Overall, the mobile device market showed less seasonality than in previous years in mature markets such as Western Europe and North America. Worldwide mobile phone sales to end users reached 32.7 percent growth in the fourth quarter of 2010 as mobile phone sales to end users totaled 452 million units.
Shortages continued to affect popular components, such as camera modules, touchscreen controllers, and active-matrix organic light-emitting diode (AMOLED) screens, in the fourth quarter of 2010. "This situation will not ease until at least the second half of 2011. Shortages will be a long-term consideration for mobile device vendors, because other fast-growing categories of connected consumer devices, such as media tablets, are competing for the same components," said Ms. Milanesi.
White-box sales exceeded 115 million units in the fourth quarter of 2010 and 360 million units in 2010 overall. Although white box sales helped boost mobile device sales to 1.6 billion units in 2010, it would be misleading to interpret this as market "growth" in the strictest sense. "What we see is an increase in addressable market for mobile device manufacturers as consumers shift their behavior to buying new phones from legitimate channels over second-hand and black market devices," said Ms. Milanesi.
In 2010, Nokia's annual mobile phone sales to end users reached 461.3 million units, a 7.5 percent drop in market share from 2009. The year-on-year decline is not solely attributable to Nokia's continuing deficiency in high-end devices but is, in part, the result of the growth of legitimate white-box sales. Nokia's share of the smartphone market dropped 6.7 percentage points from 2009. Nokia's future rests on the announcements it will make on February 11 and how well the company can execute on those plans in the limited time available.
RIM's overall mobile phone sales to end users in 2010 reached a total of 47.5 million units, an increase of 38.2 percent year-on-year (see Table 2). Performance in the fourth quarter of 2010 was particularly strong in Southeast Asia (Indonesia) and Europe (the U.K. and the Netherlands). These sales rested on aggressively priced prepaid offerings, as well as steady uptake of the BlackBerry Messenger service. Despite growing volume sales, RIM was unable to keep up with market growth and saw its market share decline from 19.5 percent in the fourth quarter of 2009 to 13.7 percent in the fourth quarter of 2010. At the end of 2010, RIM announced it will release its media tablet, the PlayBook. It remains to be seen if this move will help RIM strengthen its ecosystem.
Apple sold 46.6 million units in 2010, 87.2 percent growth from 2009. This growth is largely due to expansion into new countries and the ending of exclusivity deals, which has made the iPhone available through 185 communication service providers (CSPs) around the world. The end of exclusivity deals also encouraged CSP competition on tariffs and data plans, making the total cost of iPhone ownership more in line with other high-end smartphones. For 2011, Apple's main growth opportunity will come from adding Verizon Wireless to its list of CSPs in the U.S. Gartner analysts said Apple will maintain a stable average selling price, which favorably impacts margins at the expense of market share opportunity. However, Apple is not targeting the mass market, which is a fundamental difference in approach from Android.
The smartphone market remains concentrated in advanced markets, where buyers have more disposable income and where networks are fast enough to support smartphones' full feature sets. “Western Europe and North America accounted for 52.3 percent of global smartphone sales in the fourth quarter of 2010, with smartphones accounting for close to half of all handsets sold in these regions,” said Roberta Cozza, principal research analyst at Gartner. Intense competition affected shares at the top of the smartphone market in the fourth quarter of 2010, continuing trends that we have seen throughout 2010.
In the smartphone operating system (OS) market, "Android grew 888.8 percent in 2010 and moved to the No. 2 position. Android sales in the fourth quarter of 2010 continued to be driven by broad availability of many high-end products from HTC (Desire range, Incredible and EVO), Samsung (Galaxy S) and Motorola (Droid X, Droid 2).
Symbian’s market share dropped further in the fourth quarter of 2010 to 32.6 percent or 32.6 million units. This allowed Android to overtake Nokia's Symbian unit sales during the fourth quarter of 2010. However, the Symbian OS is also used by Fujitsu and Sharp as well as in legacy products from Sony Ericsson and Samsung. “This aggregated volume kept Symbian slightly ahead of Android,” said Ms. Cozza.
The wider availability of the iPhone 4 helped Apple to maintain its share of the smartphone market to 16.0 percent in the fourth quarter 2010 and led the iPhone OS platform to reach the No. 4 position in 2010. "As a platform, iOS is in excellent shape," said Ms. Milanesi. With every iPad and iPod Touch sold, Apple increases the profile of iOS with potential iPhone buyers and strengthens its developer ecosystem.
"With the Mobile World Congress 2011 taking place next week, we can expect smartphones and tablets to be at center stage of the show, and a number of new application announcements such as 3D technology, improved user interfaces around touch, faster networks on LTE technology, and new forms of payments, such as near field communication available on smartphones," Ms. Milanesi said.
