Analyzing the world's 11 biggest handset makers in Q1 2012

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Michael Morgan ABIThe numbers are in, and it's time to make sense of the data. ABI Research's Michael Morgan checks out the world's 11 largest branded cell phone makers in the first quarter of 2012, providing sales data as well as insight into their strategy and competitive position in the market.

Though most research firms only list the market's top five handset makers, ABI lists a full top 11 (and the firm is providing shipment numbers for all of the vendors listed).

A few notes: ABI's numbers represent "sell in," or phone shipments into the retail channel, rather than "sell out," or sales to consumers. Further, ABI's ranking only counts phones that carry the manufacturer's brand. Therefore, phones that bandy a carrier's logo without a hint of which company actually built the device are not counted.

And see ABI's first quarter 2009 rankingssecond quarter 2009 rankings , third quarter 2009 rankingsfourth quarter 2009 rankingssecond quarter 2010 rankingsthird quarter 2010 rankingsfourth quarter 2010 rankingsfirst quarter 2011 rankingssecond quarter 2011 rankings and fourth quarter 2011 rankings.

(And click here for a look at the first quarter earnings season, and here for a list of the top U.S. wireless carriers in the first quarter.)

First quarter 2012 market share by OEM

OEM shipments from first quarter 2010 to the first quarter 2012 

Overall smartphone shipments vs. non smartphones

Analysis from ABI's Michael Morgan

Samsung In Q1 Samsung took the handset shipment crown from Nokia which had held the No. 1 spot for over a decade. Additionally Samsung widened its lead in smartphone shipments over Apple with 42 million units shipped. With pre-orders of the Galaxy S3 already in the millions and the continued success of the Galaxy S2 and the 5" Galaxy Note 'Phablet,' it appears that Samsung will only widen its lead over competitors in 2012.
Nokia The No. 2 position is new territory for Nokia, as its handset shipments dropped 24% YoY and 27% sequentially. Nokia is not just losing share to competitors in the smartphone space where its shipments declined to 11.9 million from 19.6 in Q4 2011; Nokia's portfolio low end of devices also saw shipments decrease by 23 million from the previous quarter. The problem is not just a regional collapse as every region except North America saw a precipitous drop in shipments. To put it in perspective, Nokia's single quarter shipment decline is equal to ZTE and LG combined shipments this quarter. Two more quarters of this and Nokia will have to struggle to remain in the top ten. ABI Research believes it is time to put Nokia on death watch. 
Apple Apple's shipment decline of 5% can be attributed to seasonality and the regularly expected drop in shipments from a post launch quarter. Although ABI Research estimates shipments will decline again in Q2, this should not be viewed as a decrease in demand for iPhones, but a buildup in demand for the next iPhone expected to be released in Q3. If Apple can maintain its current rate of growth with its upcoming iPhone, ABI Research believes Apple could become the No. 2 handset OEM by 2013.
ZTE ZTE remains a bit of a dark horse in the global handset race, as it continues to show annual shipment growth and plans to double is smartphone shipments in 2012. ZTE continues to focus on becoming a globally recognized consumer brand and believes the U.S. will be its largest market by 2015. ZTE's low cost handsets are ideal for the growing interest in prepaid smartphones, but ABI Research believes that by 2015, China will be ZTE's (and others) best bet for smartphone sales. 
LG LG Shipments declined 44% YoY and the company continues to lose market share in the collapsing feature phone market. Despite LG's continued decline in shipments, the company did something highly remarkable in the handset industry: after 7 quarters in the red, LG is back in the black! ABI Research notes that historically when a handset company with declining sales slips into the red, over 90% of the time, the company never recovers and is either acquired or goes out of business. It has been LG's slowly improving performance in the smartphone segment that has taken the handset division off of life support, but ABI Research still believes this patient will require careful monitoring before a clean bill of health can be given.
Blackberry (RIM) RIM has faced numerous challenges over the past year which has led to sweeping changes in its top management. RIM's shipments continue to decline as its portfolio of devices continue to look somewhat archaic against its competitors in developed markets. While RIMs handsets continue to have a luke warm reception outside of North America, ABI Research believes that it was RIM's loss at home that sparked its general global decline. Furthermore in Q1, RIM was not profitable, which when combined with declining shipments is the telltale sign of impending doom for a handset company. Despite all signs pointing to serious trouble, it should be noted that RIM does have enough cash to keep running for another year and that RIM will release new BB10 smartphones before time runs out. If RIM can deliver the type of smartphones that will win back North American consumers, RIM could be one of the lucky few to come back from the red. Considering early demonstrations of the BB10 devices, ABI Research is not fully convinced that RIM is down for the count.
Huawei Historically considered a low cost Chinese handset OEM ,Huawei shares the international  stage with ZTE and TCL/Alcatel, as a rising star from China. Huawei has leveraged its prolific set of carrier infrastructure relationships to deploy its low-cost handsets in nearly every region. Huawei continues to grow from low-cost handsets to low-cost Android smartphones and like its Chinese brethren is one of the few OEM's that can deliver a sub-$150 smartphone today. With China's appetite for Apple's smartphones increasing every day, Huawei is seeking to move up the value stream with its smartphones and hopefully get a peice of Apple's pie.
Motorola As Google gains approval from China for its acquisition of Motorola, overall handset shipments continued to decline 2% YoY while smartphone shipments were up 20%. Despite the improved smartphone to feature phone ratio, Motorola failed to be profitable for the fifth consecutive quarter. With Samsung and Apple pushing other OEMs out of Motorola's primary U.S. market it will be increasingly important for  Motorola to find greater success overseas. Motorola will need to depend on more than the U.S. market if it does not want to be a weight on Google's profits and OEM relationships.
TCL (Alcatel) TCL is a well-known electronics brand in China that had formed a joint venture with Alcatel of France to leverage new markets and carrier relationships. For TCL this means strong growth of sales of entry- to mid-level devices in EMEA and LATAM. The Alcatel / TCL device portfolio is a mix of low- end candy bar devices and colorful clamshell devices with basic media capabilities.  Most TCL handsets are designed to meet the universal needs of all regions served by Alcatel and TCL, allowing for greater production volume per device model. TCL's effecient prodcution has allowed it to offer low-cost 3G handsets that are sought after by consumers moving from 2G. TCL is continuing to leverage its low-cost production capabilities to offer sub-$150 Android smartphones, and remains one of the few OEMs that can do that today.
Sony Mobile Sony Mobile Communications (formerly Sony Ericsson) will become the first handset OEM to fully complete a transition from feature phones to smartphones. While some issues are to be expected when simultaneously shifting product strategies and ownership, Sony has continued to grow its smartphone shipments but not its profits. ABI Research believes that with a 100% (currently at 90%) smartphone portfolio, Sony will have to begin finding its way to profitability in the very near future or its apperance in the top 10 list will be short lived.
HTC While technically not in the top ten this quarter, HTC's historic performance has earned itself a mention on this list regardless. HTC shipments experienced its second sequential 30% decline in a row. North America used to account for 50% of HTC shipments (currently 25%), but HTC's rush to produce LTE smartphones for the U.S. has been halted by terrible battery life, mediocre performance and the iPhone 4S. HTC has all but conceded the North American market to Samsung and Apple and will refocus on developing its presence in China and its new One series devices that ABI Research believes are the most technologically sophisticated devices HTC has ever accomplished.

