Date: 23/10/2010

Report says smartphone shipments in 2nd quarter 2010 grew 12% over previous quarter

In a report published by ABI Research it is suggested that the smartphone market will continue to grow at a steady pace. The report estimates that Smartphones made up 19% of all handsets shipped in Q2'2010, representing a 12% increase over the Q1'2010 and a 50% jump compared to the same quarter in 2009.

Senior analyst Michael Morgan says that these remarkable growth rates are being driven by falling (often heavily subsidized) handset prices. Cost is no longer much of an obstacle: "One of the key remaining barriers to smartphone adoption in subsidized markets is now the cost of the data plan rather than the cost of the handset."

"How long can this go on?"

10% would normally be considered very good QoQ growth, Morgan notes, but in the smartphone segment that would now be considered lackluster. The battle for supremacy is now escalating at a feverish pitch. "The market is exploding," he says, "but there are so many players and so many operating systems that the question becomes, 'Can this market structure be sustained?' Most observers say no: it needs to boil down to three or perhaps four key operating systems."

In addition, the huge numbers of smartphones now connected in the US - especially iOS and Android models - are creating network capacity concerns that are "sucking the value out" of the mobile ecosystem.

Apple is reported to have shipped about 8.4 million iPhones in Q2, of which about 3 million were iPhone 4 models. Q3 results were even more impressive, posting a 68% quarter-over-quarter growth. HTC also did very well, with shipments growing from 3.3 million to 5.3 million units the by the start of the third quarter, and its improvement continued through Q3.

RIM recently launched its latest OS but, says Morgan, "RIM hasn't seen the full benefit of its OS launch yet," with QoQ growth moving only from 10.5 to 11.2 million shipments.