Worldwide mobile phone sales totalled 308,9-million units in the third quarter of 2009, a 0,1% increase from the third quarter of 2008, according to Gartner. Smartphone sales surpassed 41-million units, a 12,8% increase from the same period last year, and Apple overtook Research in Motion (RIM) in Western Europe for the first time since the launch of the iPhone.
“The third quarter of 2009 saw the announcement of many new mobile devices, including several Android smartphones ready for the holiday season in the fourth quarter, but hardware commoditisation and the growth in open platforms will make it harder for them to stand out,” says Carolina Milanesi, research director at Gartner. “Meanwhile, the channel slowed its inventory-reduction efforts so while some sales volumes increased, average selling prices (ASPs) stagnated. We expect pressure on ASP to continue into 2010.
“Many devices will reach the market in time for Christmas, and mobile carriers will run incentives for consumers during the holidays. We expect sales of mobile devices in the fourth quarter of 2009 to show year-over-year growth,” says Milanesi. ”As many vendors and industry watchers call for a decrease in sales into the channel, our sell through data is showing that 2009 performance will be flat rather than down over 2008.”
Grey market sales are no longer limited to China. All manufacturers have to compete with grey market players as they expand into emerging markets in Asia/Pacific, Eastern Europe, The Middle East and Latin America.
In addiion, grey market devices are no longer just ultra-low cost models. Gartner has torn down several grey-market products that showcase enhanced-phone features.
Open platforms have been a hot topic in 2009. At first they appear to spell an end to market fragmentation, but when manufacturers adopt a standard software platform, they risk losing the ability to differentiate themselves.
As a result, says Gartner, individual open platforms will fragment as manufacturers strive to compete. Android already demonstrates this trend: individual manufacturers have deployed their own user interfaces such as HTC Sense and some like Motorola's Motoblur, go deep into the part of the operating systems (OS) that manages contact information.
Nokia still leads the market, with a 36,7% market shaer, although this is down from last year's 38,2%. It is followed by Samsung, with 19,1%; LG, with 10,3%; Motorola, with 4,5%; and Sony Ericsson, with 4,3%.
Nokia's market share declined 1,5 percentage points year-on-year due in part to component shortages that may continue into the fourth quarter. It also faced pressure at the high end from competitors' new smartphones, so even as it rolled the N97 out to more countries in the third quarter of 2009, its ASP remained flat quarter-on-quarter at €62. Nokia should have strong end-of-year volumes as a result of good mid-tier products like the 5530 and 5230, but consumers seeking to upgrade to a high-end device may look elsewhere over the Christmas holiday sales, says Gartner.
Samsung had a strong third quarter of 2009 with touchscreen devices, qwerty phones and smartphones driving sales in the mature markets of Western Europe and the US. It also refreshed older products making steady sales in emerging markets. The introduction of mid-tier products such as Corby will help during the Christmas sales season. LG showed solid performance across the market with its competitively priced touchscreen and messaging phones like the Cookie and KS360 but most of its sales were of mid-tier phones, in part due to its lack of a smartphone portfolio.
Motorola had a difficult third quarter 2009 as the market waited for products that it planned to launch in the fourth quarter. Similarly, Sony Ericsson's sales deteriorated further in the quarter as strong competition almost halved its market share and the vendor built a slight inventory during the quarter.
Smartphone sales are still led by Nokia, with 39,3% market share, down from 42,3% last year. RIM holds a 20,8% market share, up from 15,9% in 2008. Apple has 17,1% share, up from 12,9% last year, whie HTC holds 6,5% of the market and Samsung 3,2%.
“Smartphones continued to represent the fastest-growing segment of the mobile-devices market and we remain confident about the potential for smartphones in the fourth quarter of 2009 and in 2010,” says Milnesi.
In the smartphone operating system market, Android picked up momentum but, with only a handful of Android devices available, its share remained modest at 3,5%. Windows Mobile 6.5 only became available in October, too late to have an impact on the third quarter, so sales of Windows-based smartphones saw another decline.
"Manufacturers should work to differentiate their user interfaces by creating distinct ways of organising users’ information and services," says Roberta Cozza, principal analyst at Gartner. “However, they need to be careful to maintain application compatibility.”