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Handset market shows signs of turnaround

Aug 7, 2009 — by Eric Brown — from the LinuxDevices Archive — views

Handset shipments improved slightly in the second quarter to 269 million units, but higher growth is expected later this year, says ABI Research. Meanwhile, DisplaySearch projected handset display shipments as falling by 11 percent in the first quarter, but sees big gains ahead, says eWEEK.

The 269 million handsets that shipped in the second quarter represents a modest improvement over the 253.5 million units ABI Research counted in the first quarter. However, this was still down sharply from last year. The 1Q numbers, for example, were said to have shown an 11 percent year-over-year decline. On the other hand, indicators point to more improved sales later in the year, as the research firm has revised its negative 8.1 percent forecast to a somewhat cheerier negative 7.5 percent expectation for the year.

The fortunes of individual vendors varied widely this quarter. Nokia, LG, and Samsung all showing market share growth, while Sony Ericsson, Motorola, and RIM lost ground, says the study.

Nokia was the surprise star performer, having suffered a contraction in share in the previous quarter, according to the research group, while RIM went in the opposite direction. Nokia beat expectations in "a remarkable swing in fortunes" with sales of 16.9 million units, compared to 13.7 million units in 1Q 2009, increasing its market share to 38.3 percent. Samsung, which recently introduced its first Android-based phone in the Samsung i7500 (pictured), was said to have seen its share grow 1.45 percent to 19.4 percent, while LG rose 2.2 points to 11.1 percent.

In the case of both Samsung and LG, especially, new smartphones were said to have driven growth. "It is well documented that smartphones are proving to be one of the main engines of growth, but they are not just benefiting the Tier 1 players," stated ABI practice director Kevin Burden. "A number of Tier 3 vendors are also making headway in a competitive market, including Apple and HTC but also vendors such as Huawei and ZTE."

Meanwhile, the increasing integration between hardware, operating system, and applications development platforms will lead to greater consolidation in the market, but not quite yet, says the research firm. "While a consolidation is widely expected in the industry, it will not be happening in 2009," stated Burden.

Handset display market hits bottom

The ABI Research story appears to be supported by a report on first-quarter mobile phone display shipments from DisplaySearch. Mobile phone display sales, which tend to foreshadow handset sales, fell by 11 percent, quarter-to-quarter in 1Q 2009 to 263 million units, according to a story in eWEEK by Michelle Maisto. The good news is that display shipments are expected to rise to 306 million in the second quarter and to 360 million units in the third.

Demand for high-end smartphones from market leaders are expected to boost mobile phone display shipments, DisplaySearch was said to have reported. For example, orders of low-end MSTN LCD displays are expected to drop to 369 million in 2009 from 448 million in 2008. The TFT-LCD and OLED displays used in smartphones, however, are expected to rise to 1.03 billion units in 2009, compared to 955 million units in 2008, according to DisplaySearch.

In addition, the research firm mentioned "white box" knock-offs of video-equipped models, especially in China, as further driving display sales. More than 20 percent of mobile phone displays went to Chinese brands and white-box manufacturers, reported DisplaySearch.

"Growth in mobile phone display shipments will be driven by demand from major mobile phone manufacturers such as Nokia, Samsung, LG, Sony Ericsson and Motorola, as well as Chinese brands including Huawei, ZTE as well as Tianyu and white box manufacturers," stated DisplaySearch's Hiroshi Hayase.

DisplaySearch pegged overall 1Q mobile phone shipments at 276.1 million, with Nokia representing 31.7 percent of the market and Samsung following with 18.5 percent, says eWEEK. DisplaySearch was also said to have reported that LG had 7.2 percent, Motorola 5.1 percent, Sony Ericsson 5.0, and RIM 3.4 percent of overall 1Q handset shipment share.

Despite driving the handset business over the last year, high-end smartphones still represent a small portion of overall shipments. In DisplaySearch's numbers, for example, Apple was said to have ranked number 10, with 1.2 percent share, and HTC, which sells Windows Mobile and Android phones, didn't even make the top ten.


More information on the 2Q handset shipment numbers from ABI Research may be found here. The eWEEK story on the DisplaySearch report about mobile phone display shipments should be here.

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