Worldwide sales of mobile devices to end users totaled 428.7 million units in the second quarter of 2011, a 16.5 percent increase from the second quarter of 2010, according to Gartner, Inc. (see Table 1).
The channel built up stock at the end of the first quarter of 2011 in preparation of possible component shortages following the Japanese earthquake. As a result, sell-in demand slowed in the second quarter of 2011 to 421.1 million units, a 4.4 percent decrease from the previous quarter.
Sales of smartphones were up 74 percent year-on-year and accounted for 25 percent of overall sales in the second quarter of 2011, up from 17 percent in the second quarter of 2010.
“Smartphone sales continued to rise at the expense of feature phones,” said Roberta Cozza, principal research analyst at Gartner. “Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions.” However, replacement sales in Western Europe showed signs of fatigue as smartphone sales declined quarter-on-quarter.
Table 1
Worldwide Mobile Device Sales to End Users by Vendor in 2Q11 (Thousands of Units)
Source: Gartner (August 2011)
In smartphones, Nokia’s sales into the channel in the second quarter of 2011 were low. This was partly due to a very competitive market that deflated demand for Symbian, but also to inventory management issues in Europe and China in particular. The channel bought less and worked hard to reduce stock levels, partly by cutting prices on older products. These factors reduced Nokia’s average selling price for smartphones, compared to the first quarter of 2011. “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,” said Ms. Cozza. “However, we will not see a repeat of this performance in the third quarter of 2011, as Nokia’s channel is pretty lean.”
Samsung achieved strong growth in sales of mobile devices. For example, the Galaxy S II sold well, and this model went on to chalk up 5 million sales by the end of July. A strong performance in the smartphone market helped Samsung increase its market share, to become the third-largest smartphone vendor. However, its overall share dropped year-on-year, and grew only marginally quarter-on-quarter, mainly due to Samsung’s weaker presence in more price-sensitive market segments.
Apple continued to exceed expectations, even though the iPhone 4 will soon be replaced by a new model. Part of its growth came from the 42 new carriers and 15 new countries that it entered in the second quarter of 2011, which brought its total coverage to 100 countries. This expansion caused its inventory to grow a little by the end of the second quarter of 2011, when sales to end users stood at 19.6 million units. In mainland China, Apple is the seventh-largest mobile phone vendor and the third-largest smartphone vendor.
Research In Motion’s (RIM’s) share of the smartphone market declined to 12 percent in the second quarter of 2011, from 19 percent a year ago. Also, the company lost its No. 5 position in the worldwide ranking of mobile device vendors to ZTE. Demand for RIM’s devices in the second quarter was impaired by an ageing portfolio and delays in shipping products. In the coming quarters RIM will have to deal with increased competition to its messaging offering and manage a platform migration from BlackBerry 7 to QNX.
Google and Apple are the obvious winners in the smartphone ecosystem. The combined share of iOS and Android in the smartphone operating system (OS) market doubled to nearly 62 percent in the second quarter of 2011, up from just over 31 percent in the corresponding period of 2010 (see Table 2). Gartner analysts observed that these two OSs have the usability that consumers enjoy, the apps that consumers feel they need, and increasingly a portfolio of services delivered by the platform owner as well.
Table 2
Worldwide Smartphone Sales to End Users by Operating System in 2Q11 (Thousands of Units)
Source: Gartner (August 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,” said Annette Zimmermann, principal research analyst at Gartner. Gartner expects sales of mobile devices to grow around 12 percent in 2011.
For more information, see the Gartner report “Market Share: Mobile Communication Devices by Region and Country, 2Q11” which is available on Gartner’s website at http://www.gartner.com/resId=1764117.
Source: Gartner
there are no hard sell thru numbers from anyone other than apple. If Gartner did, they would publish samsung numbers separately. This is baloney.
VZ and ATT both reported that the iPhone was clobbering the pseudo-javas 2 to 1.
I think there is a measure of purposeful dissimulation by expressing sales in terms of Operating System. A truer gauge would be to enumerate the number of handsets by manufacturer.
I don’t understand why the analyst is using buzzwords like ‘sell-in’ and its corollary, ‘sell-out,’ to illustrate his case. I don’t know what the significance of selling to the channel means because if the stocks are not moving off the shelves into the hands of the consumer, they’re not selling at all. I don’t care what anybody calls them, it’s not a true measure of sales at all. So you’re comparing sales to consumers (apples) to sales to distributors, carriers, retailers and Eric T Mole’s back channel (oranges).
If those stocks remain in the channel, all that means is a lower rate of sales in the following quarter unless the manufacturer indulges in some aggressive discounting. So inflating sales to the channel is like a quick fix – you’ll have to get down from the high some time.
Steady as she grows… I think one of Apple’s priorities/in progress strategies might be to free iOS of any Google malware aka Ads and default Apps/services. Losing significant chunk of the mobile slice as well as non-trivial (read non-1337) consumers in one go, any given sunny Tuesday morning, would make all this Android pseudo explosion seems so very trivial. I wonder if this nightmare scenario might cause any migraine induced sleepless nights at the Mountain View strategy centre that had the bright idea to bet against Steve Jobs.
Is it me or doesn’t the numbers add up?
I always wondered, how the heck has Nokia such a humongous production capacity for their dumb Phones?
While Apple struggles with production capacity for the iPhone (and every other Apple product), Nokia just keeps on flooding the market with Phones.
Cheap phones or not, everything has to be assembled.
While i can image that limited parts such as sensors slow down the iPhone production, Apple literally has entire Cities in China building iPhones.
Image Apple with the production capacity of Nokia…
If you look at the makeup of Nokia devices sold in the previous quarter, out of a total of 97.9 million devices, smart phones constituted 23.9 million devices or a shade under 25% or a quarter of the total. Apple by comparison sold 19.6 million iPhones for a difference of 4.3 million units. If we lumped the iPod touch as part of the manufacturing process churning out small form factor iOS devices then the difference becomes even more marginal as Apple sold 10 million iPods out of which let’s say half were iPod touches or 5 million. So in total Apple took delivery of 24.6 million devices. So the differential in manufacturing capacity insofar as it touches smartphones is not startlingly divergent.
As for the rest of Nokia’s total phones sold, we can safely say that 74 million were feature phones. These are relatively simple to assemble and do not need the level of quality control required of a smartphone as you’re basically assembling a printed circuit board that responds to key presses from a physical keyboard. The OS that you run on a feature phone is a fairly simplistic Symbian S40 or S60 so fault tolerance is less strict than that required for a smartphone. This means that you can set up a distributed manufacturing system in low wage Asian counties like Thailand, Philippines and India, and parts of eastern Europe like Romania, Poland and Turkey to offload production to as many sites as possible.
First its another dweeb talking market share. Its all these dumb anal—yst know. Ritz crackers = Apple. 🙁
With Apple taking 70% of the smart phone world profit and only selling 15% of the phones, what happens if they sell 30%?? Does everyone else lose money????
Just a thought here.
en
@eldernorm
apple only sells 5% of phone sales overall…tons of room to grow
competitors looks their slim profits to apple big whoop