02/19/2010


Smartphone is conquering a key role in cell phone sales

 

The world financial crisis strongly affected the cell phone sales in 2009. Less devices were sold (unit shipments) if compared with the two previous years.

 

 

 

 

Cell phone sales in the world started to fall in the 4th quarter of 2008 (4Q08) and reached the lowest level in 1Q09. The recovery happened in the following quarters of the year, but in the same level reached in 2007.

 

 

 

 

Samsung and LG were the best companies along this period.

 

 

 

 

Samsung kept the growth trajectory of the previous quarters and increased its market share in cell phone unit shipments in the world from 18.1% in 4Q08 to 21.1% in 4Q09. Similar trajectory was followed by LG.

 

 

Market Share
4Q08
4Q09
Nokia
38.7%
39.0%
Samsung
18.1%
21.1%
LG
8.8%
10.4%
Sony Ericsson
8.3%
4.5%
Motorola
6.6%
3.7%

 

 

Nokia kept its market share in the period. Sony Ericsson and Motorola lost stake in the market.

 

Motorola's trajectory of market share loss precedes the crisis. The company was in the second position in 1Q07 holding sales of 45 million units and fell to the fifth position in 4Q09 with 12 million units.

 

Smartphones

 

Analyze only the cell phone sales isn't, however, enough to understand what is happening inside this market, which goes through a big transformation with growth in smartphone sales.

 

Despite being only 16% of the cell phones sold in the world in 4Q09, smartphones revenue share is much higher.

 

At Nokia, smartphones were responsible for 47.6% of the device revenue in 4Q09, despite representing 16.4% if the sold units. One smartphone sold the average price of 186 EUROS, while the average price for other cell phones reached €40.

 

In this scenario it's important to consider other players stakes, the players that only operate in the smartphone market.

 

Nokia is the market leader in smartphones having about 39% of the market share, but the company faces competition with RIM (Blackberry) and Apple (iPhone) (more details).

 

Nokia sold more than the double of the amount of iPhones, despite of that Apple's revenue with iPhone sale and associated services is nearly the same reached by Nokia in this segment.

 


 

 

The heating of the smartphone market accelerates the trend for these devices overcome in a few years PCs as the main device for Internet access. In 4Q09, 90 million PCs were sold in the world against 52 million smartphones.

 

This scenario led Google to invest in the Android, new operational system for smartphones, and launch its own smartphone. Nokia, in turn, decided to compete for the "mobile Internet" with the portal Ovi and navigation services (GPS) providing free access for users.

 

Apple's success with service sales for iPhone, through its Application Store, promoted the launching of similar stores owned by other manufacturers and operators.

 

You could ask:

  • Will unit shipments of 2010 overcome 2008's?
  • Will smartphones sale revenue surpass the sale revenue from other types of cell phones?
  • Will Nokia remain as leader in the smartphones market?

 

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Note: The opinions expressed in the published articles in this section are their authors' responsibility.

 

 

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