RIM, Apple Gain in Handset Market, Analyst Says

Apple and Research In Motion had strong first quarters in the global handset market, while Motorola and Sony Ericsson suffered major hits, according to a May 17 report from iSuppli.
The report echoed late-April data from IDC, which likewise showed RIM to have risen to a top-five position, largely at Motorola’s expense.
RIM shipped 10.5 million BlackBerry handsets during the first quarter, which was up from 7.8 million units a year earlier and amounted to a 3.6 percent growth for the quarter and 34.6 percent year-over-year growth.
Apple, directly behind RIM, in sixth place, showed an impressive 130.7 percent growth year over year, though only 0.2 percent growth for the quarter, and sales rose from its first-quarter 2009 figure of 3.8 million to 8.8 million iPhones in the first quarter of 2010.
Both companies offer smartphones exclusively, iSuppli noted, unlike Motorola, with its mix of smartphones and feature and messaging phones. In the first quarter, Motorola fell from its fifth-position perch to eighth, following sales of 8.5 million handsets. This was down from its 14.7 million units a year earlier.
“Smartphones represent the hottest segment of the cell phone market, with unit shipment growth of 35.5 percent expected in 2010, compared to 11.3 percent for the overall mobile handset business,” iSuppli analyst Tina Teng wrote in the report. “Because of this, companies that are exclusively focused on this area, like RIM and Apple, have managed to move up to near the top tier of the global cell phone business. This shows that the smartphone is reshaping the competitive landscape of the wireless business.”
As recently as the first quarter of 2007, following major success with the Razr phone, Motorola held the No. 2 market-share position globally. Understanding the need for a now greater emphasis on smartphones, Motorola has more recently introduced the Droid, a big hit for Verizon Wireless in the United States, as well as the Backflip, the first Android phone on AT&T Wireless. In June, it will launch the Flipout, running Android 2.1.
“While Motorola’s ranking and share declined in the first quarter, the company did manage to make significant improvement in profit during the period, with its margin rising by 19 percentage points compared to the first quarter of 2009,” Teng wrote.
“This shows that Motorola is on the right track in its product mix, focusing on more profitable devices like Droid. As the company works to transition its product line to smartphones tailored for social networking activities, and to reduce sales of lower-priced, lower-margin models, it stands to further enhance its profitability-and perhaps reclaim some market share.”
First in market share, Nokia shipped 107.8 million handsets during the first quarter, up from 93.2 million a year earlier, though it still experienced a slight dip in market share, from 37.9 percent in the first quarter of 2009 to 37.4 percent in the first quarter of 2010. Second-place Samsung, meanwhile, boosted its market share during that same period from 20.6 to 22.3 percent, shipping 64.3 million units, up from 45.8 million.
In third place, LG Electronics shipped 27.1 million units, up from 22.6 million a year earlier, followed by fourth-place Sony Ericsson-which suffered a major slip, shipping just 10.5 million handsets during the first quarter, down from 14.5 million a year earlier.
“RIM is now within a hair’s breadth of displacing Sony Ericsson for the No. 3 rank in the global cell phone market,” Teng noted. “It will be interesting to see how much more market share RIM and Apple can gain in 2010.”
Though nearly a footnote to the industry’s largest players, 10th-place TCL-Alcatel shipped 5.2 million handsets during the first quarter, which represented a more-than-notable 160.7 percent year-over-year growth, according to iSuppli.