Through the sheer force of its record-setting iPhone sales figures, Apple (NASDAQ:AAPL) displaced longtime stalwart LG Electronics to become the world's third largest handset vendor, according to research firm IDC. The figures are notable considering Apple reached the spot on sales of only smartphones, whereas other companies on the list sell both feature phones and smartphones.
Click here for rankings of the global handset and smartphone market in the fourth quarter, including market share and shipment figures.
Nokia (NYSE:NOK) and Samsung retained their spots as the No. 1 and No. 2 handset vendors by volume for the fourth quarter and full year 2011, but Apple's rise highlights not only the strength of its iPhone 4S sales but also LG's continued struggles to transition to smartphones.
Overall, the worldwide handset market grew 6.1 percent in the fourth quarter to 427.4 million units, according to IDC. However, feature phone sales declined faster than expected and while growth was higher than IDC's forecast of 4.4 percent growth for the quarter, it was still weaker than the 9.3 percent growth in the third quarter. "The mobile phone market exhibited unusually low growth last quarter, which shows it is not immune to weaker macroeconomic conditions worldwide," IDC analyst Kevin Restivo said in a statement. "The introduction of high-growth products such as the iPhone 4S, which shipped in the fourth quarter, bolstered smartphone growth. Yet overall market growth fell to its lowest point since 3Q09 when the global economic recession was in full bloom."
IDC noted that Apple's introduction of the iPhone 4S in October was the primary reason it was able to leap from fifth place to third. The company reported 37 million iPhone sales in the fourth quarter, up 128 percent from the fourth quarter of 2010. Apple also still sells its older iPhone 3GS and iPhone 4 models.
Meanwhile, LG shipped 17.7 million units in the quarter, weaker than the 30.6 million it shipped in the fourth quarter of 2010 and down from its 21.1 million in the third quarter. "LG's total volumes declined for the third consecutive quarter, sinking to levels not seen since the second quarter of 2007," IDC noted. "Driving this result was a combination of waning interest in its aging feature phones and stalled smartphone volumes. In addition, from a full year perspective, LG posted the largest full year-over-year decline among the leading vendors."
LG has vowed to fight back with more smartphones, especially those equipped with LTE, and the company's handset unit posted its first operating profit after six straight quarters of losses. However, IDC noted that other smartphone vendors have strategies similar to LG's and that the company's shipment volumes in the fourth quarter barely kept it ahead of Chinese vendor ZTE's 17.1 million. ZTE has become a fixture in the top five rankings the last several quarters, usually at No. 4 or 5. According to IDC, vendor shipments are branded shipments and exclude OEM sales for all vendors.
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