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Gartner says worldwide mobile device sales grew 13.8% in second quarter of 2010, but competition drove prices down

Gartner says worldwide mobile device sales grew 13.8% in second quarter of 2010, but competition drove prices down

 

Worldwide mobile device sales to end users totalled 325.6 million units in the second quarter of 2010 – a 13.8% increase from the same period in 2009, according to Gartner.

 

Significantly for retailers targeting multichannel sales growth, smartphone sales to end users accounted for 19% of worldwide mobile device sales, an increase of 50.5% from the second quarter of 2009.

 

“Although the mobile communication devices market showed double-digit growth this quarter, average selling prices (ASPs) were lower than expected and margins fell,” said Carolina Milanesi, research vice president at Gartner. “We attribute the decline in ASPs to a stronger dollar, a depreciating euro, and intense competition that drove price adjustments and changes to the product mix.”

 

Smartphones lead sales growth

 

While new product introductions from Apple, HTC and Motorola, along with the drop in ASPs, drove strong sales of smartphones, shortages of components, such as active matrix organic LED (AMOLED) displays impaired sales volumes of some of the more popular new smartphones.

 

The second quarter also saw some movement in the top 10 mobile device manufacturer rankings. HTC made its debut in the top 10 worldwide ranking, holding the No. 8 position with 139.1% growth year-on-year. This reflects the popularity of its portfolio based on Google’s Android mobile operating system (OS), but also a more aggressive branding strategy compared to the same period in 2009.

 

“Crucially, as we predicted, the sudden growth in media tablets, such as the Apple iPad, did not appear to hold back smartphone sales. We believe that most tablet users still feel the need for a truly pocketable, yet highly capable, device for those situations when it's inconvenient to carry a device with a larger form factor,” said Milanesi.

 

In the second quarter of 2010, Nokia's mobile device sales to end users reached 111.5 million units and a share of 34.2%. And Samsung sold 65.3 million devices in the second quarter of 2010 that translated into a 20.1% market share. Although Samsung's sales were strong in developing markets, its shift in product mix caused an overall decline in ASP.

 

Samsung will also be one of the first manufacturers to bring Windows Phone 7 devices to market, in time for the fourth quarter of 2010, showing that this manufacturer continues to keep its platform options open, even as it works on its own bada platform.

 

The sales of Research In Motion (RIM) mobile device sales to end users reached 11.2 million units in the second quarter of 2010, confirming RIM’s position as the fourth largest brand with a share of 3.4% this quarter. New devices running BlackBerry OS 6.0 – such as RIM's first touchscreen QWERTY slider, the Torch – will be available from the third quarter of 2010.

 

Apple’s mobile device sales reached 8.7 million units or a 2.7% share of the overall mobile device market, but a 14.2 per cent of the smartphone market. Apple maintained its No. 7 position in the worldwide mobile device market and held the No. 3 position in the worldwide smartphone market. Apple's sales would have been higher if it had not had to face tight inventory management in preparation for the arrival of the iPhone 4 at the end of the second quarter of 2010. Apple also suffered from some supply constraint on the new device.

 

Google winning OS battle

 

In the smartphone operating system (OS) market, Android expanded rapidly in the second quarter of 2010, overtaking Apple’s iPhone OS to become the third-most-popular OS in the world. “A non-exclusive strategy that produces products selling across many communication service providers (CSPs), and the backing of so many device manufacturers, which are bringing more attractive devices to market at several different price points, were among the factors that yielded its growth this quarter,” said Milanesi.

 

Smartphone sales to end users totalled 61.6 million units in the second quarter of 2010, a 50.5 per cent increase from the same period in 2009. The top four smartphone OS vendors exhibited growth in the second quarter of 2010, and accounted for 91 per cent of the worldwide smartphone OS market, up 6% year-on-year.

 

“Launches of updated operating systems will help maintain strong growth in smartphones in the second half of 2010 and spur innovation,” added Milanesi. ”But we believe market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs [communications service providers] and developers, and strong brand awareness with consumers and enterprise customers.”