Nokia’s Share Slips as Unbranded Phonemakers, Apple Gain Ground

Nokia Oyj’s mobile-phone market share tumbled to its lowest ever as unbranded Chinese device makers gained ground on the low-end, while Apple Inc.’s iPhones advanced in smartphones, researcher Gartner Inc. said.

Gains by so-called “white-box” vendors who sell small runs of cheap phones prompted Gartner to raise its forecast for full-year industry growth to 30 percent from 13 to 15 percent earlier, Carolina Milanesi, an analyst with Gartner’s Egham, U.K. unit, said in an interview.

“Nokia feels the heat most because these guys are competing directly with them in emerging markets on the low end,” Milanesi said. “Nokia’s performance didn’t get worse, it’s that the market is much larger so the share comes down.”

The Finnish company’s share of unit sales to end users was 28.2 percent, down from 36.7 percent a year ago, the first time since the second quarter of 2004 that it dipped below 30 percent, Milanesi said. Market shares of Samsung Electronics Ltd. and LG Electronics Inc. also shrank as they retained their second and third rankings, the Stamford, Connecticut-based researcher said.

Apple rose to fourth place, edging out Research In Motion Ltd., Sony Ericsson Mobile Communications Ltd., and Motorola Inc. as smartphone sales nearly doubled, reaching 19.3 percent of all handset sales.

Taiwan’s HTC Corp. and China’s ZTE Corp. and Huawei Technologies Co. rounded out the top 10 vendors. The “others” category of phonemakers outside the top 10 expanded to 33 percent of the market.

Emerging Markets Sales

White-box vendors now sell through market stalls and mom-and-pop retailers in India, Russia, the Middle East and Africa and Latin America, where the operators don’t own the channel, Milanesi said.

“It’s not just an increase in connection numbers, because there our forecast has been in line, it’s more people who were forced before to buy a secondhand phone -- now they can buy a brand-new phone,” she said, likening the growth of white-box vendors to the way IKEA stores made new furniture inexpensive.

Global sales of all models of mobile phones to end users gained 35 percent in the third quarter to 417 million units, Gartner said. Smartphones sold 80.5 million units.

Symbian, Nokia’s main smartphone system, declined to 36.6 percent of unit sales while Google Inc.’s Android gained to 25.5 percent from 3.5 percent a year ago. As much as 80 percent of smartphone sales at Verizon Wireless were Android, which is also used on tablets, Gartner said. The researchers expect industry tablet sales to reach 54.8 million units next year.

Smartphones

Nokia kept its lead among smartphone brands with a 33.7 percent share compared with 39.3 percent last year, Milanesi said. Rival Android is used in handsets from more than a dozen vendors including Samsung, Sony Ericsson, Motorola and HTC.

ZTE, the world’s ninth largest handset vendor, has introduced an Android phone costing less than 100 pounds ($160) on an Orange prepaid plan in the U.K., Gartner said.

“We expect to see a good Android experience next year at the 200 to 250 euros price point because the technology cost is coming down,” Milanesi said. Low-cost Android devices may not give the same pleasure as expensive ones because of slower processors and inferior screens, she said.

Following are tables of total mobile-phone and smartphone sales, as well as market shares:

Worldwide Mobile Phone Sales:
           Units Q3’10  Share Q3’10  Units Q3’09  Share Q3’09
            (millions)   (percent)   (millions)   (percent)
Nokia         117.5         28.2        113.5        36.7
Samsung        71.7         17.2         60.6        19.6
LG             27.5          6.6         31.9        10.3
Apple          13.5          3.2          7.0         2.3
RIM            11.9          2.9          8.5         2.8
Sony Ericsson  10.3          2.5         13.4         4.3
Motorola        9.0          2.1         13.9         4.5
HTC             6.5          1.6          2.7         0.9
ZTE             6.0          1.4          4.1         1.3
Huawei          5.5          1.3          3.3         1.1
Others        137.8         33.0         49.9        16.1
Total         417.1        100.0        308.9       100.0

Worldwide Smartphone Sales by Operating System:
           Units Q3’10  Share Q3’10  Units Q3’09  Share Q3’09
            (millions)   (percent)   (millions)   (percent)
Symbian          29.5         36.6         18.3        44.6
Android          20.5         25.5          1.4         3.5
Apple iOS        13.5         16.7          7.0        17.1
RIM              11.9         14.8          8.5        20.7
Windows Mobile    2.2          2.8          3.3         7.9
Linux             1.7          2.1          1.9         4.7
Other             1.2          1.5          0.6         1.5
Total            80.5        100.0         41.1       100.0