The worldwide mobile phone market grew 19.8% year over year in the first quarter of 2011 (1Q11) fueled by high smartphone growth, especially in emerging markets, and gains made by market challengers. According to the International Data Corporation (IDC) Worldwide Mobile Phone Tracker, vendors shipped 371.8 million units in 1Q11 compared to 310.5 million units in the first quarter of 2010.
Smartphone growth worldwide, particularly in Asia/Pacific (excluding Japan), Middle East and Africa (MEA), and Latin America, helped lift the overall market to a new first-quarter high. Increasingly, mobile phone makers and carriers are making smartphones affordable to a wider variety of people, which has helped drive the market to new heights. Smartphone-specific vendors, such as HTC, continue to grow sales at a steady clip as a result of this trend.
"Several notable vendors, including feature phone makers, outpaced the overall market, which contributed to share losses of some top suppliers," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker. "The growth of companies outside the top 5 vendors � vendors in the 'Others' category, such as Micromax, TCL-Alcatel, Huawei, and Research In Motion � shows that the overall market is still very much ripe for share gains."
"At the same time, feature phones have represented the majority of mobile phone shipments, but still are under tremendous pressure from smartphones," adds Ramon Llamas, senior research analyst with IDC's Mobile Phone Technology and Trends team. "Even popular quick-messaging devices (phones with a QWERTY keyboard), once a bright spot within the feature phone market, appear to be losing steam as smartphones gain popularity. Still, IDC does not expect feature phones to disappear quickly as there is still strong demand across the globe."
Market Outlook
Nonetheless, IDC expects almost all of the worldwide mobile phone market's growth to be driven by smartphones throughout the forecast, which goes to 2015. "Increasingly smartphones will drive market growth. This means feature phone makers will either need to become smartphone dependent or consolidate that part of the market," noted Restivo.
Regional Analysis
The Asia/Pacific market grew thanks in part to strong mobile phone shipments to Greater China despite the seasonally slow quarter. Smartphone shipment growth was exceptional despite some key product launch delays. In Japan, the market underperformed IDC's forecast due to the impact of the earthquake and tsunami. Japan's largest mobile operators ordered fewer phones than expected in March.
In Western Europe, Android-based phones and iPhones helped grow the market in the seasonally slow quarter. New devices from HTC, Samsung, and Sony Ericsson sold well in most countries in the high-end tiers. Alcatel, Huawei, and ZTE Android devices helped drive mid-tier segment sales volume. Meanwhile, feature phone shipments receded as more smartphones hit the market. The CEMA markets performed well on a year-over-year basis despite civil unrest in some Gulf countries, such as Egypt, where sales were negatively impacted by the turbulence. Nokia and Research In Motion performed well in the regions overall.
In the United States last quarter, Apple's iPhone and the LTE-enabled HTC Thunderbolt were two smartphones introduced at Verizon Wireless that helped keep the category front and center of the overall mobile phone market. Feature phones, including once popular quick messaging devices, continued to lose ground. Similarly, in Canada, the market grew thanks to smartphones. BlackBerry, iPhone, and Android devices were best sellers.
The Latin America market growth continued last quarter as the gap between smartphones and feature phones narrowed. Smartphone shipments were aided by carriers, who are moving customers to 3G networks while vendors shipped more touchscreen and QWERTY models. New Android and Windows Phone devices were launched too, which helped drive smartphone growth. The average selling prices also declined in the region, thanks to aggressive expansion by Chinese vendors.
Top Five Mobile Phone Vendors
Nokia laid out its transformation strategy during the quarter, one that will embrace Windows Phone as its primary smartphone operating system, introduce further enhancements to its mobile phones, and invest in future disruptions to the mobile phone market. Until that strategy is fully realized, the company will rely on its current platforms to compete in the market. Its Symbian-powered smartphones continued to find a warm reception, and the company introduced the E6 and X7, both running on the new Symbian Anna software. In mobile phones, Nokia ramped up shipments of its C3 and X201 from last year and announced a dual-SIM phone with the C2. What remains to be seen is how quickly Nokia will introduce new phones as competition intensifies.
Samsung having posted a record Q1 shipment volume, further closed the gap against market leader Nokia and extended its lead ahead of third place vendor LG Electronics. Although feature phones comprised the majority of its shipments, smartphones represented a greater share from a year ago, nearly a fifth of its total volumes. Samsung appears well poised to reach its goal of 50 million smartphones shipped this year, as new models, including the Galaxy S II, 4G smartphones, and more mass-market smartphones are expected to reach the market later on.
LG unit shipments declined on a year-over-year basis for the third straight quarter. The phone shipment drop off was most noticeable in Europe and the CIS countries where shipments on a combined basis declined. The company hopes to deliver a better second quarter performance with the introduction of products such as the Revolution, which will run on the LTE network of Verizon Wireless, and the Big. The question for LG will be whether feature phone declines in emerging and other markets can be offset by smartphone gains in future.
Apple maintained its number 4 spot on IDC's Top 5 list thanks to a record quarter for unit shipments. The company posted the highest growth rate of the worldwide leaders. Apple's results were buoyed by strong sales on Verizon Wireless and additional carrier deals; the company is now on 186 carriers operating in 90 countries. The iPhone once again sold particularly well in developed economic regions of the world, such as North America and Western Europe.
ZTE held on to the number 5 slot in the rankings thanks to strong year-over-year growth in countries and regions where it does particularly well, such as China and Latin America. ZTE primarily sells low-cost feature phones but the company is making a concerted effort to ship more smartphones, which are based on the Android operating system, this year. The company has said it will try to create brand awareness and sell more devices in developed markets, such as the U.S., this year.
Top Five Mobile Phone Vendors, Shipments, and Market Share, Q1 2011 (Units in Millions)
Vendor
1Q11 Shipments
1Q11 Market Share
1Q10 Shipment Volumes
1Q10 Market Share
1Q11/1Q10 Change
Nokia
108.5
29.2%
107.8
34.7%
0.6%
Samsung
70.0
18.8%
64.3
20.7%
8.9%
LG Electronics
24.5
6.6%
27.1
8.7%
-9.6%
Apple
18.7
5.0%
8.7
2.8%
114.9%
ZTE
15.1
4.1%
10.4
3.3%
45.2%
Others
135
36.3%
92.2
29.7%
46.4%
Total
371.8
100.0%
310.5
100.0%
19.8%
Source: IDC Worldwide Mobile Phone Tracker, April 28, 2011
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.
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Worldwide Mobile Phone Market Grew Nearly 20% in the First Quarter; Smartphones and Vendors Outside the Top 5 Keys to Growth, According to IDC
