Apple Joins Top Five Mobile Phone Vendors as Worldwide Market Grows Nearly 15% in Third Quarter, According to IDC

FRAMINGHAM, MA – October 29, 2010 – The worldwide mobile phone market grew 14.6% in the third quarter of 2010 (3Q10), the fourth consecutive quarter of double-digit growth, driven in part by the fast-growing converged mobile device category. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped 340.5 million units in 3Q10 compared to 297.1 million units in the third quarter of 2009.

The growing popularity of converged mobile devices, or smartphones, with consumers and businesspersons is evidenced by the appearance of a second smartphone-only vendor in the top 5 ranking. Apple moved into the number 4 position worldwide in 3Q10, joining Research In Motion (RIM) as one of the world's largest mobile phone suppliers. RIM has spent three quarters on IDC's leaderboard. Apple and RIM also posted the highest-growth rates among the top 5 vendors last quarter.

"The entrance of Apple to the top 5 vendor ranking underscores the increased importance of smartphones to the overall market. Moreover, the mobile phone makers that are delivering popular smartphone models are among the fastest growing firms," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker. "Vendors that aren't developing a strong portfolio of smartphones will be challenged to maintain and grow market share in the future."

Apple, RIM, and the vendors producing Android-based smartphones have put noticeable pressure on Nokia, the overall market leader. "Nokia still leads all vendors by a significant margin for converged mobile devices and mobile phones as a whole," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "However, Nokia's grip on the traditional mobile phone market has been somewhat loosened, as multiple Chinese vendors have gained ground, especially within emerging markets. To bolster its overall competitiveness, Nokia has been focused on improving its smartphone offerings."

Market Outlook

IDC believes the worldwide mobile phone market will be driven largely by smartphone growth to the end of 2014. "The smartphone is becoming the focal point of the personal communications experience," noted Restivo. "As a result, new market growth will be increasingly generated by smartphones. This year, we are expecting the smartphone sub-market to grow 55% year over year."

Regional Analysis

— Competitive forces emerged in the Asia/Pacific (excluding Japan) region

last quarter to the detriment of market leader Nokia. In emerging

markets, brands such as Micromax, Nexian, and i-Mobile chipped away at

Nokia's market share. Android-powered smartphones also gained momentum

across the region at the expense of Nokia. Samsung gained ground in

South Korea while Huawei, Lenovo, and ZTE launched devices in several

markets. In Japan, mobile phone market growth was driven primarily by

domestic vendors Sharp, Panasonic, Fujitsu, and NEC.

— The Western European mobile phone market's growth was largely

attributable to smartphones, which grew thanks to the iPhone 4 and

Android-powered devices from HTC and Samsung. Demand was also stoked by

large operator device subsidies that helped to keep consumer interest in

smartphones high. At the same time, the CEMA handset market grew slowly

in 3Q10. As a result, smartphone volumes are growing substantially but

still only comprise one-fifth of total shipments for the regions

combined. This is modest compared to more economically-developed

regions.

— The United States mobile phone market was characterized by growth in the

smartphone market. Grabbing headlines were the Apple iPhone 4, RIM's

BlackBerry Torch 9800, the HTC EVO 4G, and Motorola's new DROID X and

DROID 2, all of which were launched last quarter. Not to be overlooked

was Samsung's Galaxy S smartphone lineup, which were launched at all of

the major carriers last quarter. Traditional mobile phones, meanwhile,

fought back with smartphone-like functionality, but saw their overall

share of the market continue to decline. In Canada, Android-powered

handsets gained momentum as Samsung, LG, Sony Ericsson and Motorola

shipped new models. Huawei and ASUS, low-cost providers of Android

devices, entered the market. RIM's BlackBerry Torch was announced while

the iPhone 4 was introduced to great fanfare.

— Despite continued economic sluggishness in some countries, the Latin

American region grew as a result of higher smartphone adoption. Vendors

like Alcatel, ZTE, and Huawei have targeted Latin America aggressively

with entry-level models in an effort to steal share from Nokia, the

overall market leader in the region. These models are lower-cost product

offerings designed to meet the needs of basic users. Motorola's