Smartphone market unfazed by recession

A record 43.3 million smartphones shipped in the third quarter, according to a new report from IDC.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
3 min read

Consumer demand for smartphones seems to be unstoppable.

In the third quarter, vendors shipped a record 43.3 million devices, up 4.2 percent from last year's third quarter and up 3.2 percent from this year's second quarter, says a report released Thursday by market researcher IDC.


Among smartphone vendors, Nokia still enjoys the greatest market share, according to IDC, with a 37.9 percent slice for the third quarter. Though the company has struggled in North America, it commands a huge worldwide lead. Results were aided by Nokia's pricey but popular N97and E71 phones. IDC is also interested to see how Nokia's new N900 smartphone/tablet fares with high-end users.

The demand for BlackBerry devices helped Research In Motion's third-quarter market share jump 35.7 percent over the same quarter last year--the highest jump of any vendor. With a 19 percent chunk of the market, the company now trails Nokia in second place. Though RIM has done best in North America, it's also seen an improvement in buisness overseas, says IDC. During the third quarter, the company debuted two new smartphones--the Blackberry Tour and Curve 8520.

With the debut of the iPhone 3GS, Apple saw its highest sales volume yet for a single quarter. Apple fans replaced their old iPhones, while the lower-priced 3G appealed to customers looking for a bargain. For the quarter, Apple's market share rose 7.1 percent, putting it in third place with a 17.1 percent stake. Popular in major regions like the U.S., the iPhone hasn't made a big dent in emerging markets. But IDC believes the phone's introduction in China could help it achieve greater sales volume worldwide.

In fourth place, HTC enjoyed a gain in share of 14.7 percent for the third quarter and now holds a 5.6 percent slice of the market. The largest provider of smartphones running Windows Mobile, HTC has also been tapping into the Android arena with such devices as the Dream (G1), Hero, and Magic.

Samsung saw no growth in market share, though its third-quarter sales volume improved in Asia/Pacific, Latin America, and EMEA (Europe, the Middle East, and Africa). Like HTC, Samsung has run Windows Mobile on its smartphones but jumped over to Android for its new Moment and Behold II phones.

With Android appearing on so many new phones, the open-source operating system could pose a challenge to other smartphone operating systems, believes IDC.

"With the release of Android-based handsets from several different OEMs, most recently Motorola, but also HTC, Samsung LG, and Sony Ericsson, the buzz surrounding Android OS is reaching critical mass," William Stofega, research manager with IDC's mobile devices technology and trends team, said in a statement. "With an expanding portfolio of handsets and a just released update of the code, Android is poised to mount a serious challenge to the incumbent smartphone OEMs for the first time in its brief history."

Overall, IDC expects worldwide demand for smartphones to continue, outpacing the general cell phone market.

"As users expect greater functionality from their devices beyond telephony, we believe the converged mobile device market to grow faster than the overall mobile phone market," Ramon Llamas, senior research analyst with IDC's mobile devices technology and trends team, said in a statement.

A recent report from In-Stat echoed IDC's findings but focused specifically on Wi-Fi handsets. In-Stat found that Nokia still enjoys a leading slice of this market but has lost about 15 percent of its share over the past year to Apple and RIM.

Yet another recent report by ChangeWave Research, however, offered somewhat different findings in the smartphone arena. Though ChangeWave also forecasts a thriving smartphone industry, it pegs RIM as the top vendor with a 40 percent share of the market, with Apple quickly catching up.

To compile its data, IDC tracked smartphone shipments. By contrast, ChangeWave conducted a survey of 3,500 smartphone consumers and included RIM, Apple, and Palm but not Nokia.