Handset market contracted in 3Q

Global sales of mobile phones fell 3.1% to nearly 428 million units in the third quarter as demand of feature phones remains weak.
 
Yet smartphones continued to perform well, with sales rising 46.9% on year to 169.2 million units in Q3, according to research firm Gartner.
 
Anshul Gupta, principal research analyst at Gartner said after two consecutive quarter of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially.
 
“In China, sales of mobile phones grew driven by sales of smartphones, while demand for feature phones remained weak. In mature markets, we finally saw replacement sales pick up with the launch of new devices in the quarter.”
 
According to Gartner, smartphone sales accounted for 39.6% of total mobile phone sales in Q3, dominated by Apple and Samsung, both together had a controlled share of 46.5%, leaving a handful of vendors fighting over a distant third spot.
Following suit was RIM, which moved to the No. 3 spot, with HTC not far behind, at No. 4.
 
“Both HTC and RIM have seen their sales declining in past few quarters, and the challenges might prevent them from holding on to their current rankings in coming quarters,” said Gupta.
 
Apple’s iPhone sales rose 36.2% on year to 23.6 million units. The company is expected to have a strong Q4 thanks to the pending global expansions of iPhone 5 and the coming holiday season.
 
“With iPhone 5 launching in more territories in the fourth quarter, including China, and the upcoming holiday season Gartner analysts expect Apple will have its traditionally strongest quarter,” added Gupta.
 
Samsung’s mobile phones sales, meanwhile, continued to accelerate, totalling almost 98 million units in the third quarter (see Table 1), up 18.6% year-on-year. 
 
Samsung saw strong demand for Galaxy smartphones across different price points, which helped it further widen the gap with Apple in the smartphone market. The Korean handset maker sold 55 million smartphones in Q3, giving it a 32.5% in the global smartphone market.
 
Struggling Finnish handset maker Nokia, however, had a bad quarter with smartphone sales. It tumbled to No. 7, with 7.2 million smartphones sold in Q3, from the No. 3 spot in the second quarter. Though overall sales of mobile phone declined by 21.9% to 82.3 million units, it was better than Gartner’s early estimation, thanks to the increased sales of the Asha full touch range.
 
Gartner expects the arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter, although it won’t be until 2013 to see a significant improvement in Nokia’s position.
 
On the operating system side, Android continued to increase its market share in the smartphone market, up 19.9 percentage points in Q3. Although RIM lost market share, it climbed to the No. 3 position as Symbian is nearing the end of its lifecycle.
 
There was also channel destocking in preparation of new device launches for RIM, which resulted into 8.9 million sales to end users in the third quarter, Gartner said.
 
With the launch of iPhone 5, Gartner analysts expected iOS share will grow strongly in the fourth quarter because users held on to their replacements in many markets ahead of the iPhone 5 wider roll out. Windows Phone’s share weakened year-on-year as the Windows Phone 8 launch dampened demand of Windows Phone 7 devices.
  
While seasonality in the fourth quarter will help end-of-year mobile phone sales to end users, Gartner analysts said that there will be a lower-than-usual boost from the holiday season.
 
Consumers are either cautious with their spending or finding new gadgets like tablets, as more attractive presents, the research firm noted.
 
Table 1
Worldwide mobile device sales to end users by vendor in 3Q12 (Thousands of Units)
Company
3Q12
Units
3Q12 Market Share (%)
3Q11
Units
3Q11 Market Share (%)
Samsung
97,956.8
22.9
82,612.2
18.7
Nokia
82,300.6
19.2
105,353.5
23.9
Apple
23,550.3
5.5
17,295.3
3.9
ZTE
16,654.2
3.9
14,107.8
3.2
LG Electronics
13,968.8
3.3
21,014.6
4.8
Huawei Device
11,918.9
2.8
10,668.2
2.4
TCL Communication
9,326.7
2.2
9,004.7
2.0
Research in Motion
8,946.8
2.1
12,701.1
2.9
Motorola
8,562.7
2.0
11,182.7
2.5
HTC
8,428.6
2.0
12,099.9
2.7
Others
146,115.1
34.2
145,462.2
32.9
Total
427,729.5
100.0
441,502.2
100.0
Source: Gartner (November 2012)

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