Smartphones dominate mobile sales in Q2

Worldwide sales of mobile devices to end users totalled 428.7 million units in the second quarter of 2011, according to the report. Smartphone sales accounted for 25 per cent of overall sales in Q2, said Roberta Cozza, principal research analyst at Gartner:

 

“Smartphone sales continued to rise at the expense of feature phones. Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions.”

 

Cozza added that replacement sales in Western Europe showed signs of fatigue as smartphone sales declined quarter-on-quarter.

 

Nokia’s smartphone sales into the channel in Q2 were low, which Cozza attributes partly to a very competitive market that deflated demand for Symbian, but also to inventory management issues in Europe and China. She said that the channel bought less and worked hard to reduce stock levels, partly by cutting prices on older products, thereby reducing Nokia's average selling price:

 

“The sales efforts of the channel, combined with Nokia’s greater concentration in retail and distributors’ sales, saw Nokia destock more than 9 million units overall and 5 million smartphones, helping it hold on to its position as the leading smartphone manufacturer by volume.

However, we will not see a repeat of this performance in the third quarter of 2011, as Nokia’s channel is pretty lean.”

 

Nokia remains the leading mobile vendor with a 22.8 per cent market share, although this is down significantly on its 30.3 per cent share a year ago. However, Samsung is not closing the gap – it has a 16.3 per cent share, down from 17.8 per cent. Cozza says this is due to Samsung’s weaker presence in more price-sensitive market segments. The good news for Samsung though is that it is now the third largest smartphone vendor by sales, thanks in part to the Galaxy S II.

 

LG just about remains in third place in overall mobile device sales with a 5.7 per cent market share, down from 8 per cent a year ago. Apple is now up to fourth spot with a 4.6 per cent share (obviously purely smartphones), up from 2.4 per cent in 2010. Despite an aging iPhone 4, Gartner attributes much of this market growth to Apple opening up new sales territories. It added 42 new carriers and 15 new countries in the second quarter of 2011.

 

Closing out the top ten of overall mobile device sales are ZTE in fifth spot with 3 per cent, RIM a close sixth with 3 per cent, HTC seventh with 2.6 per cent, Motorola eight with 2.4 per cent, Huawei ninth with 2.1 per cent, and Sony Ericsson tenth with a paltry 1.7 per cent and one of the biggest losers in the quarter.

 

In terms of smartphone operating systems, Android claims a 43.4 per cent share – an impressive leap from its 17.2 per cent share a year ago, as more devices come to market, second-tier operating systems fizzle out, and consumers turn to smartphones. Apple’s iOS climbed to 18.2 per cent from 14.1 per cent last year. Symbian fell to 22.1 per cent from 40.9 per cent a year ago, and much of the cause of this must be levelled at Nokia. RIM’s OS fell from 18.7 per cent to just 11.7 per cent this quarter.

 

The combined share of iOS and Android in the smartphone OS market doubled to nearly 62 per cent in the second quarter of 2011, which Gartner attributes to these two OSs having the usability that consumers enjoy, the apps they need, and a portfolio of services delivered by the platform owner.

 

As for the rest of the year, Gartenr’s Roberta Cozza expects sales of mobile devices to grow around 12 per cent in 2011:

 

“We expect manufacturers and distributors to remain cautious about raising their stock levels in the second half of 2011, following the recent uncertainty on the world financial markets.”