Smartphone sales jump 43 per cent year on year

Global smartphone sales in the second quarter were nearly 50 per cent higher than a year ago, new research shows.

Some 60 million smartphone units were shipped in the three months to June, according to Strategy Analytics, a 43 per cent increase on 2009 levels. Smartphones now account for nearly one in every five mobile phones sold worldwide.

Nokia managed to increase its market dominance despite its announcement yesterday of a sharp drop in profits, while as expected Apple's widely publicised signal strength issue on the iPhone 4 saw its own share of the market recede somewhat.

Strategy Analytics pinpointed operator subsidies, competition between vendors and an increasing number of low-cost smartphones built on Android and Symbian operating systems, as the key drivers behind the increase.

In Nokia's case, subsidies and heavy promotion seem to have played an especially big part in boosting sales. Reversing an earlier slide that saw it slip to 38.8 per cent share at the end of March, the Finnish handset maker has now pushed back past the 40 per cent barrier.

Apple, meanwhile, saw its market share slide to 14.1 per cent from the previous quarter's 15.9 per cent the inevitable result of the adverse publicity of its month-long public relations woes over reception problems on the new iPhone. It remains up on the 12.5 per cent share it held at the equivalent point last year, however.

"The Apple 'antenna-gate' saga highlights two key issues facing the global smartphone industry," Strategy Analytics analyst Neil Mawston wrote. "First, the risk of device failure for all vendors will continue to rise as smartphones become more complex to design. And second, smartphone vendors and operators can differentiate their brands by offering good after-sales service when things go wrong."

Last week Apple CEO Steve Jobs said the company will be supplying new iPhones with free rubber bumpers, which solve the reception problem, and would refund anyone who had already invested in one. However, this only came after a month of playing down the problem and advising customers to buy a bumper themselves.

RIM and its BlackBerry brand remained in second place behind Nokia, with its market share slipping slightly to 18.8 per cent, a drop of 0.3 per cent.

Strategy Analytics' Mawston warned that with levels of competition now matching levels of growth in the smartphone market, it was going to become more and more difficult for even established industry giants to make any significant inroads.

"The global smartphone industry is growing volume, but the industry's value is beginning to feel the effects of intensifying competition," Mawston wrote.

"Dozens of vendors from the telecoms, PC and consumer electronics industries are piling into the market and driving down prices. Even established brands such as Nokia, RIM, and Apple are finding it increasingly hard to raise prices and profits in the face of such fierce competition."