Nokia Retains Smartphone Lead, Says IDC

Market researcher IDC has placed Nokia as leading the smartphone market – a sector that is poised for continued growth.

In a report 5 May, IDC analysts said the smartphone market saw nearly 100 million units shipped in the first quarter, and thanks to a number of factors, that number will continue to go up for the foreseeable future.

“Conditions in the smartphone market are creating a perfect storm for sustained smartphone growth,” Ramon Llamas, an IDC senior research analyst, said in a statement. “First, vendors are increasingly emphasising smartphones as the key to their own growth. Second, selection has proliferated from mostly high-end devices to include more mid-range and entry-level offerings,”

And third, Llamas added, “pricing has become increasingly competitive, with even high-end devices available at low price points.”

Smartphone Growth

That continued interest in smartphones was put on display in the first quarter. Pointing to the arrival of several anticipated devices, older smartphones being offered at reduced prices and sustained consumer interest, IDC reported that the sales figures for the quarter was nearly double that of the same period a year ago – rising from 55.4 million units in the first quarter 2010 to 99.6 million last quarter.

Apple and HTC each posted record shipment numbers, and Samsung enjoyed the highest year-over-year growth rate among the top five vendors, posting an increase of 350 percent since the first quarter of 2010. Nokia, the longtime but faltering market leader, posted a positive 12.6 percent year-over-year growth rate, though it has No. 2 finisher Apple – which it bested by less than 6 million units – close over its shoulder.

Nokia’s newest plan for a comeback, in addition to switching from Symbian to Microsoft’s Windows Phone as its primary OS, echoes Llamas’ second point. To compete against the rising numbers of Android-running handsets – which more than the Apple iPhone is now Nokia’s biggest competition, Nokia CEO Stephen Elop has said – the company is planning to offer a number of handsets at a variety of price points.

Under Pressure

Despite Nokia’s plan to eventually step away from Symbian, it introduced two high-end – and apparently successful – Symbian-running smartphones during the quarter.

“Demand for Symbian-powered smartphones remained strong within its traditionally strongest markets of EMEA and Asia/Pacific, and the company continues to announce more devices running on Symbian, including the E6 and the X7,” said Llamas. “Still, as Nokia transitions from Symbian to Windows Phone, it may find itself in danger of ceding market share as the competition ramps up smartphone production.”

Apple, with the No. 1 spot in its sights, posted market-beating year-over-year growth, as well as triple-digit growth in the United States and China.

In addition, continued strong sales are no doubt ahead, with the company additionally bringing on board South Korean Telecom and Saudi Telecom as iPhone providers, according to IDC.

Samsung/HTC

RIM was solid enough during the quarter, posting 31 percent growth and shipping nearly 14 million units, but the more exciting performances came from Samsung and HTC, following it in fourth and fifth places, respectively. IDC noted Samsung’s multi-OS approach, and that its Windows Phone and bada-powered devices continue to gain traction, but said the majority of its sales nonetheless came from its Android-running Galaxy S smartphones – a follow-up to which is already on the way.

As for HTC, it closed in on the 10-million-units mark, shipping 8.9 million during the quarter, compared with 2.7 million units a year ago. Helping to differentiate its devices in a crowded market, said IDC, were its Sense user interface and developments and investment in its hardware and displays.

Smartphones are answering consumers’ desire for “greater utility” from their phones, and the same factors that helped the smartphone market start the year strong, said Llamas, will “add up to continued smartphone growth throughout the year.”