Smartphone market growth slows in Q3

By Giselle Tsirulnik

December 30, 2008

BlackBerry

The smartphone market reached its weakest year-over-year growth in the third quarter of 2008, according to market researcher Gartner.

Third-quarter worldwide smartphone sales to end-users totaled 36.5 million units, an 11.5 percent increase from the same period in 2007. What is causing this weak growth?

The current economic climate is negatively impacting sales of higher-end devices, according to the Gartner study.

Nokia maintained its No. 1 position with 42.4 percent market share in the third quarter of 2008, but for the first time it saw a decline in sales of 3 percent year-over-year. Nokia is feeling the pressure from increased competition in the smartphone market.

Sales of Research In Motion's BlackBerry smartphones increased 81.7 percent in the third quarter of 2008.

Apple's iPhone shaping mobile industry

RIM continued to expand its presence within the consumer segment and refreshed its portfolio with new models such as the BlackBerry Storm.

RIM sales will receive a boost from its new products in the fourth quarter. Analysts said the Storm is RIM's most important product launch to date and has the potential to be a major product for the company.

Apple regained its No. 3 position in the global smartphone market and improved its market share to 12.9 percent in the third quarter of 2008.

Apple's shipments into the channel during the third quarter of 2008 approached 7 million units.

Apple's sales increased more than four times compared to the same period in 2007 as a result of wider geographical availability, new business model and lower pricing.

For the smartphone operating system (OS) market, Symbian commanded 49.8 percent of the global sales to end users in the third quarter of 2008 and for the first time its share went below the 50-percent-mark.

Nokia's decline in smartphone sales during the quarter, and continued weakness of the Japanese mobile device market, have impacted Symbian's share.

Gartner expects Symbian share to continue to erode next year but maintain its leading position in the market.

The success of iPhone 3G sales in the third quarter of 2008 propelled the Mac OS X to the No. 3 position in the global OS provider rankings. For the first time, iPhone sales exceeded sales of Microsoft Windows Mobile devices worldwide and in North America.

In the shorter term, open-source initiatives such as Google's Android and Symbian Foundation will challenge Windows Mobile's licensing model.

In addition, the lack of a competitive user interface will continue to limit Microsoft's mobile device usability when facing competitive consumer smartphones.

On a regional level, North America was the fastest growing market, with a 68 percent increase in the third quarter of 2008.

RIM and Apple did particularly well in the region. Both vendors accounted for more than 70 percent of the smartphone market in the third quarter of 2008.

Apple regained second position behind RIM with 25.4 percent market share.

Smartphone sales in Europe, the Middle East and Africa (EMEA) increased 14 percent year over year.

The region saw Nokia's share decline nearly 8 percentage points in the third quarter of 2008 but still maintaining its leading position and saw Apple gain the No. 2 spot with 15.6 percent share, moving in front of HTC and RIM.

The markets in Asia-Pacific and Japan declined 11 percent and 23 percent, respectively, in the third quarter of 2008.

In Latin America, despite the decline in sales for all handsets, the smartphone market grew 56 percent in the third quarter of 2008. The sales were bolstered by the official introduction of Apple's iPhone 3G across a dozen of countries.