Competition in U.S. Smartphone Market Heats Up

Nov 03, 2010 — Allan Pulga

More people than ever are switching to 3G technology and handset makers are waging a fierce battle to attract them to their devices and operating systems. All of it makes for an exciting period for wireless retailers.

‘Ridiculous growth in smartphones’

As expected, smartphone sales are at an all-time high. ABI Research calls the pace of smartphone shipments “extraordinary,” as numbers jumped by 50 percent in the second quarter of 2010 over the same period of 2009, reported Matt Hamblen of Computerworld (Oct. 26).

Naturally, such massive adoption of new technology leads to long-term sustainability questions related to network capacity and data usage. New devices like the Apple iPhone 4 and the Android-running HTC Droid Incredible made up a large portion of the 61.8 million smartphones shipped in the second quarter.

Considering 321.2 million mobile phones were shipped in the period, smartphones comprised 19 percent of the total count. Year-over-year, smartphone shipments were 50 percent higher than the second quarter of 2009 and 12 percent higher than the first quarter of 2010.

ABI analyst Michael Morgan predicts smartphone growth will continue to surge to about 77 million-plus in the third quarter, or 23 percent higher than the previous period.

Apple vaults past RIM into top 5 global handset makers list

“Apple jumped past BlackBerry maker Research In Motion to become the world’s No. 4 handset maker in the third quarter, according to several research firms,” wrote FierceWireless’ Phil Goldstein (Oct. 29). “The move marks Apple’s entrance into the world’s top 5 handset vendor rankings.”

Goldstein also notes that “Apple’s ascent into the top 5 is important not only because it signifies the growing importance of smartphones in the overall handset market, but because the company has essentially relied on one model to propel its growth.”

In U.S. smartphone market, Android passes Apple and RIM

Meanwhile, in the U.S. market: “Google’s Android operating system had a successful third quarter, capturing about 44 percent of the (market) ahead of Apple and Research In Motion, according to (reports from NPD Group and Canalys),” wrote Chloe Albanesius of PC Magazine (Nov. 1).

NPD Group and Canalys reported that Android shipped 44 percent and 43.6 percent of U.S. smartphones, respectively, in the third quarter. According to NPD, this represented an 11 percent increase from the previous quarter. “Apple came in second with 23 percent, up 1 percent, followed by RIM, which declined from 28 percent to 22 percent to land in third place,” wrote Albanesius.

Ross Rubin, executive director of industry analysis for NPD, said much of Android’s quarterly growth came at the expense of RIM and not Apple. "The HTC EVO 4G, Motorola Droid X, and other new high-end Android devices have been gaining momentum at carriers that traditionally have been strong RIM distributors, and the recent introduction of the BlackBerry Torch has done little to stem the tide," he said in a statement.

Android growth benefits Motorola

“An aggressive launch of smartphones using Google’s Android software propelled (Motorola’s) mobile devices division’s revenue to rise 20 percent from a year ago as it shipped 3.8 million smartphones in the quarter,” wrote Roger Cheng of the Wall Street Journal (Oct. 29).

“Verizon has played a key role in the revival of Motorola’s mobile devices business, anointing two of its smartphones, the Droid X and Droid 2, as the carrier’s premiere products… to compete with AT&T and the iPhone. That dynamic, however, is poised to change if the iPhone comes to Verizon,” Cheng adds.

Sanjay Jha, Motorola’s co-chief executive says the company is aware of and planning for the iPhone’s “potential competitive pressure.”

Topics: Wireless Trends, Mobile Industry

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