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August 11, 2011

Smartphone Growth up 74 Percent; Apple and Google 'Clear Winners': Gartner

Global mobile devices sales totaled 428.7 million units sold in the second quarter of 2011, with sales of smartphones up 74 percent year-on-year, accounting for 25 percent of overall sales in the second quarter of 2011.

According to a Gartner analyst, smartphone sales continued to rise at the expense of feature phones.

“Consumers in mature markets are choosing entry-level and midrange Android (News - Alert) smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions,” said Roberta Cozza, principal research analyst at Gartner. “However, replacement sales in Western Europe showed signs of fatigue as smartphone sales declined quarter-on-quarter.

While Nokia’s sales in the second quarter were low, Apple continues to exceed analyst predictions, Gartner said, even though the iPhone (News - Alert) 4 will soon be replaced by a new model.

According to Gartner’s findings, part of Apple’s growth came from the 42 new carriers and 15 new countries that it entered in the second quarter of 2011, which brought its total coverage to 100 countries.

“This expansion caused its inventory to grow a little by the end of the second quarter of 2011, when sales to end users stood at 19.6 million units. In mainland China, Apple (News - Alert) is the seventh-largest mobile phone vendor and the third-largest smartphone vendor,” according to a statement released by Gartner.

In the smartphone ecosystem, Gartner said Google and Apple are the “obvious winners.”

The combined share of iOS and Android in the smartphone operating system market doubled to nearly 62 percent in the second quarter of 2011, up from just over 31 percent compared to the same quarter in 2010.

Nokia’s (News - Alert) low sales into the channel in the second quarter of 2011 is attributed in part to a “very competitive” market that deflated demand for Symbian, but also to inventory management issues in Europe and China in particular, Gartner said.

Cozza said that sales efforts of the channel, combined with Nokia’s greater concentration in retail and distributors’ sales, saw Nokia destock more than 9 million units overall and 5 million smartphones, which helped it hold on to its position as the leading smartphone manufacturer by volume.

“However, we will not see a repeat of this performance in the third quarter of 2011, as Nokia’s channel is pretty lean,” Cozza predicted.

While Samsung (News - Alert) saw strong growth in the second quarter, BlackBerry maker Research in Motion’s share of the smartphone market declined to 12 percent in 2Q11, compared to 19 percent in 2010.

Samsung achieved strong growth in sales of mobile devices, with its Galaxy S II selling well, racking up 5 million sales by the end of July.

RIM also lost its No. 5 position in the worldwide ranking of mobile device vendors to ZTE, according to Gartner, due to demand for RIM’s devices “impaired by an ageing portfolio and delays in shipping products.”

Gartner said that in the coming months, RIM will face increased competition to its messaging offering and manage a platform migration from BlackBerry 7 to QNX.

Based on current economic conditions, manufacturers and will be cautious about raising their stock levels in the second half of 2011, according to Annette Zimmermann, principal research analyst at Gartner. The research firm predicts sales of mobile devices to grow around 12 percent in 2011.

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Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TMCnet, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Rich Steeves


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