Handset sales on the up, but competition is getting tougher

Handset sales on the up, but competition is getting tougher
The good news is that handset sales are on the rise in the first half of 2010 after a rocky 2009. The slightly bad news for most manufacturers is that margins are coming under pressure and are expected to get worse in Q3.

As far as Europe is concerned, it’s the smartphone end of the market that is growing fastest and increasing its overall share. The winners in that sector are undoubtedly Apple, RIM, Sony Ericsson and HTC, but Samsung is forcing its way back into contention with the Wave and Galaxy S.

All have increased their share, but generally this has come at the cost of lower margins. The one exception to that rule is Apple, which will be looking to capitalise on its position in Q3 with the iPhone 4.

RIM has posted the highest year on year gain among the top five manufacturers. It will be interesting to see if RIM’s growth peaks this year or whether it can pull something new out of the hat. That might be the BlackBerry Torch 9800 – unveiled this week, which combines a touch-screen and QWERTY keyboard and is the first device to use the new BlackBerry 6 OS.

HTC continues to make gains in leaps and bounds, its success driven by its Android powered handsets, in particular the Desire and Wildfire. Its shipments jumped by a spectacular 2.1 million units in Q2. If it keeps producing appealing handsets, it is likely to grow further.

Sony Ericsson’s fightback continued with another profitable quarter fuelled by the growing desire among European consumers for Android handsets, although it is still down on its market share one year ago.

However, LG really needs to refresh its portfolio and produce a real contender in the increasingly crowed smartphone space. Its handset division suffered a loss for the first time in Q2.

Finally, Nokia, the world number one, took another hit with a 40% decline in profit year on year. But this has to be seen in context. Nokia is still bigger than its next two rivals combined.

That said, it still needs to produce a smartphone that will really capture the public imagination. The N8 is due out at the end of Q3, but will it be enough for Nokia to reclaim its magic?
Written by Mobile Today
Mobile Today


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