 

The raw data

 

2012 Q1 Handset Shipment Market Share by OEM

Samsung 25.8%
Nokia 22.8%
Apple 9.7%
ZTE 5.2%
LG 3.8%
Blackberry (RIM) 3.1%
Huawei 2.9%
Motorola 2.4%
TCL (Alcatel) 2.1%
Sony Mobile 2.0%
HTC 1.9%
Other 18.3%

 

 

Handset Shipments by Vendor World Market: 1Q-2010 to 1Q-2012 (millions)
  1Q 2010 2Q 2010 3Q 2010 4Q 2010 2010
(full year)
1Q 2011 2Q 2011 3Q 2011 4Q 2011 2011
(full year)
1Q 2012
Nokia 107.8 111.1 110.4 123.7 453.0 108.5  88.5 106.5 113.5 417.0  82.7
Samsung  64.3  63.8  71.4  80.7 280.2  70.0  74.0  85.0  93.5 322.5  93.8
LG  27.1  30.6  28.4  30.6 116.7  24.5  24.8  21.1  20.0  90.4  13.7
SonyEricsson  10.5  11.0  10.4  11.2  43.1   8.1   7.6   9.5   9.0  34.2   7.3
Motorola   8.5   8.3   9.1  11.3  37.2   9.0  10.6  12.9  10.3  42.8   8.8
Blackberry  10.5  11.2  12.1  14.2  48.0  14.9  13.2  11.8  14.1  54.0  11.1
Apple   8.8   8.4  14.1  16.2  47.5  18.7  20.3  17.1  37.0  93.1  35.1
HTC   3.3   5.4   6.8   9.1  24.6   9.7  12.1  13.2  10.1  45.1   6.7
Huawei**   6.1   6.7   6.9   7.7  27.4   9.1  11.9  14.2  16.3  51.6  10.5
ZTE**   8.0   9.9   8.6   9.6  36.1  15.2  19.6  18.9  20.0  73.6  18.9
TCL
(Alcatel
Mobile
Phones)**
  2.9   7.6   9.0  12.5  32.0   7.7   8.9   9.4   8.1  34.0   7.8
Others  45.3  47.2  59.0  63.1 214.6  72.5  88.8  75.2  71.4 307.9  66.6
Total 303.0 321.2 346.2 390.0 1360.4 367.8 380.4 394.7 423.3 1566.2 363.0

 

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