The Apple Inc (NASDAQ: AAPL) iPhone line of smartphones has been an unqualified success, but the magnitude of that success has only just become clear. Research firm Strategic Analytics reports that cellphone sales rose 13% worldwide in the third quarter to 327 million units. Apple’s rise shows how quickly the handset market has changed.
Apple shipped 14.1 million handsets worldwide in Q3 2010, up a huge 91% versus last year. Apple jumped into the top five handset rankings for the first time and ranked fourth overall. Apple’s numbers allowed it to slip past RIM and Sony Ericsson. The research firm said the extraordinary success will continue as more and more iPhones are sold overseas. And, there is no reason to believe iPhone sales will slow as more and more carriers make agreements to offer the smartphone.
Nokia was the big loser in the period. It shipped 110.4 million handsets worldwide in Q3 2010, growing just 2% annually. This was the ninth consecutive quarter that Nokia has increased volumes below the market average. Strategic Analytics estimates Nokia’s global share of handset shipments dipped to 34% during the quarter from 37% a year earlier.
The other two mass market handset manufacturers also had only modest growth in shipments. Samsung shipped 71 million handsets worldwide during the third quarter of 2010. Its units shipped moved up 19% from 60.2 million units a year earlier. Samsung’s global market share reached 22% in Q3 2010, up from 21% in Q3 2009. LG shipped 28.4M handsets worldwide in Q3 2010, down 10% from 31.6M units a year earlier.
Research In Motion (NASDAQ:RIMM) shipped 12.4 million BlackBerry handsets worldwide in Q3 2010, up 46% annually. RIM’s global handset market share has doubled from 2% in Q3 2008 to 4% in Q3 2010. That performance is extraordinary, but could not match Apple’s.
The overall data from the study shows the extent to which companies like Nokia, without strong smartphone handsets, have been hurt as sales of smart phones have risen quickly. Inexpensive cellphones may help gain sales in developing and Third World nations, but smartphones sales are not only growing fast. These units have higher margins.
What is not as clear is that Nokia, Samsung, and LG face another threat they may not be able to ward off. The growth of the Google (NASDAQ: GOOG) Android mobile operating system has allowed smaller manufactures like HTC to pick up significant market share. The OS has also revived the fortunes of Motorola (NYSE: MOT), which was left for dead just two years ago.
The realignment of power within the industry may cause M&A activity. Samsung and LG might only be able to get important smartphone presence by offers to buy Motorola or Sony Ericsson. The largest companies could risk that they may develop their own smartphones to attack their smaller rivals like Apple, but the timeline for that product development could take quarters which the firms cannot spare.
Douglas A. McIntyre
Source: Strategic Analytics.
Q3 2010 Global Handset Shipments and Market Share Estimates – Top 5 Vendors
| Global Handset Shipments (Millions of Units) | Q1’09 | Q2’09 | Q3’09 | Q4’09 | 2009 | Q1’10 | Q2’10 | Q3 ’10 |
| Nokia | 93.2 | 103.2 | 108.5 | 126.9 | 431.8 | 107.8 | 111.1 | 110.4 |
| Samsung | 45.8 | 52.3 | 60.2 | 68.8 | 227.1 | 64.3 | 63.8 | 71.4 |
| LG | 22.6 | 29.8 | 31.6 | 33.9 | 117.9 | 27.1 | 30.6 | 28.4 |
| Apple | 3.8 | 5.2 | 7.4 | 8.7 | 25.1 | 8.8 | 8.4 | 14.1 |
| RIM | 7.3 | 8.0 | 8.5 | 10.7 | 34.5 | 10.6 | 11.2 | 12.4 |
| Others | 71.8 | 74.6 | 74.4 | 88.3 | 309.1 | 72.8 | 85.4 | 90.3 |
| Total | 244.5 | 273.1 | 290.6 | 337.3 | 1145.5 | 291.4 | 310.5 | 327.0 |
| Global Handset Vendor Marketshare % | Q1’09 | Q2’09 | Q3’09 | Q4’09 | 2009 | Q1’10 | Q2’10 | Q3 ’10 |
| Nokia | 38.1% | 37.8% | 37.3% | 37.6% | 37.7% | 37.0% | 35.8% | 33.8% |
| Samsung | 18.7% | 19.1% | 20.7% | 20.4% | 19.8% | 22.1% | 20.5% | 21.8% |
| LG | 9.2% | 10.9% | 10.9% | 10.1% | 10.3% | 9.3% | 9.9% | 8.7% |
| Apple | 1.6% | 1.9% | 2.5% | 2.6% | 2.2% | 3.0% | 2.7% | 4.3% |
| RIM | 3.0% | 2.9% | 2.9% | 3.2% | 3.0% | 3.6% | 3.6% | 3.8% |
| Others | 29.4% | 27.3% | 25.6% | 26.2% | 27.0% | 25.0% | 27.5% | 27.6% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Total Growth Year-over-Year | -13.4% | -8.1% | -4.3% | 14.8% | -2.7% | 19.2% | 13.7% | 12.5% |
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