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Cheap smartphones on the rise

Kathryn McConnachie
By Kathryn McConnachie
Johannesburg, 25 Jan 2013

While Samsung and Apple are still sitting pretty at the top of the smartphone market, new market data shows there is still ample opportunity for competitors.

According to the International Data Corporation's (IDC's) quarterly mobile phone tracker for the fourth quarter of 2012, manufacturers of lower-cost smartphones are finding their footing in the market.

Senior research analyst at IDC, Kevin Restivo, says: "Vendors with unique market advantages, such as lower-cost devices, can rapidly gain market share, especially in emerging markets. A good example is Huawei, which overtook LG as a top five vendor in the overall mobile phone market and passed HTC to become a top five smartphone vendor."

Huawei is among the top three smartphone vendors globally for the first time in its history, with 10.8 million smartphones shipped in the fourth quarter. ZTE also had a strong quarter, with 9.5 million smartphones shipped. By comparison, the top smartphone vendor globally, Samsung, shipped 63.7 million smartphones, while Apple followed with 47.8 million iPhones shipped.

Research manager for IDC's mobile phone team, Ramon Llamas, says: "The fact that Huawei and ZTE now find themselves among the top five smartphone vendors marks a significant shift for the global market.

"Both companies have grown volumes by focusing on the mass market, but in recent quarters they have turned their attention toward higher-end devices. In addition, both companies have pushed the envelope in terms of industrial design with larger displays and smaller form factors, as well as innovative applications and experiences."

According to IDC, ZTE remains among the top five smartphone vendors globally due to its continued efforts in international diversification. "[ZTE] also shipped more smartphones than feature phones for the first time," says IDC, adding that the company has grown its smartphone sales primarily due to the surge in low-cost smartphone sales in emerging markets.

"The company has traditionally relied on sales of phones to China, where the company is based. Notable progress has been made in developed markets too," says IDC.

Two-horse race on top

Worldwide, the mobile phone market grew 1.9% year on year in Q4, with a total of 482.5 million mobile phones shipped. A total of 45.5% (219.4 million) of all mobile phone shipments were smartphones - which IDC says is the highest percentage ever.

"On an annual basis, 545.2 million smartphones were shipped globally in 2012, which was 10.1% more than in 2011," says IDC.

At the top end of the spectrum, IDC says Samsung set a record for the number of smartphones shipped in a single quarter and in a single year. "Its broad and deep line-up of Android smartphones, particularly the Galaxy-branded Android family, combined with sustained demand for its mid-range and entry-level models, account for the remarkable shipment volumes."

IDC says Apple's record iPhone shipments in Q4 were largely driven by growth in the Chinese market, where shipments more than doubled. "Interestingly, the company's success was due in large part to older models, in particular the iPhone 4, which Apple couldn't make enough of in the quarter relative to demand. Its sales success with the older model could portend success in higher-growth emerging markets where the company has performed well," says IDC.

Under pressure

Nokia has dropped dramatically in the smartphone vendor rankings, and has not featured in the IDC's quarterly top five since Q2 last year. According to ABI Research's market data for Q4, Nokia shipped 86.3 million handsets and 6.6 million smartphones. RIM is said to have shipped 6.9 million smartphones in the quarter.

ABI's senior practice director, Jeff Orr, says: "Samsung and Apple are both under pressure to maintain their market lead as less costly smartphones gain momentum entering 2013. Technology optimisation choices and a diverse handset portfolio are critical decisions over the next six to nine months to come out ahead."

Looking at the full calendar year for 2012, Samsung shipped a total of 215.8 million smartphones, Apple follows with 136.8 million, while Nokia still holds on to third position with 35.1 million. The top five is rounded out by HTC, at 32.6 million, and RIM, at 32.5 million smartphones shipped. For the full year, IDC says the global market for mobile phones was essentially flat, declining 0.2% on shipments of more than 1.7 billion units.

IDC's top five smartphone vendors, shipments, and market share, Q4 2012 (units in millions)

Vendor

4Q12 unit shipments

4Q12 market share

4Q11 unit shipments

4Q11 market share

Year-over-year change

1. Samsung

63.7

29.0%

36.2

22.5%

76.0%

2. Apple

47.8

21.8%

37.0

23.0%

29.2%

3. Huawei

10.8

4.9%

5.7

3.5%

89.5%

4. Sony

9.8

4.5%

6.3

3.9%

55.6%

5. ZTE

9.5

4.3%

6.4

4.0%

48.4%

Others

77.8

35.5%

69.2

43.1%

12.4%

Total

219.4

100.0%

160.8

100.0%

36.4%


IDC's top five total mobile phone vendors, shipments, and market share, Q4 2012 (units in millions)

Vendor

4Q12 unit shipments

4Q12 market share

4Q11 unit shipments

4Q11 market share

Year-over-year change

1. Samsung

111.2

23.0%

99.0

20.9%

12.3%

2. Nokia

86.3

17.9%

113.4

24.0%

-23.9%

3. Apple

47.8

9.9%

37.0

7.8%

29.2%

4. ZTE

17.6

3.6%

20.6

4.4%

-14.6%

5. Huawei

15.8

3.3%

13.9

2.9%

13.7%

Others

203.8

42.3%

189.5

40.0%

7.5%

Total

482.5

100.0%

473.4

100.0%

1.9%

Top five smartphone vendors, shipments, and market share calendar year 2012 (units in millions)

Vendor

2012 unit shipments

2012 market share

2011 unit shipments

2011 market share

Year-over-year change

1. Samsung

215.8

39.6%

94.2

19.0%

129.1%

2. Apple

136.8

25.1%

93.1

18.8%

46.9%

3. Nokia

35.1

6.4%

77.3

15.6%

-54.6%

4. HTC

32.6

6.0%

43.6

8.8%

-25.2%

5. Research In Motion

32.5

6.0%

51.1

10.3%

-36.4%

Others

92.4

16.9%

136.0

27.5%

-32.1%

Total

545.2

100.0%

495.3

100.0%

10.1%