Mobile Phone Shipments Rebound To Double-Digit Growth in Fourth Quarter, According to IDC

FRAMINGHAM, Mass. January 28, 2009 - The worldwide mobile phone market grew 11.3% in
the fourth quarter of 2009 (4Q09), ending five consecutive quarters of retrenchment. According to
IDC's Worldwide Mobile Phone Tracker, vendors shipped 325.3 million units in 4Q09 compared
to 292.4 million units in the fourth quarter of 2008. Vendors shipped a total of 1.13 billion units on
a cumulative worldwide basis in 2009, down 5.2% from the 1.19 billion units shipped in 2008.
"The mobile phone market has rebounded in dramatic fashion," said Kevin Restivo, senior
research analyst with IDC's Mobile Phone Tracker. "The Asia/Pacific region and the United States
were primarily responsible for pushing the market back into growth territory. Overall, vendors
offered a wide array of converged mobile devices (smartphones) and messaging devices in the
seasonally strong fourth quarter, to take advantage of increased user demand."
"One area of the market that has consistently shown growth all year is the converged mobile
device market," said Ramon Llamas, senior research analyst with IDC's Mobile Devices
Technology and Trends team. "Consumer tastes for mobile phones have increasingly shifted
from simple voice telephony to greater data usage, and both handset vendors and carriers have
been eager to meet demand despite ongoing economic challenges. IDC believes that the
converged mobile device market grew nearly 30% year over year, and that the market will
continue to gain momentum as device selection increases and price decreases continue into
2010 and beyond."
Market Outlook
IDC anticipates that the worldwide mobile phone market will rebound in 2010. "In 2009, the
mobile phone market, like many others, contracted due to economic pressures. But as the year
progressed, demand for mobile phones increased each quarter while year-over-year declines
progressively decreased," adds Llamas. "Economic recovery mixed with pent-up demand will
create positive conditions for handset vendors in both developed and emerging markets in 2010.
Meanwhile, key handset vendors expect to exceed their 2009 shipment levels with refreshed
portfolios, leveraging interest in touchscreens, messaging devices, and converged mobile
devices."
Regional Analysis
• In Asia/Pacific (excluding Japan), 2009 as a whole was relatively flat year on year,
marked by a stronger preference for low-cost handsets in China and India as users
substituted away from more expensive options under recessionary pressure. However,
the Asia/Pacific market saw strong gains in 4Q09, reflecting a strong start to recovery.
Touchscreen-enabled devices remained a hot segment of the market, helping to drive the
demand for converged mobile devices across the region.
• The Western European handset market grew on both a year-over-year and sequential
basis in 4Q09. LG Electronics and Samsung performed particularly well thanks to their
collective strength in the traditional mobile phones segment while Apple, Nokia, and
Research In Motion helped sustain growth in the converged mobile device market. On a
full-year basis, however, shipments into the region still declined as the improved secondhalf
performance was not enough to offset the declines in the first half. In CEMA (Central
and Eastern Europe, Middle East, and Africa), vendors found pockets of improvement
during 4Q09, but overall sales in the region were focused on entry-level handsets
targeted at first-time users.
• The North American market finished 2009 relatively strong posting the second-highest
regional growth after the Asia/Pacific region (excluding Japan). Converged mobile
devices remained in high demand in the fourth quarter due to a combination of lower
priced devices and rate plans as well as greater user and carrier interest. However,
feature phones accounted for the majority of shipments last year despite an overall
volume decrease on a year-over-year basis. In Canada, mobile phone shipment volumes
were buoyed by the introduction of a new wireless network, which increased the demand
for smartphones, particularly the Apple iPhone.
• The Latin American mobile phone market shrunk in the fourth quarter. However, the
performance marked an improvement from the double-digit declines posted in previous
quarters. Stronger Brazilian currency pushed prices for mobile phone imports lower,
spurring greater demand. In Argentina, channel partners purchased additional product
ahead of a new tax rate that came into effect in December. Finally, the popularity of prepaid
service options across the regions included more converged mobile devices, stoking
greater demand from vendors.
Top Five Mobile Phone Vendors
Nokia ended the year with a strong fourth quarter performance. Shipments of 126.9 million in
4Q09 represented the company's highest quarterly total in two years (since 4Q07). The higher
handset figures were boosted by improved smartphone sales. Nokia introduced a number of new
smartphone models, including the X6, to various markets. When its handset shipment
performance is measured on an annual basis, however, Nokia shipped fewer devices in 2009
than in each of the last two years.
