Gartner: Apple passes RIM, now #4 in worldwide mobile phone unit sales; iOS now #3 in smartphone OS

Worldwide mobile phone sales to end users totaled 417 million units in the third quarter of 2010, a 35 percent increase from the third quarter of 2009, according to Gartner, Inc. Smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 percent of overall mobile phone sales in the third quarter of 2010.

“This is the third consecutive double-digit increase in sales year-on-year, indicating that consumer demand is healthy,” said Carolina Milanesi, research vice president at Gartner. “This quarter saw Apple and Android drive record smartphone sales. Apple’s share of the smartphone market surpassed Research In Motion (RIM) in North America to put it second behind Android while Android volumes also grew rapidly making it the No. 2 operating system worldwide.”

Although the top three worldwide mobile device manufacturers Nokia, Samsung and LG remained the same – albeit with reduced market share – the third quarter saw Apple rise into the top five manufacturers, surpassing RIM for fourth place (see Table 1).

In addition to strong growth of smartphone sales in mature markets, increasing sales of white-box products in some emerging regions drove sales of mobile phones upward once again. “In the third quarter, white-box manufacturers continued to expand their reach outside of China into markets such as India, Russia, Africa and Latin America,” said Ms. Milanesi. “We firmly believe this phenomenon will not be short-lived as we still see a continued need for non-3G devices. Although we have seen acceleration in sales this quarter, we expect an even bigger volume in the fourth quarter of 2010.”

The rise of white-box manufacturers from Asia has also helped the ‘Others’ section, as a proportion of overall sales, increasing its market share to 33.0 percent in the third quarter of 2010. “This is having a profound effect on the top five mobile handset manufacturers’ combined share that dropped from 83 percent in the third quarter of 2009 to 66.9 percent in the third quarter of 2010,” said Ms. Milanesi.

In the third quarter of 2010, Nokia sold 110.4 million units into the channel. Its volume sales were slightly lower than expected due to shortages of components, such as camera modules and displays, which restricted availability of lower cost devices. Demand for its lower end products was met through some destocking in inventory volume that helped Nokia in its sell through volume reach 117.5 million units. This resulted in a market share decline of 8.5 percentage points from the third quarter of 2009. But shortages of low-end devices also encouraged many consumers to buy a more expensive product. Combined with favorable currency exchange rates, this meant Nokia’s financial results were better than expected.

Samsung had a strong third quarter, as mobile phone sales reached 71.7 million handsets in the third quarter of 2010, up 18.2 percent from the third quarter of 2009. However, its market share experienced a slight decline to 17.2 per cent in the third quarter of 2010. Samsung’s smartphone market share reached 10 percent in the third quarter of 2010. Samsung sold close to 1 million bada devices in the third quarter of 2010, and 6.6 million Android phones, making Samsung the top Android seller.

LG sold 27.5 million mobile devices in the third quarter of 2010, as its global market share dropped to 6.6 percent. LG’s strengths in stylish midtier devices are becoming less relevant in mature markets that are moving increasingly toward smartphones, and this is translating directly into market share. LG lacks a flagship smartphone; its devices tend to be affordable midtier devices that lack hardware or software innovation, priced at the low end of communication service provider (CSP) partners’ ranges.

Apple delivered a stellar performance in the third quarter of 2010, selling 13.5 million units. It could have sold more but for its ongoing supply constraints and is now in fourth place worldwide. The iPhone is sold in 89 countries through 166 CSPs. Apple’s sales in Europe, Asia and Japan, more than doubled from the third quarter of 2009 and sales in Western Europe delivered Apple the third spot in the regional ranking. While Apple remains focused on consumers, enterprise adoption of the iPhone and iPad has grown.

