The global smartphone market grew 50 percent during the second quarter, compared with figures from a year ago, ABI Research reported Oct. 26. Driven by strong sales from Apple, HTC and BlackBerry maker RIM, smartphones constituted 19 percent of all handsets shipped during the quarter, representing a 12 percent jump from the first quarter.
"The market is exploding," ABI Senior Analyst Michael Morgan wrote in the report, adding that while 10 percent growth would normally be considered "very good" quarter-on-quarter growth, in today's market, such a figure would be chalked up as "lackluster."
Helping to drive such "remarkable" growth rates, said Morgan, are the low prices of handsets, which both have fallen and are now often heavily subsidized. The question being asked now, he said, is whether such a market structure can be sustained.
The answer? "Most observers say no," Morgan continued. "It needs to boil down to three or perhaps four key operating systems."
Apple, with its iPhones running iOS, shipped 8.4 million iPhones during the second quarter (approximately 3 million of which were the iPhone 4), resulting in a quarter-on-quarter growth of 68 percent, according to ABI.
Taiwan-based HTC, which has filled its mobile portfolio with Android-running smartphones, also saw shipments grow during the quarter, from 3.3 million to 5.3 million handsets. And RIM, which launched its newest OS, BlackBerry 6-not to mention the QNX-based BlackBerry Tablet OS, on its PlayBook tablet-saw shipments grow from 10.5 million to 11.2 million, a figure expected to climb more significantly in future quarters. "RIM hasn't seen the full benefit of its OS launch yet," Morgan explained.
Additionally, Hewlett-Packard, which this summer purchased Palm, will soon begin offering smartphones running the Palm-created WebOS, while Intel and Nokia are working on handsets running MeeGo-an OS created from a mix of Nokia's Maemo and Intel's Moblin. Finally, Samsung, while investing heavily in Android, has also introduced Wave and Wave II smartphones, which run its proprietary Bada open-source platform.
In subsidized smartphone markets, a final barrier to adoption, says ABI's Morgan, is now the cost of data plans.
Executives at Verizon Wireless, during their third-quarter earnings call Oct. 22, confirmed that like rival AT&T it will soon begin offering tiered pricing for its data plans, including a $15 option that it expects will attract first-time smartphone users. Unlike AT&T, however, which recently ended its offer of an unlimited plan, Verizon still plans to offer an "all-you-can-eat" option.
The latter, suggests the ABI report, may also be contributing to the unsustainable nature of the current smartphone market.
The "huge numbers of smartphones now connected in U.S., particularly those running iOS and Android," states the report, are creating "capacity concerns." Such concerns, said Morgan, are "sucking the value out" of the mobile ecosystem.