BlackBerry & iPhone Dominate Smartphone Market, Positive Notes, Notes Gartner

blackberry-iphonesidebyside.jpgGartner has publihsed their worldwide mobile report.  Although there was a slight decline in total sales and single digit growth, the market is considered positive due to increased strong smartphone growth and low-end handset sales. RIM's BlackBerry was 19.9% and Apple's iPhone was 14.4% of the world smartphone market.

Worldwide mobile phone sales to end
users totalled 1.211 billion units in 2009, a 0.9 per cent decline from
2008, according to Gartner, Inc. In the fourth quarter of 2009, the
market registered a single-digit growth as mobile phone sales to end
users surpassed 340 million units, an 8.3 per cent increase from the
fourth quarter of 2008.

"The mobile devices market finished on a very positive note, driven
by growth in smartphones and low-end devices," said Carolina Milanesi,
research director at Gartner. "Smartphone sales to end users continued
their strong growth in the fourth quarter of 2009, totalling 53.8
million units, up 41.1 per cent from the same period in 2008. In 2009,
smartphone sales reached 172.4 million units, a 23.8 per cent increase
from 2008. In 2009, smartphone-focused vendors like Apple and Research
In Motion (RIM) successfully captured market share from other larger
device producers, controlling 14.4 and 19.9 per cent of the worldwide
smartphone market, respectively."

Throughout 2009, intense price competition put pressure
on average selling prices (ASPs). The major handset producers had to
respond more aggressively in markets such as China and India to compete
with white-box producers, while in mature markets they competed hard
with each other for market share. Gartner expects the better economic
environment and the changing mix of sales to stabilise ASPs in 2010.

Three of the top five mobile phone
vendors experienced a decline in sales in 2009 (see Table 1). The top
five vendors continued to lose market share to Apple and other vendors,
with their combined share dropping from 79.7 in 2008 to 75.3 per cent
in 2009.

Table 1
Worldwide Mobile Terminal Sales to End Users in 2009 (Thousands of Units)

Company

2009 Sales

2009
Market
Share (%)

2008 Sales

2008
Market
Share (%)

Nokia

440,881.6

36.4

472,314.9

38.6

Samsung

235,772.0

19.5

199,324.3

16.3

LG

122,055.3

10.1

102,789.1

8.4

Motorola

58,475.2

4.8

106,522.4

8.7

Sony Ericsson

54,873.4

4.5

93,106.1

7.6

Others

299,179.2

24.7

248,196.1

20.3

Total

1,211,236.6

100.0

1,222,252.9

100.0

Note* This table includes iDEN shipments, but excludes ODM to OEM shipments.
Source: Gartner (February 2010)

In 2009, Nokia's annual mobile phone
sales to end users reached 441 million units, a 2.2 per cent drop in
market share from 2008. Although Nokia outperformed industry
expectations in sales and revenue in the fourth quarter of 2009, its
declining smartphone ASP showed that it continues to face challenges
from other smartphone vendors. "
Nokia will face a tough first
half of 2010 as improvement to Symbian and new products based on the
Meego platform will not reach the market well before the second half of
2010," said Ms Milanesi. "Its very strong mid-tier portfolio will help
it hold market share, but its ongoing weakness at the high end of the
portfolio will hurt its share of market value."

Samsung was the clear winner among the top five with market share
growing by 3.2 percentage points from 2008. This achievement came as a
result of improved channel relationships with distributors to extend
its reach and better address the needs of individual markets as well as
a rich mid-tier portfolio. For 2010, the company is putting a focus on
Bada, its new operating system (OS) that aims at adding the value of an
ecosystem to its successful hardware lineup.

Motorola sold slightly more than half of its 2008 sales
and exhibited the sharpest drop in market share, accounting for 4.8 per
cent market share in 2009. "Its refocus away from the low-end market
limited the volume opportunity, but should help it drive margins going
forward. Motorola's hardest barrier is to grow brand awareness outside
the North American market, where it benefits from a long-lasting
relationship with key communications service providers (CSPs).

In the smartphone OS market, Symbian continued its lead, but its share dropped 5.4 percentage points in 2009 (see Table 2).
Competitive pressure from its competitors, such as RIM and Apple, and
the continued weakness of Nokia's high-end device sales have negatively
impacted Symbian's share.

At Mobile World Congress 2010, Symbian Foundation
announced its first release since Symbian became fully open source.
Symbian^3 should be made available by the end of the first quarter of
2010 and may reach the first devices by the third quarter of 2010,
while Symbian^4 should be released by the end of 2010.

"Symbian had become uncompetitive in recent years, but
its market share, particularly on Nokia devices, is still strong. If
Symbian can use this momentum, it could return to positive growth," said Roberta Cozza, principal research analyst at Gartner.

Table 2
Worldwide Smartphone Sales to End Users by Operating System in 2009 (Thousands of Units)

Company

2009 Units

2009
Market
Share (%)

2008 Units

2008
Market
Share (%)

Symbian

80,878.6

46.9

72,933.5

52.4

Research In Motion

34,346.6

19.9

23,149.0

16.6

iPhone OS

24,889.8

14.4

11,417.5

8.2

Microsoft Windows Mobile

15,027.6

8.7

16,498.1

11.8

Linux

8,126.5

4.7

10,622.4

7.6

Android

6,798.4

3.9

640.5

0.5

WebOS

1,193.2

0.7

NA

NA

Other OSs

1,112.4

0.6

4,026.9

2.9

Total

172,373.1

100.0

139,287.9

100.0

Source: Gartner (February 2010)

The two best performers in 2009 were
Android and Apple. Android increased its market share by 3.5 percentage
points in 2009, while Apple's share grew by 6.2 percentage points from
2008, which helped it move to the No. 3 position and displace Microsoft
Windows Mobile.

"Android's success experienced in the fourth quarter of
2009 should continue into 2010 as more manufacturers launch Android
products, but some CSPs and manufacturers have expressed growing
concern about Google's intentions in the mobile market," Ms Cozza said.
"If such concerns cause manufacturers to change their product
strategies or CSPs to change which devices they stock, this might
hinder Android's growth in 2010."

"Looking back at the announcements
during Mobile World Congress 2010, we can expect 2010 to retain a
strong focus around operating systems, services and applications while
hardware takes a back seat," said Ms Milanesi. "Sales will return to
low-double-digit growth, but competition will continue to put a strain
on vendors' margins."

Additional information is in the Gartner report
"Competitive Landscape: Mobile Devices, Worldwide, 4Q09 and 2009." The
report is available on Gartner's website at www.gartner.com.