RIM sold 11.9 million devices to end users in the third quarter of 2010, and its global share of the smartphone market fell to 14.8 percent. RIM’s share of the overall North American market declined to 11.2 percent in the third quarter of 2010, from 12.7 percent in the third quarter of 2009. RIM lost its leading smartphone market position to Apple. As well as the effect of the iPhone 4, new Android devices like the Motorola Droid X, Samsung Galaxy S and HTC Incredible and Evo also reduced RIM’s market share. But new devices like the BlackBerry Torch helped to maintain RIM’s unit sale momentum in the U.S. due to AT&T’s promotional campaigns.

Smartphone Sales
The third quarter of 2010 produced record sales of more than 81 million communication devices based on open operating systems (smartphones). Android accounted for 25.5 percent of worldwide smartphone sales, making it the No. 2 operating system (OS). It was particularly dominant in North America.

Gartner estimates Android phones accounted for 75 percent to 80 percent of Verizon Wireless’s smartphone trade in the third quarter of 2010. Manufacturers such as Samsung continued to launch high-end devices like the Galaxy S. But manufacturers also launched Android devices at lower prices to target different consumer segments. For example, ZTE launched a sub-£100 Android phone with Orange in the prepay U.K. market. For its part, Google is maintaining a fast pace of OS updates. Each version brings new features and polish to Android, and the level of innovation is a major differentiator.

Apple performed extremely well thanks to the iPhone 4. Relationships with multiple CSPs gave Apple wider channel reach internationally, and the strong ecosystem around iTunes and the App Store continued to help Apple dominate. Apple’s share of the smartphone market surpassed RIM in North America to put it second behind Android. In Western Europe, iPhone sales doubled year-on-year, making Apple the third-largest vendor behind Nokia and Samsung in the overall devices market.

“Smartphone OS providers have entered a period of accelerated platform evolution, stimulated by more regular product releases, new platform entrants and new device types,” said Roberta Cozza, principal research analyst at Gartner. “Any platform that fails to innovate quickly — either through a vibrant multi-player ecosystem or clear vision of a single controlling entity — will lose developers, manufacturers, potential partners and ultimately users.”

What’s Ahead
For 2010, Gartner now expects overall devices sales to show over 30 percent year-on-year growth fueled by white-box manufacturers. The impact of media tablets on mobile device sales will be tested in 2011. Gartner forecasts that media tablets (such as the Apple iPad) will reach 54.8 million units in 2011.

“Apple’s dramatic expansion of iOS with the iPad and the continuing success of the iPod Touch are important sales achievements in their own right. But more importantly they contribute to the strength of Apple’s ecosystem and the iPhone in a way that smartphone-only manufacturers cannot compete with,” Ms. Milanesi said. “To a developer, the iPod Touch and iPhone (and to a lesser extent the iPad) are effectively the same device and a single market opportunity. While Android is increasingly available on media tablets and media players like the Galaxy Player, it lags far behind iOS’s multi-device presence. Apple claims it is activating around 275,000 iOS devices per day on average — that’s a compelling market for any developer. And developers’ applications in turn attract users.”

Additional information is in the Gartner report “Competitive Landscape: Mobile Devices, Worldwide, 3Q10.” The report is available on Gartner’s website at http://www.gartner.com/resId=1465830.

MacDailyNews Take: We’ll watch these numbers with interest as the current (calendar fourth quarter 2010) quarter will have strong U.S. multi-carrier iPhone rumors and subsequent quarters may have actual U.S. multi-carrier iPhones. You may be seeing the Android’s high water mark for OS market share in these numbers as market realities, not to mention court cases, change to work in favor of Apple iOS. After all, why settle for a fake iPhone when you can get the real thing?

21 Comments

  1. RIMM is getting hammered from most analysts, their market share is dwindling, they’re failing and what happens? The stock goes up with Mister Softy while, typically, Apple is down even though the company excels and gets good news each day. One of the persistent mysteries of being an AAPL shareholder, I guess. I’m long AAPL and will be vindicated 8^)

  2. … Apple owns over 10% of the “Mobile Terminal Sales” world-wide. They have certainly passed this number for the smart-phone market already. Android has outpaced iOS in that market partly due to the variety of models and partly due to two-fer sales.
    Jake, are you talking about two <u>hardware</u> updates? Or two <u>software</u> updates? Or maybe one of each? Apple’s hardware sells well right on through to the next introduction – they are not losing sales due to obsolescence. The OS is already updated a couple of times a year – part of the reason sales continue as they do.

