Smartphone Sales Surge as Apple Picks Up Share

Apple Inc.’s (NASDAQ: AAPL) share of the smartphone market rose 60% in the first quarter of 2010 as sales for the entire industry grew 57%. The total handset market grew only 22% during the same period and smartphones are now 19% of all handsets sold, according to industry research group IDC.

Apple market share rose to 16.1% to 10.9% in the same period in the first quarter of 2009. Its unit sales were up 132% to 8.8 million.

The new data also shows how much handset companies like Nokia (NYSE: NOK) and Research-in-Motion (NASDAQ:RIMM) are being left behind.

RIM’s share dropped from 20.9 % to 19.5%. Nokia’s share flat at 39.3%.

The problems of the two companies are very different. Nokia is the largest handset company in the world with about 33% of the 1.2 billion units that are forecast to be sold this year. It has dominated the middle level and inexpensive handset market for years, but it has yet of launch a highly successful product like the iPhone.

RIM, however, has been the dominant smartphone company particularly in the enterprise part of the market. It Blackberry device continues to sell well in that segment. But iPhones and Google Inc (NASDAQ: GOOG) Android powered handsets have started to take over the consumer segment of the smartphone market. RIM has tried to compete in that area, but has had limited success. It will launch its new BlackBerry OS 6.0 in a few weeks, but that will have to be much more successful than the Curve 8520 and BlackBerry Bold 9700 if the RIM is to gain more customers.

Apple’s success is likely to be ongoing. Analysts estimate the sales of the iPhone will continue to rise sharply as the handset is available in more markets outside the US. The company may launch an update version of the phone next month.

Douglas A. McIntyre