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Worldwide smartphone sales totalled 32.2 million units in the second quarter of 2008, a 15.7%increase from the second quarter of 2007, according to Gartner market research firm. In addition, of all mobile device sales, smartphones’ share remained stable at 11%. Nokia Corp. remained its leading position, whereas Apple could only grab 2.8% of the market.

“Although global smartphone sales to end users [in the first half of 2008] reached 64 million units, up 22% compared with the first half of 2007, sales increased at a lower rate than in 2007. The current economic environment continues to negatively impact the market, limiting consumer spending and replacement purchases in general. In addition, smartphone sales slowed down as a result of new compelling touch technology mainly available on enhanced phones (based on proprietary operating systems) rather than smartphones,” said Roberta Cozza, principal analyst at Gartner.

Although Nokia held the No. 1 position with a 47.5% market share in the second quarter of 2008, its year-over-year growth was about half of the market average. Nokia faced increased competition in the consumer smartphone market, which had an impact on its year-on-year performance.

“To stay competitive, Nokia will need to introduce more design variations amongst its N-series models and keep innovating. The expected introduction of a touch-screen smartphone in the second half of 2008 will test the company’s capability to show differentiation and innovation,” Ms. Cozza added.

Research In Motion (RIM) recorded another strong quarter. The vendor’s smartphone sales were up 126% year over year, and the company’s market share nearly doubled compared with the second quarter of 2007. RIM continued to execute well at the consumer level, increasing its global market reach. In the second half of the year, the company is expected to launch smartphones based on new form factors, which are necessary to keep pace with the competition at the consumer level.

HTC gained the No. 3 position during the second quarter of 2008, moving up from the No. 7 ranking in the first quarter. HTC’s sales more than doubled year over year, but its overall share was flat at 4% compared with the first quarter of 2008. HTC continued to perform well during the second quarter primarily thanks to sales of its Touch product line.

In the second quarter of 2008, Apple’s share of global smartphone sales to end users decreased to 2.8% from 5.3% in the first quarter of 2008. The significant drop in sales was mainly due to the company having to clean the channel of first-generation iPhone units before the arrival of the iPhone 3G in June. Apple's sales figure in the second quarter of 2008 accounted for sales of inventory carried over from the first quarter of 2008. Gartner analysts expect iPhone sales to grow significantly in the second half of 2008, enabling the company to regain a top position in the global smartphone vendor rankings.

For the smartphone operating system market, Symbian commanded 57% of the global sales to end users in the second quarter of 2008 compared with 66% in the same period last year. Symbian's performance was affected by a 26% drop in unit sales in Japan and Symbian's licensee Mitsubishi exiting the market. Overall, Symbian's share declined as a result of a more competitive and fragmented mobile operating system market.

Sales of Microsoft Windows Mobile devices increased 20.6% year over year, with Microsoft's share remaining flat at 12% in the second quarter of 2008. Microsoft's strongest region in unit terms was North America, followed by Western Europe. Both regions combined accounted for 74% of global Windows Mobile sales.

On a regional level, the North American market remained among the fastest-growing markets in the second quarter of 2008 with an increase of 78.7% year over year. The region also accounted for almost 25% of the global smartphone sales to end users. Europe, the Middle East and Africa exhibited 21% growth year over year; Western Europe drove much of the growth in the region with a 29.3% increase. Finally, the markets of Asia/Pacific and Japan declined 4.8% and 24%, respectively.

“Wider availability of new touch smartphone models together with the global introduction of the iPhone 3G will help sales of smartphones return to stronger growth in the third quarter of 2008,” Ms. Cozza said.

Tags: Apple, iPhone, Nokia, RIM, HTC

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