BlackBerry, Not iPhone, Still Rules Smartphone Market

By Reuters  |  Posted 09-08-2008

BlackBerry, Not iPhone, Still Rules Smartphone Market

Blackberry maker RIM was the biggest winner in a slowing smartphone market in the second quarter, roughly doubling its market share from a year ago to 17.4 percent, research firm Gartner said on Monday.

The market was still dominated by Finland's Nokia, which sold 15.3 million phones with capabilities like e-mail and navigation, giving it a 47.5 percent share. But this was down from 50.8 percent a year ago as competition intensified in the consumer smartphone market.

"RIM continued to execute well at the consumer level, increasing its global market reach," Gartner analyst Roberta Cozza said in a statement.

Research In Motion (RIM) sold 5.6 million smartphones in April through June, up from 2.5 million a year ago, as it found new clients beyond its main business market.

"In the second half of the year, the company is expected to launch smartphones based on new (designs) ... which are necessary to keep pace with the competition at the consumer level," she said.

Gartner said Nokia needs to introduce more design variations among its N-series multimedia phones to stay ahead. The company has only tweaked its N-series lineup so far this year and many analysts expect it to lose more market share in smartphones in coming quarters.

Credit Suisse said it expects Nokia's smartphone market share to fall to 41.6 percent in 2009, hurting profit margins.

New Competition

NEW COMPETITION

"Longer term, we maintain our concerns regarding smartphone share in the face of new competition from the likes of RIM, Apple and HTC (High Tech Computer)," analyst Kulbinder Garcha at Credit Suisse said in a research note.

Gartner said global smartphone sales growth almost halved from the first quarter to 15.7 percent.

"The current economic environment continues to negatively impact the market, limiting consumer spending and replacement purchases in general," Cozza said, adding growth should pick up again in July through September.

"Wider availability of new touch smartphone models together with the global introduction of the iPhone 3G will help sales of smartphones return to stronger growth in the third quarter of 2008," Cozza said.

Apple's share of global smartphone sales fell to 2.8 percent from 5.3 percent in the first quarter of 2008 as it sold down inventories of first-generation iPhones before the launch of the iPhone 3G.

HTC sales more than doubled from a year ago to 1.3 million phones, lifting the company to No. 3 position from seventh place the previous quarter.

In smartphone operating systems, Symbian lost market share as the Japanese market declined and Mitsubishi exited the market. Symbian had 57 percent of the market in the second quarter, compared with 66 percent in the same period last year.

RIM had 17.4 percent of the market and Microsoft's Windows Mobile market share stood at 12 percent in the quarter.

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