7 in 2008 to 75.3 per cent in 2009.

Nokia’s annual mobile phone sales to end users reached 441 million units, a 2.2 per cent drop in market share from 2008. Although Nokia outperformed industry expectations in sales and revenue in the fourth quarter of 2009, its declining smartphone ASP showed that it continues to face challenges from other smartphone vendors and from the white-box manufacturers in the mid and low end. Nokia will face a tough first half of 2010 as improvement to Symbian and new products based on the Meego platform will not reach the market well before the second half of 2010. Its very strong mid-tier portfolio will help it hold market share, but its ongoing weakness at the high end of the portfolio will hurt its share of market value.

Samsung was the clear winner among the top five with market share growing by 3.2 percentage points from 2008. This achievement came as a result of improved channel relationships with distributors to extend its reach and better address the needs of individual markets as well as a rich mid-tier portfolio. For 2010, the company is putting a focus on Bada, its new operating system (OS) that aims at adding the value of an ecosystem to its successful hardware lineup.

Motorola sold slightly more than half of its 2008 sales and exhibited the sharpest drop in market share, accounting for 4.8 per cent market share in 2009. “Its refocus away from the low-end market limited the volume opportunity, but should help it drive margins going forward. Motorola’s hardest barrier is to grow brand awareness outside the North American market, where it benefits from a long-lasting relationship with key communications service providers (CSPs).

Symbian dropped 5.4 percentage points in 2009. Competitive pressure from its competitors, such as RIM and Apple, and the continued weakness of Nokia’s high-end device sales have negatively impacted Symbian’s share. Symbian had become uncompetitive in recent years, but its market share, particularly on Nokia devices, is still strong. If Symbian can use this momentum, it could return to positive growth.

The key in this report is the rise of Android (mostly Q4 numbers). Android increased its market share by 3.5 percentage points in 2009, while Apple’s share grew by 6.2 percentage points from 2008. Apple with just one product has managed to dislodge WinMo which has multiple vendors. WinMo desperately needs WinMo 7.0 to hold the freefall. Android’s success experienced in the fourth quarter of 2009 should continue into 2010 as more manufacturers launch Android products, but some CSPs and manufacturers have expressed growing concern about Google’s intentions in the mobile market. This is in view of the Google Nexus One and the concerns can cause manufacturers to change their product strategies or CSPs to change which devices they stock, this might hinder Android’s growth in 2010

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