Smartphones driving mobile phones growth

Smartphones are much in demand globally - thanks to their attractive user interface, versatile application platforms, greater demand for data services and ubiquitous mobile broadband connectivity in many markets. Unsurprisingly then, the worldwide growth in mobile handsets is being driven entirely by the Smartphones which were sold in excess of 450 million units in 2011. Latest estimates by International Data Corporation (IDC) - a renowned firm specializing in ICT-related market intelligence and advisory services - reveal that the global mobile handsets market grew by one percent year-on-year in the second quarter of CY12. Vendors are said to have shipped 406 million units in 2QCY12 compared to 401.8 million units in 2QCY11. The feature phone market is in rapid decline, yet still going strong in low-income countries. It is the Smartphones that are selling heavily. IDC estimates that the vendors shipped 153.9 million smartphones in 2QCY12, 42 percent more than same period last year. Currently, the Smartphone vendors are focusing more on Europe and emerging markets, to offset declining demand in key markets like North America. An intense battle rages on between major Smartphone manufacturers. Success hinges on multiple factors; including design innovation, choice of OS, carrier partnerships and advertising spend. Samsung and Apple together shipped more than half of global Smartphones during the period, as per IDC. Yet it is Samsung that is leading the pack, selling nearly twice the units Apple did during the period under review. Samsung owes its leadership to the flexibility it enjoys in creating various segment-specific models from high-end to low-end, courtesy Googles Android software platform. Apple designs high-end phones that run on its own proprietary software. Samsungs strategy is mimicked by other manufacturers using Android - but they lack the kind of design finesse, brand appeal and global footprint that Samsung has. The Smartphone market thrives on new editions and versions. Samsung was able to sell 50 million units last quarter (a record) - thanks to its launch of Galaxy S III phone, along with the Galaxy Note device. Apple is set to release iPhone 5 later this year. This may propel the companys shipments higher, compared to last quarter when shipments expectedly declined in the run-up to this much-awaited release. The business for the Finnish cell-phone maker Nokia seems anything but finished. Though its Smartphone shipments had came down by more than a third to 10 million units in last quarter, Nokia is stepping up for the fight. The company doubled its Windows Phone shipments over previous quarter and reported healthy sales of its latest Lumia phones. Strong performance in Asia-Pacific and better inventory management helped HTC regain its number four spot. Blackberrys woes translated into depressed shipments, and the Canadian company is out of top-five list. Rather, its the Chinese ZTE which came at number five, courtesy deeper penetration of its low-cost smartphones in China and increasing presence overseas in the US and Latin America. Global Smartphone shipments are expected to cross one billion units by 2016. It would be interesting to see which manufacturer commands a bigger slice of the pie. As of now, Apple and Samsung are fighting it out in courts across four continents, suing each other over alleged patent infringements. The outcome of this prolonged legal bout may cast a shadow on the Smartphone market landscape.

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Top Smartphone Makers (2QCY12)
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               Shipments  YoY change
                    (mn)         (%)
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Samsung             50.2       172.8
Apple                 26        27.5
Nokia               10.2       -38.9
HTC                  8.8       -24.1
ZTE                    8         300
Others              50.7        29.3
Total              153.9        42.1
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Source: IDC