This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

November 3, 2010

Mobile Market Growth

According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, the global mobile phone market grew by an impressive 14.6 percent in the third quarter of 2010 (3Q10). Driven in part by the fast-growing smartphone category, 3Q10 was the fourth consecutive quarter of double-digit growth for the industry.

Sometimes called "converged mobile devices", smartphones are enjoying a growing popularity with consumers and business people. That is why we now see the appearance of a second smartphone-only vendor (Apple) in the top five ranking. During 3Q10, Apple moved into the number four position worldwide, joining Research In Motion (RIM), maker of the Blackberry, as one of the world's largest mobile phone suppliers.

RIM has spent three quarters on IDC's leaderboard of the top five vendors. Although Nokia still owns almost one-third of the market, Apple and RIM posted the highest-growth rates among the top five vendors last quarter.

Regarding the worldwide outlook, IDC believes the mobile phone market will be driven largely by smartphone growth at least until the end of 2014. "The smartphone is becoming the focal point of the personal communications experience," noted Kevin Restivo, senior research analyst with IDC. "As a result, new market growth will be increasingly generated by smartphones. This year, we are expecting the smartphone sub-market to grow 55 percent year over year."

Despite continued economic sluggishness in some countries, the market in Latin America also grew because of higher smartphone adoption. Some vendors have targeted Latin America aggressively with entry-level models in an effort to steal market share from Nokia, the overall market leader in the region.

In the US, the growth of the smartphone market was driven by Apple's iPhone 4, RIM's BlackBerry Torch 9800, and Motorola's new DROIDs, all of which were launched last quarter.

Chipping away at market leader Nokia's sales, competitive forces emerged in the Asia/Pacific region, excluding Japan, last quarter. In Japan, mobile phone market growth was driven primarily by domestic vendors.

As smartphones increase in capabilities and usefulness to consumers and business executives, people will respond by continuing to buy more and more sophisticated handy devices.

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