Samsung bested its single quarter record in 3Q09 by shipping 68.8 million units in 4Q09. The
company capitalized on growing interest in converged mobile devices with its Omnia2 while
addressing end-user demand for touchscreen and quick-messaging devices within developed
markets. In emerging markets, Samsung's attention to local market tastes and extended
distribution channels helped build its presence. Despite its heady growth, the company fell further
behind market leader Nokia while distancing itself ahead of LG Electronics.
LG Electronics followed last quarter's record-breaking shipment volume with a new record,
reaching 33.9 million units in 4Q09. However, operating margins took a sharp drop from 8.4% in
3Q09 to 1.3% in 4Q09, reflecting average selling price declines, higher marketing expenses, and
channel expansion within emerging markets. Still, the company continues to reap success from
its popular enV and Cookie products while building its converged mobile device portfolio with the
Android-powered GW620 and GW880 and Windows Mobile-powered GW820.
Sony Ericsson posted its sixth consecutive quarterly loss this month. However, the joint
venture's gross margins rose to 23% from 15% on a year-over-year basis, thanks to sales of new
higher-margin mobiles. The vendor's sales of 14.6 million handsets represented its highest
shipment figure of the year thanks to the introduction of new models such as the Satio and Aino.
It also announced the Xperia X10 and Vivaz models that the company says will be released later
this year.
Motorola ended 2009 with mixed results. The company posted its 12th consecutive quarter of
year-over-year shipment declines, but also reported its lowest year-over-year decline since the
first half of 2008. Moreover, Motorola recorded an operating loss of $132 million, a reduction of
nearly 80% from 4Q08 levels. In its first quarter, Motorola demonstrated how Android has
become a key component of its product portfolio, shipping 2 million units worldwide. Its DROID
and CLIQ/DEXT devices were shipped to more than 20 countries. It also recently announced the
BACKFLIP, MOTOROI, MT710, and the XT800 models, which are slated for release later in the
year.
Top Five Mobile Phone Vendors, Shipments, and Market Share, Q4 2009 (Units in Millions)
Vendor
4Q09
Shipment
Volumes
4Q09 Market
Share
4Q08
Shipment
Volumes
4Q08 Market
Share
4Q09/4Q08
Growth
1. Nokia 126.9 39.0% 113.1 38.7% 12.2%
2. Samsung 68.8 21.1% 52.8 18.1% 30.3%
3. LG 33.9 10.4% 25.7 8.8% 31.9%
4. Sony Ericsson 14.6 4.5% 24.2 8.3% -39.7%
5. Motorola 12.0 3.7% 19.2 6.6% -37.5%
Others 69.1 21.2% 57.4 19.6% 20.4%
Total 325.3 100.0% 292.4 100.0% 11.3%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 28, 2009
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Top Five Mobile Phone Vendors, Shipments, and Market Share, 2009 (Units in Millions)
Vendor
2009 Shipment
Volumes
2009 Market
Share
2008
Shipment
Volumes
2008 Market
Share
2009/2008
Growth
1. Nokia 431.8 38.3% 468.4 39.4% -7.8%
2. Samsung 227.2 20.1% 196.6 16.5% 15.6%
3. LG 117.9 10.5% 100.8 8.5% 17.0%
4. Sony Ericsson 57.1 5.1% 96.6 8.1% -40.9%
5. Motorola 55.2 4.9% 100.1 8.4% -44.9%
Others 238.6 21.2% 227.6 19.1% 4.8%
Total 1,127.8 100.0% 1,190.1 100.0% -5.2%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 28, 2009
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Mobile Phones - These small, battery-powered, voice-centric devices utilize operator-provided
cellular/PCS air interfaces for voice communication. They are designed primarily, in both form
factor and feature set, for a compelling mobile telephony experience, but may also include textmessaging
capability. Mobile phones may include a headset jack for hands-free operation as well
as a variety of features, such as personal information management, multimedia, games, or office
applications. Mobile phones exist at all points along the form factor, price point, and feature set
continua. Mobile phones that combine voice communications capabilities with pen or keypad
handheld data features are tracked within the Converged Devices category.
For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact
Kathy Nagamine at 650-350-6423 or knagamine@idc.com.
About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the
information technology, telecommunications, and consumer technology markets. IDC helps IT
professionals, business executives, and the investment community make fact-based decisions on
technology purchases and business strategy. More than 1,000 IDC analysts provide global,
regional, and local expertise on technology and industry opportunities and trends in over 110
countries worldwide. For more than 46 years, IDC has provided strategic insights to help our
clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company. You can learn more about IDC by visiting
www.idc.com.
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Contacts:
Kevin Restivo
416-673-2230
krestivo@idc.com
Ramon T. Llamas
508-935-4736
rllamas@idc.com
Michael Shirer
508-935-4200
press@idc.com