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In the third quarter of 2008, the global smartphone market reached its weakest year-on-year growth since Gartner began tracking the industry, the firm said. Worldwide smartphone sales to end-users totalled 36.5 million units in the third quarter of 2008, an 11.5% increase from the same period in 2007.

“The current economic climate is negatively impacting sales of higher-end devices. Going forward, we should expect the smartphone device market to continue to grow but at a slower pace. Although leading mobile operators are subsidising more smartphones, to reach lower prices they tie the device to two year contracts with monthly data plan rates which remain too expensive for the mainstream user,” said Roberta Cozza, principal analyst at Gartner.

Nokia Sustains Top Spot, Apple Posts 327% Annual Shipments Growth

Nokia maintained its No. 1 position with 42.4% market share in the third quarter of 2008, but for the first time it recorded a decline in sales of 3% year-on-year.

“Nokia is feeling the pressure from increased competition in the consumer smartphone market. The company introduced solid Nseries products with top features, but its lack of a commercial touch-screen device in its smartphone portfolio prevented Nokia from capitalising from consumer demand for this feature. The recently announced N97 is a much needed evolution for the n9x series of products. It is unfortunate that the device will not be available before the first half of 2009 as this is a competitive product in today’s market,” said Ms Cozza.

Sales of Research In Motion’s BlackBerry smartphones increased 81.7% in the third quarter of 2008. RIM continued to expand its presence within the consumer segment and refreshed its portfolio with new models and form factors. RIM sales will receive a boost from its new products in the fourth quarter, Gartner claims. Analysts said the Storm is RIM’s most important product launch to date and has the potential to be a major product for the company.

Apple regained its No. 3 position in the global smartphone market and improved its market share to 12.9% in the third quarter of 2008. Apple’s shipments into the channel during the third quarter of 2008 approached 7 million units. However, Apple built up around 2 million units of inventory and Gartner’s sales unit estimate reflects this. Apple’s sales increased more than four times compared to the same period in 2007 as a result of wider geographical availability, new business model and lower pricing.

Apple Mac OS X Outsells Microsoft Windows Mobile

For the smartphone operating system (OS) market, Symbian commanded 49.8% of the global sales to end users in the third quarter of 2008 and for the first time its share went below the 50% mark. Nokia’s decline in smartphone sales during the quarter, and continued weakness of the Japanese mobile device market, have impacted Symbian’s share. Gartner expects Symbian share to continue to erode next year but maintain its leading position in the market.

The success of iPhone 3G sales in the third quarter of 2008 propelled the Mac OS X to the No. 3 position in the global OS provider rankings. For the first time, iPhone sales exceeded sales of Microsoft Windows Mobile devices worldwide and in North America. In the shorter term, open-source initiatives like Android and Symbian Foundation will challenge Windows Mobile’s licensing model. In addition, the lack of a competitive user interface will continue to limit Microsoft’s mobile device usability when facing competitive consumer smartphones.

“In 2009, application portfolios will become one of the key strategic considerations for smartphone market players and, if successful, they deliver an alternative revenue stream and will improve consumer stickiness,” Ms Cozza said.

The USA Remains Top Market for Smartphones

On a regional level, North America was the fastest growing market, with a 68% increase in the third quarter of 2008. RIM and Apple did particularly well in the region with both vendors accounting for more than 70 % of the smartphone market in the third quarter of 2008. Apple regained second position behind RIM with 25.4% market share.

Smartphone sales in Europe, the Middle East and Africa (EMEA) increased 14% year-on-year. The region saw Nokia’s share decline nearly 8 percentage points in the third quarter of 2008 but still maintaining its leading position and saw Apple gain the No. 2 spot with 15.6 % share, moving in front of HTC and RIM.

The markets in Asia/Pacific and Japan declined 11 % and 23 %, respectively in the third quarter of 2008. In Latin America, despite the decline in sales for all handsets, the smartphone market grew 56 % in the third quarter of 2008. The sales were bolstered by the official introduction of Apple’s iPhone 3G across a dozen of countries.

Tags: Apple, iPhone, Nokia, RIM, Blackberry, HTC, Sharp

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