Global Smartphone Sales to Reach 1B-Unit Mark by 2016

Sales of smartphones will exceed 420 million devices in 2011 - accounting for nearly 28 percent of the entire global handset market, and is expected to reach the 1-billion-unit mark by 2016, according to market analyst IMS Research.

“But despite the higher margins for smartphones, and the seemingly insatiable consumer appetite for converged devices, it is clear that not all OEMS are equally positioned to capitalize on this market trend,” said Josh Builta, analyst in IMS’ Mobile Technologies Group. “For instance, LG, despite being the third largest OEM in the world, has offered a fairly limited smartphone portfolio in recent years, a factor that resulted in the company reaching less than a three percent share of the total smartphone market in 2010.”


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At the same time Nokia saw its portion of smartphone market decline so dramatically that in early 2011 the company dropped the Symbian platform in favor of Microsoft’s Windows Phone OS. In 2Q 2011, Nokia reported smartphone sales fell to 16.7 million, down 34 percent from the same period in 2010.

“Clearly one of the key dynamics of the mobile handset competitive environment in recent years has been the inability of many traditional market leaders to recognize and adjust to the growing smartphone tier,” added Builta. “The reasons for these failures vary and include everything from poorly designed and manufactured devices, unsatisfactory user interfaces, and portfolios that don’t offer products with a differentiating feature. These lapses have created opportunities for newer entrants to the market, which they have aggressively pursued.”

In recent years, no company has flourished in this environment as much as Apple. Apple’s 2Q 2011 results in which it reported record sales of more than 20 million iPhones indicates it can be expected to remain an influential presence in the market despite the increased competition.

However, Apple is not alone in its success. Of the traditional handset manufacturers, Samsung has demonstrated the best results in recent years. Capitalizing on its diverse portfolio – which includes devices using the company’s own bada operating system along with Android and Windows Mobile – as well as its highly popular Galaxy series, Samsung smartphone market share increased from about three percent in 1Q 2010 to over 13 percent in 1Q 2011. At the same time smaller, dedicated smartphone vendors such as HTC have seen their position rise dramatically.

IMS Research