Worldwide mobile device sales to end users totalled 325.6 million units in Q2, up 13.8 percent from the same period in 2009, according to a study by Gartner. Smartphone sales to end users accounted for 19 percent of worldwide mobile device sales, an increase of 50.5 percent from the second quarter of 2009.
Although the mobile phone market showed double-digit growth this quarter, average selling prices were lower than expected and margins fell. Gartner attributes the decline in ASPs to a stronger dollar, a depreciating euro and intense competition that drove price adjustments and changes to the product mix. Manufacturers such as LG and Samsung pursued market share in a low-margin market but this approach proved risky, as shown by LG’s decline of 27.8 percent in ASP in Q2. 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 Amoled displays impaired sales volumes of some of the more popular new smartphones.
HTC made its debut in the top ten worldwide ranking, in eighth position with 139.1 percent growth year-on-year. This reflects the popularity of its Android portfolio and also a more aggressive branding strategy compared to a year ago. In the second quarter, Nokia’s mobile device sales to end users reached 111.5 million units and a share of 34.2 percent. Nokia’s economies of sales and excellent distribution enabled it to hold on to the top spot in the mobile device market, but the company lost 2.6 percentage points year-on-year. Samsung sold 65.3 million devices in Q2, which translated into a 20.1 percent market share. Although Samsung’s sales were strong in developing markets, its shift in product mix caused an overall decline in ASP. Samsung maintained its position in the midtier by launching several new devices, including messaging handsets. This more aggressive strategy toward the mass market enabled it to reduce inventory in Q2. Samsung will also be one of the first manufacturers to bring Windows Phone 7 devices to market, in time for Q4, showing that this manufacturer continues to keep its platform options open, even as it works on its own bada platform. Research In Motion’s mobile device sales reached 11.2 million units in Q2, confirming RIM’s position as the fourth largest brand with a share of 3.4 percent in Q2. New devices running BlackBerry OS 6.0, such as RIM’s Torch, will be available from Q3. Gartner believes the Torch’s form factor will still appeal more to business users than to consumers and will stop many loyal BlackBerry users defecting to other platforms, but it will not attract many new users to the brand. Apple’s mobile device sales reached 8.7 million units or a 2.7 percent share of the overall mobile device market, but 14.2 percent of the smartphone market. Apple maintained its seventh position in the worldwide mobile device market and held the third 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 Q2. Apple also suffered from some supply constraint on the new device. Gartner expects that a wider global rollout of iPhone 4 will sustain Apple’s sales momentum throughout H2.
In the smartphone OS market, Android expanded rapidly in Q2, overtaking Apple’s iPhone OS to become the third-most popular OS in the world. In the US, it also overtook RIM’s OS to become the top smartphone OS in the region. According to Gartner, a non-exclusive strategy that produces products selling across many communication service providers 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 Android’s growth this quarter. Smartphone sales to end users totalled 61.6 million units in Q2, a 50.5 percent increase from the same period in 2009. Symbian had the highest market share of 41.2 percent with 25.4 million smartphones sold to end users by OS. The top four smartphone OS vendors exhibited growth in Q2, and accounted for 91 percent of the worldwide smartphone OS market, up 6 percent year-on-year. Gartner said CSPs will increasingly offer more affordable tiered data plans to users. Tiered data plans will make smartphones more accessible to different market segments and help make smartphones the dominant device category in mature markets. This means that total cost of ownership will be lower, and new users will face less of a barrier to entry. Launches of updated operating systems will help maintain strong growth in smartphones in H2 and spur innovation. Gartner also believes market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers, and strong brand awareness with consumers and enterprise customers.