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Q1 mobile phone shipments jumped 19.8 percent: IDC

Smartphone adoption continues to fuel growth in the worldwide mobile phone market, which grew 19.8 percent year over year in the first quarter of 2011, according to International Data Corp. 

As mobile phone makers and carriers continue to make smartphones affordable, more first-time buyers are attracted to buy, helping drive sales for vendors, according to IDC?s Worldwide Mobile Phone Tracker. Smartphone growth was particularly evident in Asia/Pacific (excluding Japan), Middle East and Africa and Latin America.

?I dare you to find any other market that has shown year-over-year growth in this range,? said Ramon T. Llamas, senior research analyst at IDC, Framingham, MA. ?This is significant ? it shows that there is still room for the mobile phone market to grow.

?It also says, that if a lot of people have phones, there are lots of opportunities for marketers to reach [consumers],? he said.

Mobile phone vendors shipped 371.8 million units in the first quarter of 2011 compared with 310.5 million units during the same period last year. This translates to 19.8 percent growth.

Feature phones still represented the majority of mobile phone shipments but are under tremendous pressure from smartphones. While feature phones are not expected to disappear any time soon as demand is still strong, they do appear to be losing steam as a result of the popularity of smartphones, per the report.

Smartphones drive growth
?The major vendors are focusing on smartphones, which means more opportunities for marketers down the line,? Mr. Llamas said.

?Smartphones are the ideal platform to target a message because these are folks who spend a lot of money on their phones and probably have a lot of disposable income,? he said.

In the U.S., Verizon Wireless introduced two new smartphones ? the Apple?s iPhone and LTE-enabled HTC Thunderbolt ? during the quarter, helping to keep smartphones at the front of the overall market while feature phones continued to lose ground.

The market in Canada also grew thanks to smartphones.

The number of smartphones shipped in the Asia/Pacific region grew significantly although the market underperformed in Japan due to the impact of the earthquake and tsunami.

Android-based phones and iPhones helped grow the market in Western Europe while Alcatel, Huawei and ZTE Android devices helped drive sales in the mid-tier market.

In Latin America, carriers are moving customers to 3G networks, helping to boost smartphone shipments.

Vendor competition
?There is a lot of competition among vendors in smartphones,? Mr. Llamas said. ?We?ve seen a lot of growth for Android and expect it to be the out-and-out leader in smartphones.?

In the first quarter, smartphones accounted for approximately 23 percent of Nokia?s shipped volume,  19 percent of Samsung?s volume and 50 percent for Sony Ericsson.

While Nokia said it will embrace Windows Phone as its primary smartphone operating system, it continues to rely on current platforms until this strategy is fully realized.

Nokia shipped 108.5 million units during the first quarter, a 0.6 percent increase, and its market share totaled 29.2 percent.

Samsung?s shipments increased 8.9 percent for a total of 70 million units in the first quarter. Its market share was 18.8 percent.

It was a record first quarter for the company for shipment volume, helping Samsung to close the gap against market leader Nokia.

LG Electronics shipped 24.5 million units in the first quarter and had a market share of 6.6 percent. This was the third straight quarter unit shipments declined, dropping 9.6 percent for the quarter.

The company is looking forward to a better performance in the second quarter, when new products will be introduced, such as the Revolution, which will run on Verizon Wireless? LTE network, and the Big.

Apple also had a record quarter for unit shipments, with 18.7 million units shipped, a 114.9 percent increase over last year. The company?s market share was 5 percent.

Strong sales on Verizon Wireless helped boost Apple?s results as well as continued strong performance of the iPhone in developed economic regions.

ZTE shipped 15.1 million units, a 45.2 percent increase, and had a market share of 4.1 percent.
The company, which primarily sells low-cost feature phones, as a result of strong growth in places such as China and Latin America.

There was also significant growth in the ?others? category, which includes vendors such as Micromax, TCL-Acatel, Huawei and Research In Motion. This category posted a 46.4 percent increase in units shipped for a total of 135 million units. Its market share was 36.3 percent.

?People want to do more things with their phones so you can expect more smartphone growth down the road,? Mr. Llamas said.

Final Take
IDC's Mario Morales on mobile phone market