Apple and RIM gain as smartphone sales grow

IDG News Service — Wed, 20 May 2009 14:36:03 -0400

Smartphone sales for the first quarter increased by 12.7 percent year on year, a bright spot in a depressed mobile phone market where overall sales dropped 9.4 percent. Research In Motion and Apple were the big winners as smartphone sales rose to 36.4 million units for the quarter, according to Gartner.

The two North American companies rank second and third in worldwide smartphone sales -- counting the number of devices sold to consumers -- and are catching up with leader Nokia, which continues to lose market share.

RIM's smartphone market share reached 19.9 percent in the first quarter, up from 13.3 per cent a year earlier. It sold 7.2 million BlackBerry devices to end users, according to Gartner.

"RIM now has products that are more interesting to consumers, and QWERTY is not a geeky thing anymore, but is actually in. The price plans have also gotten better," said Carolina Milanesi, research director at Gartner.

The iPhone was helped by good marketing, and 3.9 million units of the Apple smartphone was sold to end users. Its share of the smartphone market is 10.8 percent.

The success of Research In Motion and Apple also showed that services and applications are increasingly important, according to Gartner.

Nokia's smartphone market share dropped from 45.1 percent to 41.2 percent, according to Gartner. Nokia still suffers from a weak high-end portfolio, according to Milanesi. Sales during the quarter were saved by the Eseries, especially the E71, and the 5800 XpressMusic, Milanesi said.

There are several reasons why smartphones sales are managing to continue to grow even though there is a recession, according to Ben Wood, analyst at CCS Insight. Subsidies are playing an important role, because they lower the cost of the devices for the consumers.

"People need a bit of sunshine in their life, and they might not afford a new car or a holiday, but they can afford a smartphone," said Wood.

But support for social networking, including Facebook, is also driving sales, especially for BlackBerry devices, according to Wood.

Dropping price points, the Asian vendors becoming more aggressive, and the arrival of more Android based devices will help the smartphone market grow by 27 percent during 2009, according to Gartner.

The overall mobile phone market didn't do as well with sales worldwide dropping by 9.4 per cent compared to the first quarter of 2008, and ending up at 269.1 million.

But there were also some signs of signs of recovery in markets such as in markets such as North America and China, according to Milanesi. However, that won't help the sales of mobile phones to end users to drop by about 4 percent during 2009, Gartner said.

Image: Android G1 (IDG News Service)