Apple could pass Nokia as smartphone leader this year

IDC Smartphones Q1 11

Global smartphone shipments grew 79.7 percent in first quarter 2011, according to IDC, which released numbers today. Apple moved into second place, pushing ahead of ailing Research in Motion and closing the distance on Nokia. Manufacturers shipped 99.6 million smartphones in the quarter, up from 55.4 million units a year earlier.

Most surprising is Apple's change with respect to Nokia. In Q1 2010, 12.8 million units separated the two handset manufacturers. Last quarter, Apple closed the distance to 5.5 million. Given Nokia's transition to Windows Phone 7 and Apple's continued carrier expansion, particularly China and the United States, it's conceivable Apple could match or pull ahead of Nokia during 2011.

From a growth perspective, the quarter belonged to Samsung and HTC, which posted 350 percent and 230 percent year-over-year growth, respectively. The smartphone wars are fully engaged, with no clear winner in sight -- if there will ever be one -- despite the Nokia-Apple horse race.

"The relatively nascent state of smartphone adoption globally means there is ample room for several suppliers to comfortably co-exist, at least for the short term." Kevin Restivo, IDC senior research analyst, said in a statement. Top-ranked Nokia ships mobiles with Symbian (ahead of a transition to Windows Phone); Apple phones have iOS; and third-rank RIM offers BlackBerry OS. Then there is fourth-ranked Samsung, which is doing well shipping a variety of different operating systems. If anything, fragmentation defines the smartphone market right now -- at least as measured by leading vendors.

Then there is HTC and Samsung growth, which comes in part from Google's mobile OS. "The rise of Android as a prominent mobile operating system has allowed several suppliers to gain share quickly," Restivo said. Year over year, Samsung market share rose from 4.3 percent to 10.8 percent, while HTC pushed up from 4.9 percent to 8.9 percent. But shipment gains are more impressive, with Samsung more than quadrupling and HTC more than tripling smartphone shipments.

Meanwhile Nokia and RIM lost share, 38.8 percent to 24.2 percent and 19.1 percent to 14 percent, respectively. Nokia smartphone shipments rose by nearly 3 million, while RIM's were 3.3 million higher. By comparison, Apple shipments rose 114.4 percent, with market share up 3 points to 18.7 percent and shipments up 10 million to 18.7 million.

More broadly, the market has hit its stride, Ramon Llamas, IDC senior research analyst, says in a statement:

Conditions in the smartphone market are creating a perfect storm for sustained smartphone growth.

  • First, vendors are increasingly emphasizing smartphones as the key to their own growth.
  • Second, selection has proliferated from mostly high-end devices to include more mid-range and entry-level offerings.
  • Third, pricing has become increasingly competitive, with even high-end devices available at low price points.
  • Finally, users continue to seek greater utility from their mobile phone beyond voice, and smartphones have been the ideal solution.

Altogether, these add up to continued smartphone growth throughout the year.

The race to watch is between Apple and Nokia. Anyone want to bet on a winner? Or state odds? You know what comments are for.

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