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Smartphone Sales Q4 2009: A Record-Breaking Quarter
By Jeff Goldman
The global smartphone market broke records in the fourth quarter of 2009, with Strategy Analytics reporting that 53 million smartphones were sold in the quarter, a 30 percent increase from 41 million in Q4 2008.

"This was the strongest period of growth since Q3 2008, and smartphones are leading the handset industry out of recession," says Strategy Analytics senior analyst Tom Kang. "Sales are being driven by stronger consumer demand and a stream of attractive new 3G models tempting buyers into retail stores."

In 2009 as a whole, research firm IDC says a total of 174.2 million units were shipped, a 15.1 percent increase from 151.4 million units in the previous year. Smartphones accounted for 15.4 percent of all mobile phones sold in 2009, up from 12.7 percent in 2008.

Looking forward

IDC says 2010 will continue to break records in terms of worldwide smartphone shipments, thanks in part to the increasing diversity of mobile operating systems.

"More advances are in store for 2010 as Symbian and Windows are expected to unveil new versions of their respective operating systems," says IDC senior research analyst Kevin Restivo. "These and other operating systems will compete with attention-grabbing intuitiveness and seamlessness, a thriving mobile application library, and a compelling user experience that tightly holds on to the user."

And Strategy Analytics director Neil Mawston says the smartphone market will become increasingly competitive in the coming year. "Samsung and LG have ambitious plans to grow volumes and expand their app stores, while emerging players like Dell and Huawei are strengthening their device portfolios and courting major operators," he says.

"The smartphone wars will be good news for consumers, but the fierce competition will inevitably place downward pressure on vendors' pricing and margins," Mawston adds.

ABI Research analyst Michael Morgan says the Android operating system will also be a key factor. "[Many] more handset vendors are trying to ramp up their smartphone strategies, and they're doing it on the back of Android," he says.

Still, Morgan says some manufacturers may do so a little too hastily. "Over the next year, you're going to have some people trying to jump in on Android who aren't that strong in the smartphone space -- they're just trying to put out a device with Android on it... so you're going to see a couple of first tries or beta phones," he says.

It's also an increasingly international market. Pyramid Research senior analyst Omar Salvador says that while the U.S. led the world in smartphone sales in 2009, China is likely to capture the lead by the end of 2010.
"Understanding local conditions will be vital for operators, smartphone vendors and OS developers, as operator strategies differ substantially across markets," Salvador says.

Individual vendors

With users seeking more and more functionality from their mobile devices, IDC senior research analyst Ramon Llamas says the fourth quarter of 2009 was a particularly good one for smartphone vendors.
"Four of the top five vendors established new shipment records for a single quarter, indicating strong demand in the market," he says.

Nokia led the market in Q4 2009, with a record 20.8 million smartphones sold worldwide, a 38 percent increase from 15.1 million units in Q4 2008. Key models for the company, according to IDC, were the 5800, N97, N97 mini, and 5530.

Research In Motion sold more than 10 million units in the fourth quarter of 2009, a record for the company. IDC says the company's sales were boosted largely by the launch of new devices like the Bold 9700 and Storm2 9550, along with significantly lowered pricing for RIM's Curve and Pearl models.

Apple's iPhone held third place with 8.7 million units sold, almost double the 4.4 million units the company sold in the fourth quarter of 2008. However, Apple's share of the global smartphone market dropped from 18.1 percent in Q3 2009 to 16.6 percent in the fourth quarter of the year.

Motorola took fourth place in the smartphone market for the quarter, with 2.5 million units sold, boosted by the launch of the Droid at Verizon Wireless and the CLIQ/DEXT at multiple carriers -- and HTC took fifth place with 2.4 million shipments.

Still, ABI's Morgan says Research In Motion continues to hold a unique position in the market as a whole.

"Their control over the OS, the hardware, and everything else allows them to bring to market great phones," Morgan says. "They have... a lot of experience and a large installed base, and they're continuously evolving their products as well."

And that's not just true for enterprise users. "Don't forget that RIM has also of late been having excellent success in the standard consumer market as well," Morgan says. "The regular Joe likes this device."
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