Smartphones Lead Mobile Phone Sales Higher

Equipment manufacturers are selling a lot of cell phones, thanks in large part to the growing popularity of smartphones. Worldwide mobile phone sales totaled 417 million units in the third quarter of 2010, a 35 percent increase from the third quarter of 2009, according to Gartner, Inc.

When you drill down into the numbers, Smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 percent of overall mobile phone sales in the third quarter of 2010. Clearly, the way consumers use cell phones has changed.

"This is the third consecutive double-digit increase in sales year-on-year, indicating that consumer demand is healthy," said Carolina Milanesi, research vice president at Gartner. "This quarter saw Apple and Android drive record smartphone sales. Apple's share of the smartphone market surpassed Research In Motion (RIM) in North America to put it second behind Android while Android volumes also grew rapidly making it the No. 2 operating system worldwide."

Although the top three worldwide mobile device manufacturers Nokia, Samsung and LG remained the same - albeit with reduced market share - the third quarter saw Apple rise into the top five manufacturers, surpassing RIM for fourth place.

Expanding the space

Smartphones are devices that go beyond voice communication and texting, the mainstay of cell phones for the last decade. Smartphones allow you to access email and the Internet. A growing number of apps provide specialized web-based functions as well.

In addition to strong growth of smartphone sales in mature markets, increasing sales of white-box products - those without a registered brand - in some emerging regions drove sales of mobile phones upward once again.

"In the third quarter, white-box manufacturers continued to expand their reach outside of China into markets such as India, Russia, Africa and Latin America," said Milanesi. "We firmly believe this phenomenon will not be short-lived as we still see a continued need for non-3G devices. Although we have seen acceleration in sales this quarter, we expect an even bigger volume in the fourth quarter of 2010."

The rise of white-box manufacturers from Asia has also helped the 'Others' section, as a proportion of overall sales, increasing its market share to 33.0 percent in the third quarter of 2010.

Profound effect

"This is having a profound effect on the top five mobile handset manufacturers' combined share that dropped from 83 percent in the third quarter of 2009 to 66.9 percent in the third quarter of 2010, Milanesi said.

The top five selling mobile phone manufacturers in the third quarter are:

1. Nokia
   
2. Samsung
   
3. LG
   
4. Apple
   
5. Research In Motion
   

Apple's move to the fourth position is all the more impressive since its iPhone only operates on one network, AT&T. The other manufacturers make devices that operate on more than one network.

In the third quarter smartphones accounted for record sales of more than 81 million communication devices. Android accounted for 25.5 percent of worldwide smartphone sales, making it the No. 2 operating system (OS). It was particularly dominant in North America.