As the second-quarter earnings season comes to a close for the world's handset makers, it's time to start parsing the information to see which vendors slipped and which managed to get ahead.
Here are some of the big themes:
Growth, growth, growth
According to research firm IDC, the world's global cell phone vendors grew the market by 14.5 percent year-over-year in the second quarter, from 277.2 million unit shipments in the second quarter of 2009 to 317.5 million units during the second quarter of 2010. Further, according to research firm ABI, year-over-year growth among the world's smartphone vendors reached an astounding 35 percent in the second quarter of 2010.
Perhaps more importantly, it appears the good times are poised to continue.
"The second half is looking to have greater growth than the first half. ... It's getting a little ridiculous," quipped ABI's Michael Morgan, noting the cell phone market managed to shake off the drag of last year's global recession without a backward glance.
Of course, that growth has favored some more than others. For example, Nokia (NYSE:NOK) recorded year-over-year growth of just 7 percent, while Research In Motion (NASDAQ:RIMM) posted year-over-year growth of 40 percent, according to Strategy Analytics. And as ABI's Morgan noted, smartphone vendor HTC notched year-over-year growth of an astonishing 112 percent growth.
"Things are paying off for (HTC) and their Android strategy," Morgan said.
Interestingly, the growth of the cell phone and smartphone market leads directly into the next important trend from the second quarter:
Vendors across the spectrum--most notably HTC with the Droid Incredible for Verizon Wireless (NYSE:VZ)--struggled to meet shoppers' seemingly insatiable appetite for all things "smart" and "phone." Indeed, HTC's struggles in obtaining AMOLED screens from Samsung prompted the company to make a very public switch to Sony's "super LCD" screens in an effort to address demand.
"It seems like you can't feed the consumers fast enough," ABI's Morgan said, noting that the world's electronics suppliers will need to work hard to ensure they're ready to cash in on what likely will be a massive holiday shopping season. "You better get Santa's elves working on these things today so we make sure to have enough there for the fourth quarter."
The rise of tablets
"The iPad was actually a far more momentous launch for both Apple and the industry at large than the iPhone 4 because it creates a new product category," said Avi Greengart, an analyst with Current Analysis. Greengart said the Apple (NASDAQ:AAPL) iPad performed so well--shipping more than 3 million units so far--thanks in large part to the existing ecosystem it managed to tap into via Apple's iTunes and App Store offerings. But, Greengart said, "we're going to see additional products of that ilk."
Already, Motorola (NYSE:MOT), Hewlett-Packard, LG and Samsung and others have confirmed their intention to get into the tablet market. And such tablet efforts likely will span the operating system gamut, from webOS to Android to Windows.
Summed ABI's Morgan: "The only story (in tablets) is the iPad--and everyone else not being in that market."
The second quarter witnessed the introduction of the first 4G-branded handset in the United States: The HTC Evo 4G for Sprint Nextel (NYSE:S). And the carrier has already promised to introduce a follow-up WiMAX gadget, the Epic 4G from Samsung, at some point in the future.
Meantime, a phone bearing the same model number as MetroPCS' (NYSE:PCS) planned LTE phone, the Samsung SCH-r900, recently passed through the FCC's approval process. IDC analyst Ramon Llamas noted that WiMAX and LTE likely will stand as the next battleground for handset vendors keen on slicing into the cutting edge of wireless technology.
A blockbuster second half
There is no doubt that the first half of 2010 stands as a high water mark for smartphone innovation and handset market growth. But many expect the second half of 2010 kick the market into overdrive.
Indeed, later this year HP is poised to issue webOS 2.0, RIM is set to unveil BlackBerry OS 6, Microsoft will release Windows Phone 7 devices, Nokia will offer MeeGo, and Google may introduce a new version of Android. And the introduction of each of those platforms likely will coincide with the release of new hardware in time for the critical fourth quarter holiday shopping season. Analysts generally agreed vendors will continue to attempt differentiation through varying screen sizes, software advances, content offerings and other efforts.
For additional details on handset makers in the second quarter, including market share figures, unit shipment numbers and analyst commentary, click here. --Mike