Gartner: Worldwide Smartphone Sales Reached Lowest Growth Rate with 11.5% Increase in 3Q 2008
December 15, 2008 // Published as a news service by IHS
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In 3Q 2008, the global smartphone market reached its weakest year-on-year growth since Gartner Inc. began tracking the industry.
Worldwide smartphone sales to end-users totaled 36.5 million units in 3Q 2008, an 11.5% increase from the same period in 2007.
"The current economic climate is negatively impacting sales of higher-end devices," said Roberta Cozza, principal analyst at Gartner.
"Going forward, we should expect the smartphone device market to continue to grow but at a slower pace. Although leading mobile operators are subsidizing more smartphones, to reach lower prices they tie the device to two-year contracts with monthly data plan rates which remain too expensive for the mainstream user," she said.
Nokia maintained its No. 1 position with 42.4% market share in 3Q 2008, but for the first time, it recorded a decline in sales of 3% year on year.
"Nokia is feeling the pressure from increased competition in the consumer smartphone market," Cozza said.
"The company introduced solid Nseries products with top features, but its lack of a commercial touch-screen device in its smartphone portfolio prevented Nokia from capitalizing from consumer demand for this feature," Cozza said.
"The recently announced N97 is a much needed evolution for the n9x series of products. It is unfortunate that the device will not be available before the first half of 2009 as this is a competitive product in today's market," she said.
Sales of Research In Motion's (RIM's) BlackBerry smartphones increased 81.7% in 3Q 2008. According to Gartner, RIM continued to expand its presence within the consumer segment and refreshed its portfolio with new models and form factors. RIM sales will receive a boost from new products in 4Q 2008. Analysts said the Storm is RIM's most important product launch to date and has the potential to be a major product for the company.
Apple regained its No. 3 position in the global smartphone market and improved its market share to 12.9% in 3Q 2008 with shipments into the channel approaching 7 million units.
However, Apple built up around 2 million units of inventory, and Gartner said its sales unit estimate reflects this. Apple's sales increased more than four times compared with the same period in 2007 as a result of wider geographical availability, new business model and lower pricing, Gartner said.
For the smartphone operating system (OS) market, Symbian had 49.8% of the global sales to end-users in 3Q 2008, and for the first time, its share went below the 50% mark. Gartner said Nokia's decline in smartphone sales during the quarter and continued weakness of the Japanese mobile device market have affected Symbian's share. Gartner expects the Symbian share to continue to erode next year, but the company will maintain its leading position in the market.
iPhone 3G sales in 3Q 2008 propelled the Mac OS X to the No. 3 position in the global OS provider rankings. For the first time, iPhone sales exceeded sales of Microsoft Windows Mobile devices worldwide and in North America.
In the shorter term, open-source initiatives like Android and Symbian Foundation will challenge the Windows Mobile licensing model, according to Gartner. In addition, the lack of a competitive user interface will continue to limit Microsoft mobile device usability when facing consumer smartphones.
"In 2009, application portfolios will become one of the key strategic considerations for smartphone market players, and if successful, they deliver an alternative revenue stream and will improve consumer stickiness," Cozza said.
On a regional level, North America was the fastest-growing market, with a 68% increase in 3Q 2008. RIM and Apple did well in the region with both vendors accounting for more than 70% of the smartphone market in 3Q 2008.
Apple regained second position behind RIM with 25.4% market share. Smartphone sales in Europe, the Middle East and Africa (EMEA) increased 14% year on year. The region saw Nokia's share decline nearly 8 percentage points in 3Q 2008 - but still maintaining its leading position - and saw Apple gain the No. 2 spot with 15.6%, moving in front of HTC and RIM.
The markets in Asia/Pacific and Japan declined 11% and 23%, respectively in 3Q 2008. In Latin America, despite the decline in sales for all handsets, the smartphone market grew 56% during the quarter. The sales were bolstered by the introduction of the Apple iPhone 3G across a dozen countries.
For more information about the Gartner report, titled Market Share: Smartphones, Worldwide, 3Q08, go to the Gartner web site.
Source: Gartner Inc.