Apple cracked the top five rankings for the first time ever during the third quarter of 2010, but dumb-phone stalwart Nokia (NOK) retained its market share lead, followed by Samsung and LG Electronics, according to data released by IDC last week.
Nokia's stock dropped 2.2% Monday to close at $10.46. Shares have declined over 17% in the last year. —For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.
The worldwide phone market grew 14.6% this quarter, driven largely by the growing popularity of smartphones. Not surprisingly, Apple and BlackBerry-maker Research in Motion (RIMM) posted the highest growth rates among the top five vendors this quarter.
"As smartphones vendors move, so does the market," IDC senior analyst Kevin Restivo told TheStreet. "Those smartphone makers that are generating unit growth are really pushing the market forward."
(RIMM) As Apple and RIM have developed distinct products, handset competitors -- and particularly those with Android-based operating systems -- must come up with new ways to differentiate their smartphones if they want to become market leaders going forward, said Restivo.
Sony (SNE) Ericsson, despite growing its market share in Japan at the expense of Apple, missed the top 5 list for the first time since IDC started tracking mobile phone shipments.
Read on for snapshots of the world's top mobile phone vendors.
Market share: 3.6%
Hot Geographies: U.S., Canada, Western Europe
Research In Motion fell to the No. 5 spot this quarter, despite posting a record number of unit shipments. The BlackBerry-maker shipped 12.4 million units, up from 8.5 million during the same period last year due to the success of the Curve 8520 and the touch-screen Torch models.
Despite a jump in shipments this quarter, some analysts fear that RIM will quickly lose ground to the iPhone and Android-based devices.
"Competition is only getting tougher and while RIM has made some improvements to its portfolio/OS, we don't believe it's enough to withstand the pressures in fiscal year 2012," wrote Oppenheimer analyst Ittai Kidron in a recent research note. Kidron downgraded the stock last week.
RIM revenue for the latest quarter increased 31% from the year-ago period to $4.62 billion, thanks to strong smartphone demand.
Market share: 4.1%
Hot Geographies: Western Europe, U.S.
Apple claimed its spot among the top five mobile vendors for the first time, capturing a 4.1% global market share last quarter. The iPhone-maker shipped 14.1 units this quarter -- jumping ahead of both RIM and Sony Ericsson.
The Cupertino, California-based company's growth was due largely to the iPhone 4, whose availability increased from five countries at its June launch to more than 85 by September. Last week, Apple launched its first online retail store in China, and sold out of iPhone 4s in less than 10 hours, according to blog M.I.C. Gadget .
Analysts predict even stronger growth trends for the iPhone going forward, expecting Apple to launch with the country's largest wireless carrier, Verizon (VZ) , early next year and to shift from single carrier to multi-carrier in many countries.
While the worldwide phone market grew around 14.6%, according to IDC, iPhone shipments were up 90.5%. Apple's success underscores the increasing importance of smartphones to the overall mobile phone market, Restivo said.
This quarter, Apple net income rose 70% to $4.3 billion on $20.3 billion in revenue, up from $2.5 billion in profit on $12.2 billion in revenue during the same period last year.
CEO Steve Jobs discussed the competitive nature of the smartphone market during Apple's post-earnings call, emphasizing that fragmentation within the Android platform would push developers towards Apple. He also said it was unlikely that RIM would catch up with Apple.
Apple rose 1.1% on Monday to close at $304.18. The company's stock has surged more than 60% in the past year.
LG Electronics' market share of mobile phones declined 2% over last year; the company captured 8.3% of the pie.
The company's net profit dropped over 99.2% due to lagging sales in its handset division, which posted its worst ever quarterly loss in history.
Operating loss margins in its handset business also dropped to 10.2% from 3.5% in the previous quarter, as LG has been forced to drastically slash prices of its mobile devices due to increased competition.
The company sold 28.4 million handsets in the quarter, down from 30.6 million in the year-ago period.
LG has struggled to keep up with peers in the smartphone race, although the company hopes that sales of its Android-powered Optimus One smartphone will put it back in the game.
In September, former CEO Nam Yong was replaced with a founding member of the LG conglomerate, Koo Bon-Joon, amid weak handset sales at the company.
"The smartphone presence is yet to be felt at LG," said IDC's Restivo.
LG, which is focused on "feature phones" -- low-end phones that lack the processing ability and features of smartphones -- is trying to find a niche for itself within the mobile market. "Unfortunately, that's not where the growth is," said Restivo.
Hot Geographies: Western Europe, U.S., Canada
In September, the company also raised its 2010 shipment outlook of smartphones from 18 million to 25 million.
"With Samsung, it's really like turning around a battleship," IDC's Restivo said. "12-18 months ago, Samsung was nowhere in the smartphone market, but it has been able to grow leaps and bounds."
Going forward, Samsung is focused on enhanced competition in the emerging markets among both smartphones and low-end full-touch phones.
Hot Geographies: Western Europe, Japan, Latin America
Nokia is the top mobile phone vendor; nearly 1 out of every 3 devices in the world are produced by the Finnish company. While market share in the third quarter declined about 4% over last year, Nokia still leads its peers by a commanding margin both in the smartphone and mobile phone categories.
But Nokia shouldn't get too comfortable at the top, analysts say. The company posted only 2% growth in total mobile device shipments this quarter. While smartphone shipments increased 61% year-over-year, the price of these devices dropped from about $264 to about $188 as Nokia faces pricing pressure and a desire to reach more consumers.
In September, Nokia began shipments of its Nokia N8, the first Nokia smartphone based on next-generation Symbian 3 software. It also announced three additional Symbian smartphones that will be available before the end of 2010.
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