Emerging markets drive mobile phone sales to new level

Worldwide mobile phone sales to end users totaled 417 million units in the third quarter of 2010, a 35 percent increase from the third quarter of 2009, according to Gartner, Inc.

Smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 percent of overall mobile phone sales in the third quarter of 2010.

“This is the third consecutive double-digit increase in sales year-on-year, indicating that consumer demand is healthy,” said Carolina Milanesi, research vice president at Gartner. “This quarter saw Apple and Android drive record smartphone sales. Apple’s share of the smartphone market surpassed Research In Motion (RIM) in North America to put it second behind Android while Android volumes also grew rapidly making it the No. 2 operating system worldwide.”

Although the top three worldwide mobile device manufacturers Nokia, Samsung and LG remained the same – albeit with reduced market share - the third quarter saw Apple rise into the top five manufacturers, surpassing RIM for fourth place.

In addition to strong growth of smartphone sales in mature markets, increasing sales of white-box products in some emerging regions drove sales of mobile phones upward once again.

“In the third quarter, white-box manufacturers continued to expand their reach outside of China into markets such as India, Russia, Africa and Latin America,” said Milanesi. “We firmly believe this phenomenon will not be short-lived as we still see a continued need for non-3G devices. Although we have seen acceleration in sales this quarter, we expect an even bigger volume in the fourth quarter of 2010.”

The rise of white-box manufacturers from Asia has also helped as a proportion of overall sales, increasing its market share to 33.0 percent in the third quarter of 2010.

“This is having a profound effect on the top five mobile handset manufacturers’ combined share that dropped from 83 percent in the third quarter of 2009 to 66.9 percent in the third quarter of 2010,” said Milanesi.

Jock O’Connell, Beacon Economics’ International Trade Adviser in Sacramento, told SCMR that U.S. multinationals are benefitting, although most of the “guts” for phones are manufactured in Asia.

“One interesting exception on the list is Infineon, which Intel just bought,” he noted.

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