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    Nokia, Samsung, LG Lead Rising Q2 Handset Sales

    Written by

    Michelle Maisto
    Published July 30, 2010
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      Nokia, Samsung and LG Electronics led the worldwide handset market through another growing quarter, Strategy Analytics said in a July 30 report. Handset shipments reached 308 million units, up 13 percent from 273 million units a year earlier. Driving this forward motion, said the firm, were high-end 3G touch phones in developed markets and lower-end 2G handsets in emerging ones.

      Following the race leaders were BlackBerry-maker Research In Motion; and on-RIM’s-heels Sony Ericsson; a sixth-position Apple; and close behind the iPhone maker, Motorola.

      Market leader Nokia, with its 36.1 percent market share, saw shipments rise to 111.1 million from 107.8 million units the quarter before, though it nonetheless faced criticism for its annual 8 percent growth-which was just under the industry average.

      “We estimate Nokia’s global market share of legitimate handset shipments dipped to 36 percent, compared with 38 percent a year earlier,” Strategy Analytics analyst Neil Mawston wrote in the report. “The much-awaited flagship N8 smartphone, with an upgraded Symbian 3 user experience, should arrive well in time for the European holiday season and help stabilize profit margins during the second half of the year. However, we caution that a lack of retail presence and media coverage in the high-value U.S. 3G market means the N8 may not meet its full global sales potential.”

      Mawston added that MeeGo, the mobile operating system Nokia created with partner Intel, has been chosen as the reference platform for the GENIVI (IVI stands for in-vehicle infotainment) car-industry alliance, which means MeeGo-based services could begin appearing in GENIVI member vehicles, such as those from GM and BMW, in 2011 or 2012. Such a boost, said Mawston, would help Nokia compete in the “multiplatform wars” against Android, Microsoft and others.

      Samsung, in second place, shipped 63.8 million handsets during the quarter. That figure was down from the 64.3 million it shipped during the quarter before, but was nonetheless enough to help it achieve 22 percent year-over-year growth.

      Strategy Analytics pointed to robust sales in North and South America, but soft sales in Europe. Research firm IDC, which reported second-quarter handset figures in a July 29 report, agreed with that assessment. Both firms pointed to good days ahead for Samsung, with the launch of its Galaxy S smartphones.

      “The combination of soft demand in Europe, late launches of key smartphone models and product mix adjustments resulted in revenue and profit decline for the quarter,” stated the IDC report. “Still, Samsung anticipates improvement during the second half of the year, as its highly anticipated Galaxy S smartphone series readies for launch and more touch-screen models are on the way.”

      LG shipped 30.6 million units during the quarter, for approximately 10 percent market share. IDC points to the launches of the Android-running Ally and Optimus Q phones as big contributors to sales, but adds that from a financial perspective, “LG’s revenue and profits declined sharply from a year ago, reflecting ASP declines from an aging portfolio and expenses incurred from R&D and marketing.”

      Fourth-place RIM posted the highest year-on-year growth-40 percent-of any of the top-five vendors and saw shipments of 11.2 million units. RIM has of late looked to international markets, such as those in Asia, Europe, Africa and South America for its strong sales, as it feels the pressure of Apple, Android and others in the United States. However, this may turn around a bit with the upcoming launch of the BlackBerry 6 OS, which Mawston describes as “sorely needed to improve [RIM’s] outlook in North America.”

      Just behind RIM, fifth-place Sony Ericsson shipped 11 million handsets, which was down 20 percent year over year but up 5 percent sequentially. IDC noted Sony’s growing emphasis on its smartphone platform for the quarter’s sales, though Strategy Analytics described that company’s services strategy as “still a little confusing” and its sub-brands, such as PlayNow Area, as needing attention.

      Apple shipped 8.4 million iPhones, up 61 percent from 5.2 million units a year ago. Still, Strategy Analytics described the quarter as “mixed.” While profits, revenue and shipments rose, so did public criticism of the company, following its “intensive production methods in China” and heavily criticized antenna design in the iPhone 4. Mawston reiterated Apple’s need to assure that “lost hearshare” doesn’t translate to lost market share.

      Bringing up the rear, with 8.3 million handset shipments to Apple’s 8.4 million, was Motorola. While volumes were half of what they were a year ago, wrote Mawston, they were offset by ASPs (average selling prices) that surpassed $200 for the first time in decade.

      “Motorola’s reincarnation as a smartphone specialist is broadly on track,” Mawston wrote, “with much riding on the success of the premium Droid X model over the coming months.

      Strategy Analytics is forecasting third-quarter handset shipments to reach 325 million units.

      IDC Senior Research Analyst Ramon Llamas expects that in the second half of the year vendors will put an even greater emphasis on smartphones. While results from the worldwide leaders shouldn’t be underestimated, said Llamas, “upward pressure from vendors outside the current Top 5 vendors, particularly Apple and Motorola, will provide tough competition in the quarters to come.”

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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