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Smartphone shipments grew 43 percent in second quarter

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August 2, 2010

Strategy Analytics just published a new report that reveals that smartphone shipments increased over 42.9 percent year-over-year to a tad over 59.92 million units in the second quarter.

The research firm also said that wireless handset shipments increased almost 13.1 percent in the same quarter to 308 million units.

Thanks to the success of the iPhone, Apple managed to ship 61 percent more of its units and the company held a 14 percent share of the smartphone market at the end of the quarter.

Apple reportedly shipped 8.4 million iPhones during the quarter, which was up from the 5.2 million it shipped in 2009, but still down from the 8.8 million iPhones it sold in the first quarter of this year.

Based on that single quarter-over-quarter decline, "the honeymoon period for Apple in the mobile world is clearly coming to an end," Strategy Analytics concluded in its survey.

"Healthy wireless operator subsidies, vigorous competition between premium-tier vendors and a growing range of lower-cost models continued to drive the upswing," analyst Neil Mawston wrote in the report.

Mawston also noted a "robust demand for Qwerty" devices, which helped BlackBerry-maker Research In Motion and Samsung make noticeable market share gains where most of their competitors lost some share in the second quarter of 2010.

But when it comes to handset shipments, Nokia is still number one with over 111 million units shipped and a better than 36 percent industry market share in the same quarter.

For its part, Samsung, it's next closest competitor in terms of market share, ended the quarter with 63.8 million units shipped and a 20.7 percent share of the market, while LG Electronics ended the quarter with 30.6 million units shipped, and a 10.1 percent market share.

Research In Motion and Sony Ericsson both profited of a 3.6 percent share gain with 11.2 million units and 11 million units shipped, respectively.

Finally, the group of "others" grabbed the remaining share of 26 percent.

"Overall, Apple was criticized a bit for its intensive production methods in China, while the iPhone has been heavily criticized for its poorly designed touchable antenna, and may have lost some market share in recent weeks because of its perceived mishandling of the antenna problem."

As such, Mawston wrote that the iPhone is "more vulnerable to competitive attacks from rivals like Nokia, Android, BlackBerry and Motorola."

The Apple iPhone 4 negative PR saga is in full force now! Any iPhone 4 user that wished for some kind of compensation or some encouraging words from Apple certainly didn't get any of that from Steve Jobs' botched video presentation yesterday. In fact, Jobs tried every trick in the book to do the exact opposite.

While most users already knew the odds were heavily against a recall of any sort, the constant pressure and accelerating negative press Apple has received in the last week over its iPhone 4 mounting antenna issues made it at least seem like a recall could be the most drastic outcome.

But we all know that this won't happen. Not any time soon anyway.

Instead, Jobs went barely one step above the bare minimum. Beginning one week from today, every iPhone 4 customer, including those that already bought the device, will be given one of Apple's “bumper cases” for free. WOW! Thank YOU big spender-Jobs!

Jobs' policy will stay in place through the end of September, at which he said there might be a better solution or, more likely, the fervor over “Antenna Gate” as he referred to it, will have died down... (Really?)

A lot could be hanging on that statement in light of reports that Apple knew about the problem well before launch. But again, just to be sure, Jobs called those reports a “crock.” Wow.

There is at least one key piece of evidence countering that claim though. Why, after three previous iPhone launches, did Apple decide to manufacture bumper cases (thin bands that only cover the exterior antenna, thereby avoiding contact with the user) for this iPhone?

Until the iPhone 4, Apple left cases and essentially every other add-on product for its iPhones to third-party manufacturers. So why the sudden change? Worse: is it possible that Apple had the 'bumpers' manufactured even prior to the iPhone 4 launch, just in case. Just in case? Well yes-- just in case the product backfires in their faces like it did over the last week!

Jobs typically kicks off most of his presentations with a smattering of positive news, but certainly not yesterday.

In a last-minute press conference that was scheduled to address the mounting criticism over Apple's antenna issues, Jobs said Apple wasn't even aware of the problems until after the device was launched. That's not what we read and heard...

There are numerous reports on the Web that Apple knew about the problem as early as May of 2009. One of its engineers even warned Jobs about it in a closed meeting.

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Source: Strategy Analytics.

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