Smartphone sales to continue to grow

Smartphone penetration is forecast to make up 70% of the European market by 2012, despite consumers reining in spend during the recession.

iPhone

The latest report by Gartner, the technology research company, says demand for brands such as the Apple iPhone and RIM’s BlackBerry will continue to rise over the next few years.

Carolina Milanesi, Gartner research director says touchscreen and qwerty keyboard devices remained a major driver for replacement sales.

“Given the higher margins, smartphones offer the biggest opportunity for manufacturers. It is the fastest-growing market segment and the most resistant to declining ASPs [average selling price],” she says.

Gartner has revealed that worldwide mobile phone sales totalled 286.1 million units in the second quarter, a 6.1% fall from the second quarter of last year.

In contrast, smartphone sales surpassed 40 million units, which was a 27% rise from the same period last year, representing the fastest-growing segment of the mobile-devices market.

Milanesi says that while Nokia has maintained its leadership position, its portfolio remains heavily skewed toward low-end devices.

“The right high-end product and an increased focus on services and content are vital for Nokia if it wants to both revamp its brand and please investors with a more promising outlook in ASPs and margins,” she says.

The Gartner report says that while Motorola’s sales of 15.9 million units were slightly better than expected, its presence has increasingly concentrated on the Americas, and it has lost most of its share of the Western European market.

Motorola’s rivals and consumers are now awaiting the launch of its new Android-based products planned for the fourth quarter of the year.

In Sony Ericsson’s case, Gartner points out that its market share dropped 2.8 percentage points year-on-year in the second quarter of 2009 but its volume dropped a whopping 41%. Gartner has attributed its poor performance to its uncompetitive range of handsets.

“Sony Ericsson has neglected to exploit key trends such as qwerty products for messaging and e-mail, internet browsing and navigation,” Milanesi says.

“If it wants to build the presence of its three new products announced this quarter in the channel and capture Christmas sales, the products need to come to market early in the fourth quarter of 2009.”

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