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Smartphone Market Share Update 2Q, 2010: Strategy Analytics

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 23, 2010

A market share update from Strategy Analytics

2Q 2010 saw 60 million smartphones being shipped globally, a 43% jump versus 2Q 2009. Overall, smartphones accounted for 19 percent of all handsets shipped during 2Q,2010. Strategy Analytics reasons that the 43% Growth was driven by robust subsidies from carriers, strong competition between high-end vendors, and a rising selection of lower-cost phones running systems like Android and Symbian

On the flip side, the dizzying array of smartphones and the increasingly competitive market could pose a challenge to manufacturers trying to ramp up profits. The global smartphone industry is growing volume, but the industry’s value is beginning to feel the effects of intensifying competition. Dozens of vendors from the telecoms, PC and consumer electronics industries are piling into the market and driving down prices. Even established brands such as Nokia, RIM, and Apple are finding it increasingly hard to raise prices and profits in the face of such fierce competition.

Among the three major smartphone players, Nokia’s market share dipped slightly to 40.3 percent compared with 40.7 percent in 2009’s second quarter. Second-place Research in Motion saw its slice of the market fall to 18.8 percent from 19.3 percent a year-ago. And third-place Apple watched its share grow to 14.1 percent from 12.5 percent in last year’s quarter.

Even while Nokia reported a 40% drop in profits in the 2nd Quarter 2010, it was able to grow its smartphone shares from 38.8% (Exit 2009) to 40.3%. Going forward a lot of Nokia’s smartphone fortunes would depend upon the N8 and Symbian 3 Operating systems. While there have rumours of CEO Olli Pekka’s exit after a sub-optimal performance, the biggest concern for Nokia is its ASP.The average selling price for Nokia smartphones declined to €143 from €181 a year ago. Currently the 43% increase in volume has offset the 21% decrease in ASP. However going forward competition from low end Androids may result in further ASP drops unless Symbian 3 is able to reverse the perception of inability of Symbian to support Smart features.

RIM may be the top gun in the North American smartphone markets, but it is also under pressure from the Android armies of HTC, Motorola and Samsung. RIM’s inability to produce a great touch experience can also be a handicap going forward. A lot depends on Blackberry OS 6.0 due launch soon. Analysts and Tech Geeks are also awaiting the rumored Blackberry Tablet. There would be lot of learnings on the Tablet front that could be taken to Blackberry’s touch portfolio.

While Apple continues to beat the smartphone growth, there are some signs of the Apple sales slowing down and this is chiefly attributed to the following factors: Users were more likely to put off purchases of the iPhone in 2Q 2010 because of the anticipation of iPhone 4G. Secondly, Apple may be reaching the upper limits of the number of customers it can grab through its current carriers, especially in major iPhone markets such as the U.S., China, and Japan. To expand market share much further, Apple will need to reach out beyond its current lineup of carriers. Higher growth for Apple is expected to happen from Multiple carrier tie-ups across large markets such as US, China and Japan. The backlash of the Foxconn worker suicides and the Antennagate issue is expected to have blunted Apple’s mind share amongst it followers.

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