Mobile phone shipments ring in at 308 million

Nokia and Samsung continue to dominate as global handset shipments rise 13 percent in the second quarter, though smartphone wars mean operating profits are volatile.

The mobile phone industry saw its shipments reach 308 million in the second quarter, with Nokia and Samsung still holding the largest chunk of the highly competitive market, according to a report released Thursday by Strategy Analytics.

The 308 million units shipped across the globe represented a 13 percent gain from the 273 million shipped in the same quarter one year earlier, largely driven by low-end 2G handsets in emerging markets and high-end 3G touch screen phones in more mature regions, the report said.

Among the top five major mobile phone players, Nokia remained in first place with a 36.1 percent slice of the market, down from its 37.8 percent share in the year-ago quarter. Samsung came in second with a 20.7 percent stake, up from 19.1 a year ago, while LG's share dipped slightly to 10 percent.

Only Samsung and Research In Motion, which logged a 3.6 percent chunk of the market, saw their shares rise year over year, thanks to strong demand for QWERTY keyboard phones and touchphones, according to Strategy Analytics.

Strategy Analytics

Looking at the specific vendors, Nokia continued to shed market share as it shipped a lower-than-expected 111.1 million handsets in the quarter. Sporting the enhanced Symbian 3 interface, the N8 smartphone should reach customers in time for the European holiday season, helping profit margins over the second half, said the report. But the phone's lack of buzz in the U.S. could dampen its overall global prospects.

Shipping 63.8 million handsets in the second quarter, Samsung saw strong demand in North and South America but weaker results in Europe. With its 1GHz processor and 4-inch screen, the company's Galaxy S superphone has gotten off to a strong start and could help Samsung make further inroads into the high-end market.

As the fastest-growing vendor among the top five, BlackBerry maker RIM shipped 11.2 million handsets during the quarter, a 40 percent jump from the 8 million it shipped a year earlier. The company is faring well in Asia, Europe, Africa, and South America but is still facing heavy competition in North America from the Apple iPhone and Android smartphones. Offering a more user-friendly touch screen, the new Blackberry OS 6 upgrade is just the push the company needs to boost its appeal among North American consumers, noted the report.

Gazing at the road ahead, Strategy Analytics expects 325 million handsets to ship in the third quarter, a gain of 12 percent from the prior year's quarter. The industry is likely to avoid any downturn, though that could change if the economy starts to worsen throughout the major markets in North America, Western Europe, and Asia.

However the economy fares, the 3G wars are likely to escalate as Nokia, Samsung, RIM, Motorola, and the other players release more phones in a bid to capture market share for high-end devices, the report said. The hot and heavy competition will likely put pressure on margins and operating profits as vendors try to outduel each other.

 

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