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Nokia retained a substantial lead in the worldwide smart phone market in Q2 2010, achieving a 38% market share. But Nokia’s market dominance is not as unassailable as it once was, with its performance outpaced by growth in the smartphone market as a whole, which grew 64% annually worldwide in Q2 2010, according to Canalys market research firm.

Nokia shipped a record 23.8 million smartphones during the second quarter, representing growth of 41% on a year ago, as it focused on delivering affordable smartphone offerings to the market, such as its popular 5230 touch-screen handset, based on the Symbian operating system (OS). Shipments of RIM’s BlackBerry smart phones grew by 41%. Helped by the continued strong performances of devices such as the Curve 8520, it was once again the second placed vendor with an 18% market share, while also retaining its leadership position in North and Latin America. Despite a period of turbulent PR, initial shipments of the iPhone 4 were predictably strong and contributed to Apple’s 61% growth and worldwide market share of 13% for the quarter. But analysis of Canalys’ detailed, globally consistent data shows it is the collective growth of Android device shipments across a range of handset vendors’ portfolios that is most remarkable. With key products from HTC, Motorola, Samsung, Sony Ericsson and LG, among others, shipments of smart phones running the Google-backed Android operating system grew an impressive 886% in Q2 2010.

"The latest release of our [...] country-level smart phone shipment data for Q2 2010 clearly reveals the impressive momentum Android is gaining in markets around the world. In the United States, for example, we have seen the largest carrier, Verizon Wireless, heavily promoting high-profile Android devices, such as the Droid by Motorola and the Droid Incredible by HTC," said Canalys vice president and principal analyst Chris Jones.

The United States smart phone market grew 41% year on year. It is the largest smart phone market in the world by a significant margin, with 14.7 million units accounting for 23% of global shipments in Q2 2010. Android devices collectively represented a 34% share of the US market in the quarter, and with growth of 851% Android became the largest smart phone platform in the country.

"Android devices are gaining good traction in markets such as mainland China and South Korea, with growing numbers of consumers wanting more sophisticated smart phones," said senior analyst TY Lau from Canalys.

China was the world’s second largest smartphone market in Q2 2010 for the sixth consecutive quarter, with shipments of 6.9 million units representing 11% of the worldwide total. Android devices combined reached almost 475 thousand units in Q2 2010 from no presence in the country a year ago. It is also important to note that China Mobile is committed to developing its own platform, OMS, based on Android, and an additional 174 thousand smartphones shipped in the quarter running OMS.

"Nokia’s Symbian devices continue to dominate the market, but other vendors are clearly making good headway with Android in China. Motorola and Samsung, as well as local vendors, such as Dopod, Lenovo and Huawei, are achieving promising volumes on the platform, and Android devices held a 7% share in China this quarter," said Mr. Lau.

Growth in the worldwide smart phone market reflects the increasing importance of smartphones in device vendors’ and operators’ handset portfolios, as growing numbers of consumers appear eager to engage with mobile applications and connected services.

"Expect to see smart phones accounting for a growing proportion of the wider mobile phone market as they become increasingly affordable to more customers. By 2013, smart phones will grow to represent over 27% of shipments worldwide, with the proportion in some developed markets in Western Europe surpassing 60% and 48% in North America," said Canalys' senior analyst Pete Cunningham.

Tags: Google, Android, Apple, Nokia, Motorola, Samsung, Sony Ericsson

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