Analyzing the world's 11 biggest handset makers in Q2 2012

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The 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 second 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, fourth quarter 2011 rankings and first quarter 2012 rankings.

(And click here for a look at the second quarter earnings season, and here for a list of the top U.S. wireless carriers in the second 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 Q2 Samsung maintained its handset leadership over Nokia and its smartphone leadership over Apple with more than 50 million smartphones shippped. Although  shipments of feature phones decreased by 6 million units sequentially, the launch of the Samsung Galaxy III helped Samsung increase its smartphone shipments by 7 million over the same period. 
Nokia

Despite the effects of seasonality and a weak Western  European economy, Nokia was able to deliver a 1.2% sequential growth in handset shipments. Despite Nokia's smartphone shipments dropping to 10.2 million, its Asha line of feature phones delivered a sequential growth in feature phone shipments of 3 million units. For better or worse, Nokia shipped as many Windows Phone smartphones as Symbian smartphones for the first time since switching to its Windows Phone strategy. ABI Research believes that the Windows Phone 8 announcement will have a detrimental effect on Nokia's WP7 smartphones in Q3 which could make Symbian Nokia's best-selling smartphone OS one last time.

Apple While a slowdown in Q2 shipments was expected, the 26% sequential drop did catch the market by surprise. ABI Research believes that the majority of the decrease in iPhone shipments is related to consumers holding off their next iPhone purchase until the iPhone 5 is released in late Q3. With the next iteration of the iPhone is promising to be a substantial improvement over the iPhone 4S, Apple will have to hit another home run to keep pace with Samsung's increasing dominance in the smartphone market.
ZTE For the first time in its history, ZTE has reached into the top 5 handset vendors. It safe to say that ZTE is no longer a dark horse in this race and is rapidly becoming an example to follow for other handset OEMs that are trying to maintain and grow market share. Having risen from the realm of low cost handsets and low end smartphones, ZTE's structure is well adapted to winning market share in an enviroment of shrinking ASP's and margins. ABI Research believes that ZTE's brand strength in its home market of China, will go a long way to keeping ZTE at the top of the list of global handset OEMs.
LG LG Shipments declined 47% YoY and the company continued to lose market share in the collapsing feature phone market. Unfortunately, LG gave up the coveted status of being a profitable handset OEM (a status it had returned to in Q1 ) claiming that increased marketing expenses pushed it to a 3% net loss while its handset ASPs declined 2% in Q2. LG will continue its strategy of focusing on LTE smartphones going forward, but ABI Research believes that winning in this space will be difficult for LG in markets outside of South Korea.
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. In Q2 Huawei outshipped TCL by a meager 30K units. Huawei's overall 1H profits dropped 22% from the same period in 2011, but growth is expected to return to Huawei in the second half. For what it is worth, Huawei has been selected as a new OEM partner with Microsoft and will be amoung the first to release a Windows Phone 8 smartphone.
TCL (Alcatel) TCL was able to show a 38.5% sequential growth in a quarter where most OEMs were citing competitive and macro economic excuses for their limited growth. Furthermore TCL delivered 2.2 million smartphone shipments in Q2 which represents a 1,220% growth YoY. TCL has also been able to grow its feature phone shipments and is actively gaining in the Chinese market. ABI Research believes that TCL is yet another Chinese dragon with the teeth to win at home and abroad, and will soon pass Huawei in terms of handset shipments.
Motorola With the acquisition complete and Motorola showing on the financial statements of Google, there is still a lot of speculation as to how Google will manage its $12 billion dollar baby. Due to the transitional nature of this quarter it is difficult to determine the true profitability of Motorola handsets this quarter but ABI Research estimates a decline in handset shipments as Motorola continues to live off of an aging line of devices in the US market. It will be important to watch Motorola's next batch of handsets to see if Google will help or hinder Motorola's efforts to return to growth and profitability.
HTC Q2 provided a slight rebound for HTC shipments and allowed to return HTC to the top ten list. However, HTC guidance insinuates that they may not be on the list next quarter. North America used to account for 50% of HTC shipments (currently 25%), but HTC's rush to produce LTE smartphones for the US has been halted by terrible battery life, mediocre performance and the continued success of Samsung in the Android space. HTC has all but conceded the North American market to Samsung and Apple and will refocus on developing its presence in China which continues to show very strong growth in smartphone sales. ABI Research believes that HTC will face a difficult time getting its revenue and shipment growth back on track until they can competed at the lower end of the smartphone price spectrum.
Blackberry (RIM) Q2 was a another disastrous quarter for RIM and its position has dropped to number 10 on the list, its lowest ranking since 2007. RIM is seriously considering strategic options such as licensing its software, while it pushed back the release date of its upcoming BB 10 devices until Q1 2013. ABI Research believes that BB 10 will be a competitive OS, but may arrive too late for RIM to remain in the top ten list. ABI Research believes that finding a company to buy or license BB10 will be very difficult considering that the competitors that need a new OS can't afford one, and those that can afford one, don't need it.
Sony Mobile All things considered, Sony Mobile did not have a particularly bad quarter when viewed against its competitors sequential and YoY growth rates. While Sony did drop out of the top ten this quarter, ABI Research expects that Sony can revisit the top ten, although it will likely come from a drop in shipments of its competition more than Sony's expected growth. Much like the Motorola acquisition, Sony has yet to put it's stamp on the devices that are currently in the market, but if it is done properly, Sony can offer Sony Mobile a treasure trove of technology, ecosystem and content support.

 

The raw data

2012 Q2 Handset Shipment Market Share by OEM

Samsung 26.0%
Nokia 23.1%
Apple 7.2%
ZTE 5.4%
LG 3.6%
Blackberry (RIM) 2.0%
Huawei 3.0%
Motorola 2.2%
TCL (Alcatel) 3.0%
Sony Mobile 2.0%
HTC 2.3%
Other 20.2%

 

Handset Shipments by Vendor World Market: 1Q-2010 to 1Q-2012
Vendor 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012
Nokia 107.8 111.1 110.4 123.7 108.5  88.5 106.5 113.5  82.7  83.7
Samsung  64.3  63.8  71.4  80.7  70.0  74.0  85.0  93.5  93.8  94.2
LG  27.1  30.6  28.4  30.6  24.5  24.8  21.1  20.0  13.7  13.1
Sony Mobile  10.5  11.0  10.4  11.2   8.1   7.6   9.5   9.0   7.3   7.4
Motorola   8.5   8.3   9.1  11.3   9.0  10.6  12.9  10.3   8.8   8.1
Blackberry  10.5  11.2  12.1  14.2  14.9  13.2  11.8  14.1  11.1   7.4
Apple   8.8   8.4  14.1  16.2  18.7  20.3  17.1  37.0  35.1  26.0
HTC   3.3   5.4   6.8   9.1   9.7  12.1  13.2  10.1   6.7   8.3
Huawei   6.1   6.7   6.9   7.7   9.1  11.9  14.2  16.3  10.5  10.8
ZTE   8.0   9.9   8.6   9.6  15.2  19.6  18.9  20.0  18.9  19.7
TCL (Alcatel Mobile Phones)   2.9   7.6   9.0  12.5   7.7   8.9   9.4   8.1   7.8  10.8
Others  45.3  47.2  59.0  63.1  72.5  88.8  75.2  71.4  66.6  74.0
Total 303.0 321.2 346.2 390.0 367.8 380.4 394.7 423.3 363.0 363.5