Smartphone market growth begins to slow

THE SMARTPHONE MARKET is beginning to slow down, with lower shipment growth experienced in the third quarter of this year, according to reports by both Internationl Data Corporation (IDC) and ABI Research.

A number of major smartphone manufacturers, including Apple, RIM and Nokia, have seen slower demand in the last quarter compared to previous months, bringing overall shipment numbers for the smartphone market down.

Despite this poor performance, shipments for the third quarter still grew 33 per cent compared to the year before, according to ABI Research. This number slumps to 12.8 per cent for the entire mobile phone market, according to IDC, showing that smartphones are still the fastest growing sector in this market. The growth was also higher than the 9.8 per cent growth of the second quarter and the 9.3 per cent growth that IDC had forecast.

The numbers are more than reasonable, but the figure is the second lowest growth rate in the last two years, a period which saw an unprecedented smartphone and tablet computer craze.

"Lackluster smartphone shipments from Apple, RIM and Nokia have temporarily halted the hyper growth of the smartphone market in Q3," said Mike Morgan, senior analyst at ABI Research.

"The combination of economic uncertainty and anticipation over fourth quarter or late third quarter product releases caused some consumers to delay their smartphone purchases," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker. "Many waited for products such as the iPhone 4S, which was announced after the quarter closed, or Research In Motion's BlackBerry 7 phone series, which were released in the final weeks of the quarter."

Nokia remained at the top of the ranks of the overall mobile phone market, with a market share of 27.1 per cent. However, this was down from the 31.6 per cent it had a year ago and shipments are also down from 110.4 million units to 106.6 million. It has managed to keep its place largely due to feature phone sales in China and Europe, but might do better in the smartphone sector in the coming months thanks to its Windows Phone 7 Lumia range of devices.

Samsung is in second place with a 22.3 per cent market share, up from 20.5 per cent the year prior. Shipments were also up from 71.4 million units to 87.8 million. This growth is largely due to high smartphone sales, including the Galaxy S2, with strong demand in China in particular.

LG managed to barely hold onto third position with a market share of 5.4 per cent, down from the 81 per cent it enjoyed in the third quarter last year. Shipments were also down from 28.4 million units to 21.1 million, making it the worst performing of the top five phone vendors.

ZTE came in fourth with the largest increase in shipments and market share, up from 12.1 million units to 19.1 million and from 3.5 per cent to 4.9 per cent, respectively. Its growth is largely due to aggressive expansion in China, where it nearly doubled its smartphone numbers, and North America, where it launched two new Android phones.

Apple is in fifth place with a market share of 4.3 per cent, up slightly from the four per cent it had last year. Shipments were up a lot more, however, from 14.1 million units to 17.1 million, but despite this increase global Iphone shipments were down from the previous quarter. This is likely due to the anticipation of the Iphone 4S, which launched at the beginning of the fourth quarter. µ