iSuppli: Smartphone Market Declines, Apple Continues To Grow

by Gaurav Kheterpal on May 12, 2011

Surprising as it seems, the smartphone market experienced a rare quarter-to-quarter downturn, with total global shipments of smartphones dropping 1.5% to 97 million units. These are the findings of a recent iSuppli report which indicates smartphone shipments dropped during the first quarter of 2011 but Apple iPhone shipments still jumped 15%.

So, is the so-called ongoing “smartphone explosion” a no-brainer? Has the smartphone industry hit a first major bump and the sequential growth would soon be a thing of the past? Not really, because the shipments reduced largely due to inventory issues and consumer demand for smartphones is still as strong as ever.

While Apple grew, Nokia shipments were down 14.5% sequentially, and Motorola shipments were down 16.3%. iSuppli says Apple’s iPhone sales were boosted by the introduction of its first iPhone model with code division multiple access (CDMA) as well as by the addition of Verizon Wireless as a carrier in the United States. Once upon a time, Android accounted for 80 percent of all smartphones sold by Verizon, with 46 percent of those coming from the Droid family. The Apple-Verizon deal cost Motorola heavily as a number of subscribers jumped ship to board the CDMA iPhone bandwagon.

Though Nokia still remains the No. 1 smartphone brand in terms of shipment volumes, Apple’s fast catching up and it now trails the former by just 5.7 percentage points, compared to 12.2 points in the fourth quarter of 2010. iSuppli says Nokia’s decline is largely due to its deal with Microsoft which “eliminated the incentive for consumers to buy its existing smartphone products, which are based on its Symbian and MeeGo operating systems.”

In yet another surprise, RIM outperformed expectations with its shipments rising by 4.2 percent. iSuppli says RIM’s growth is attributed to a number of factors including expanding sales in regions outside North America, new smartphones with NFC technology and a renewed focus on the enterprise segment.

Samsung finished in fourth place, with a negative 1.6 percent sequential growth rate; followed by HTC, which managed 6.2 percent sequential growth.

IMO, the decrease in shipments is marginal so it would be too early to make judgments about the future of smartphone industry. In fact, it’s a routine cycle with many electronic products such as TVs and gaming consoles where shipment volumes face a slump early in the year following holiday sales in the fourth quarter. iSuppli believes this isn’t a continuing downward trend and maintains its forecast of 60 percent growth in worldwide smartphone shipments for the entire year of 2011.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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