  3. … kindly update your “Allowed HTML Tags” info. It says: “<u>underline</u> result: underline” while you can see in my previous message it does No Such THING!
    m159, are you saying the iPhone should be praised as exemplary because it does NON-phone tasks well? That may well be a plus … OK, it IS a plus … but first things first: it’s a telephone! Anything else is just a plus. Not arguing, just making a point.

  4. … kindly update your “Allowed HTML Tags” info. It says: “<u>underline</u> result: underline” while you can see in my previous message it does No Such THING!
    m159, are you saying the iPhone should be praised as exemplary because it does NON-phone tasks well? That may well be a plus … OK, it IS a plus … but first things first: it’s a telephone! Anything else is just a plus. Not arguing, just making a point.

  5. iOS share does not include, of course, iPod touches, so in purely abstract idea Gartner’s tables have sense, but not beyond that.

    Apple’s iOS share with iPods would be about 18+ million units, and with iPads about 23 million, with is like 10% more than Android, which is exclusively for smartphones.

  6. I comment on an ad with bad manners a few days ago and it shows up again today, unchanged. Now … this, by itself, is merely annoying – as I’m not an epileptic. But the message says “You are the 100,000th visitor”. Sweet … but that’s what it said a couple of days ago and I’ve visited several times since and several others have also visited since.
    The ad is a blatant lie. It also does not let you know where it is from or where it is pointing you to. Then there’s the strobe effect. And the audio. MDN, you need to protect your visitors better.

  7. @original Jake…

    well that’s not an original concept. Why would apple need to do this, they already can not make the devices fast enough, without having to muddy themselves with the BOGO-ers.

    And there is something to be said about doing things right, and not rushing it. Look at the companies falling over themselves with their vapourware tablets, and the other also-rans, me-too devices rushing them just to try to take away some of the magic of the iPad’s success. It already has the fastest adoption rate than other consumer device. beating out the DVD player, the iphone…

    Apple is doing it right, and consumers are finally seeing that after almost 30 years of hard-learned experiences.

  8. @ Original Jake, What is the point of updates for the sake of it? Apple inc. have a plan and will stick to it as per requirement. Android has a plan, copy Apple and then stuff the OS with features that Apple haven’t stuffed into iOS,as a result the majority of Droid sets are not compatible and any new update of Android is not backward compatible.
    I will be generous to you and accept that you posted in a hurry to get top spot, otherwise you would have backed your statement with practical examples to illustrate what you are arguing.

  9. So MDN, you think releasing the iPhone on Verizon is going to curb the Android assault WORLDWIDE? Doubt it. Apple still is making a lot of money on the iPhone though. But expect the battle for developers to start thinking Android first, Apple second (if even necessary).

  10. @Tom

    I agree to some extend. Android is now the platform of choice regardless of the reason. And Apple’s inability to “make them fast enough” isnt an excuse for the Android platform to now own 25% of the smartphone market. All that said, does Google even make money on Android? Makers use it cause its free, so fat bit of good its doing for Google unless its ad revenue. Which they can get part of through iphones as well anyway.

    So how does all this play out? Hard to say, to be honest, while id love an iPad for my mom or grandparents. For me, I just might wait until the Androind based units are decent and see how they stack up. At some point these guys will catch on. Although they never did with the iPod. Hmmm.

  11. At least this guy is seeing Apple’s advantage:

    “To a developer, the iPod Touch and iPhone (and to a lesser extent the iPad) are effectively the same device and a single market opportunity. While Android” is really a mutt.

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