Business Wire – Thu Jul 30 07:23:00 CDT 2009
Smartphone Growth Encouraging, Yet the Worldwide Mobile Phone Market Still Expected To Shrink in 2009, Notes IDC
FRAMINGHAM, Mass. (BUSINESS WIRE) --
The worldwide mobile phone market recorded another quarter of year-over-year decline in the second quarter of 2009 (2Q09). According to IDC's Worldwide Quarterly Mobile Phone Tracker, handset vendors shipped a total of 269.6 million units worldwide, down 10.8% from 302.2 million units in 2Q08. The second quarter results are an improvement from the 17.2% decrease seen during 1Q09, but ongoing challenges stemming from the economic crisis remain a factor to watch.
"The challenges from the previous nine months – aggressive channel destocking, foreign exchange volatility, and uncertain demand – continued to plague the mobile phone market in the second quarter, but were not as severe as before," says Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "Those vendors who were able to adjust quickly were rewarded with greater shipment volumes. Although this tested the handset vendors' abilities to hit a moving target, customers reaped the benefits of lower-costs, even on key high-end devices."
For the full year, IDC believes that the market will decline 13%, with the market outlook for 2009 remaining relatively consistent among the top vendors. The small signs of improvement were centered around consumer demand for high-end handsets and the manufacturers' ability to shift portfolio to meet these needs.
"Among the big handset vendors, Nokia, Samsung, Research In Motion, and Apple, all beat expectations for smartphones within the second quarter," said Ryan Reith, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker. "This demand for high-end mobile phones has created a price war among large mobile operators and handset vendors. Apple's price cut on the iPhone 3G reflects a trend we expect to continue in the upcoming quarters, and one that will effectively maintain competitive pricing within mature markets."
Top Five Mobile Phone Vendors
Nokia finished 2Q09 with shipments back above the 100 million unit mark. Launches of key devices, including the E71, N97, and the 5800 converged mobile devices, mitigated further ASP decline and operational efficiency resulted in healthy gross margins overall. Nokia's shipment volumes were roughly equal to those of the next three vendors by the end of the quarter. While still substantial, this is nevertheless down from a year ago when Nokia's shipments were nearly equal to the next four vendors' combined total shipments. While CEO Kallasvuo was pleased with the overall results and the company's traditional advantages, he also highlighted Nokia's ability to shape the evolving wireless landscape, combining mobile devices and the Internet with Nokia's strong operations, ecosystems, customer relationships, and metrics to track success.
Samsung saw its shipment volumes edge back above the 50 million unit mark on the strength of its broad product portfolio and was rewarded with the highest year-over-year gain among leading vendors. Its touch-screen and messaging devices continued to find a warm reception in Europe and North America while feature-capable devices and slim form factors attracted customer attention in emerging markets. Meanwhile, operating margins returned to double digits despite higher marketing expenses. By the end of 1H09, Samsung was nearly halfway to its goal of shipping 200 million units in 2009.
LG Electronics maintained its momentum from 1Q09 to gain market share and improve profitability. Driving its success was a strong portfolio of mid-tier and newly-introduced high-end devices as well as overall operational efficiency. LG also unveiled plans to improve its converged mobile device presence, with the launch of the GM730 this summer and up to five models by the end of this calendar year. Over the next two years, LG hopes to capture 10% of the converged mobile device market.
Motorola posted another quarter of operating losses as well as the largest year-over-year decline among the leading vendors. Not to be overlooked, however, is its significant improvement in reducing those losses 50% from the previous quarter. The company also made progress filling in some of the gaps in its product portfolio with the launch of several messaging devices. These include the Clutch i465, Karma QA1 and the Rival A455. Moreover, plans to release Android-powered converged mobile devices during 2H09 appear to be on track and gained further clarity with the rollout for accelerated application development with its MOTODEV program.
Sony Ericsson's challenges in the mobile phone market continued, earning the company a fifth place finish in 2Q09 while falling further behind Motorola. Ongoing cost reductions, competitive pressures in key regions, and an aging product portfolio resulted in a gross margin of just 12%, but nonetheless an improvement from the 8% in the previous quarter. Sony Ericsson announced plans it hopes will bear fruit later this year, including the launch of its GreenHeart and Communication Entertainment product lines, as well as enhanced content, services, and applications for consumers.
Top Five Mobile Phone Vendors, Shipments, and Market Share, Q2 2009
(Units in Millions)
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 30, 2009
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Mobile Phones – These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text-messaging capability. Mobile phones may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Mobile phones exist at all points along the form factor, price point, and feature set continua. Mobile phones that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category.
For more information about IDC’s Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or firstname.lastname@example.org.
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 45 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
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