Smartphones Drive Strong Q2 Mobile Device Sales

Apple, HTC and Motorola each released new smartphones during the second quarter of 2010, helping to drive the total number of mobile devices shipped worldwide to 325.6 million, Gartner reported on 12 August.

Consumer appetites for such smartphones helped to push the overall mobile device sales tally up 13.8 percent, compared to a year earlier, and enabled the smartphone segment to capture 19 percent of overall mobile device sales — a jump of 50.5 percent from 2009’s second-quarter totals.

“Although the mobile communication devices market showed double-digit growth this quarter, average selling prices (ASPs) were lower than expected and margins fell,” Gartner Research Vice President Carolina Milanesi said in a statement. “We attribute the decline in ASPs to a stronger dollar, a depreciating euro and intense competition that drove price adjustments and changes to the product mix.”

Smartphone growth

During the quarter, HTC made its debut on the top-10 worldwide ranking list —grabbing the number eight spot with sales of 5.9 million units an 139.1 percent year-on-year growth — while Research In Motion again secured a spot in the top 5, knocking out Motorola. HTC’s strong showing, said Milanesi, reflects both the company’s effectively branding strategy and the popularity of Google’s Android operating system — which HTC has very aggressively adopted.

“Crucially, as we predicted, the sudden growth in media tablets, such as the Apple iPad, did not appear to hold back smartphone sales,” she said. “We believe that most tablet users still feel the need for a truly pocketable, yet highly capable, device for those situations when it’s inconvenient to carry a device with a larger form factor.”

RIM, fourth in overall devices sales and second in smartphone sales, moved 11.2 million BlackBerry smartphones during the quarter, for a 3.4 percent share of the overall market and an 18.2 percent share amongst smartphone sellers. Gartner points out that devices running the BlackBerry 6 OS (for now, namely the BlackBerry Torch) will begin shipping during the third quarter. While these new devices are expected to prevent a loss of customers, the firm is of the mind that neither will it win over any Android or Apple converts.

Apple, meanwhile, ranked seventh in the overall device market with sales of 8.7 million iPhones for 2.7 percent market share. Its sales would have been even higher, were it not for “tight inventory management in preparation for the arrival of the iPhone 4 at the end of the second quarter of 2010,” states the report. “Apple also suffered from some supply constraint on the new device.”

Through the rest of the year, however, Gartner expects the iPhone 4 to sustain the company’s sales momentum.

Quality and pricing

Nokia again held the number one position, with sales of 111.5 million units and 34.2 percent market share. In the smartphone-sales-only ranking, it likewise topped the list, this time with 41.2 percent market share.

However, “good quality, well-priced products were not enough to maintain Nokia’s leadership in the high-end sector,” stated the report. “This caused Nokia to lose 2.6 percentage points year-on-year.”

Second place during Q2 went to Samsung, which shipped 65.3 million units for 20.1 percent market share. And still, it may fare even better during the second half of the year, as it will be one of the first manufacturers to bring Windows Phone 7 devices to market during the fourth quarter — a move Gartner commended, writing that Samsung “continues to keep its platform options open, even as it works on its own Bada platform.”

LG Electronics came in third worldwide, with shipments of 29. 4 million units and 9 percent market share. Gartner called its approach — shared by Samsung — of pursuing market share in a low-margin market risky, and noted it didn’t pay off, as LG showed a decline of 27.7 percent in ASP during the quarter.

“Launches of updated operating systems will help maintain strong growth in smartphones in the second half of 2010 and spur innovation,” Milanesi said. ”But we believe market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers, and strong brand awareness with consumers and enterprise customers.”