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May 21, 2009

According to research firm Gartner, global sales of smartphones increased about 12.9 percent to 35.92 million units despite the largest contraction in overall handset sales since the firm began tracking them in 2001.

Global handset sales dropped about 14.5 percent from the last quarter, bottoming out at 269 million units.

Gartner reiterated its view that sales to wireless consumers will drop by another 4 percent this year when compared to last.

Gartner also attributed touchscreen technology to the popularity of smartphones.

Roberta Cozza, principal analyst at Gartner says “much of the smartphone growth during the first quarter of this year was driven by touchscreen products, both in mid-tier and high-end devices. Touch for the sake of touch was enough of a driver in the mid-tier space, but tighter integration with applications and services around music, mobile e-mail and Internet browsing made the difference at the high end of the market.”

But the attractiveness of smartphones isn't enough to turn around the entire mobile handset market. Although markets in North America and China showed some signs of recovery, Gartner still doesn't expect overall demand to stabilize until the second half of 2010.

The global handset market is expected to grow between 5 percent and 6 percent in 2010, again buoyed by smartphones.

Together with the conclusions of a recent report from Forrester research, it appears that smartphones are not only resilient to otherwise slumping demand but are reaching ubiquity. Forrester suggests that the hardware features attributed to smartphones are becoming so commonplace that the market will soon transition to a world “where we just have intelligent phones, not ‘voice phones,’ ‘smartphones’ and ‘feature phones.’”

For its part, Samsung not only returned to profitability but actually boosted its market share to 19.1 percent. Gartner expects Samsung to get a lift from the announcement of its first Android-based product, the i7500, which will help get the company through the “highly competitive second half of 2009."

The drop in sales hit handset manufacturers quite differently.

LG Electronics grew its market share by 1.9 percentage points on a “very strong portfolio of touchscreen, messaging and imaging devices.” But at the same time, Nokia, Motorola and Sony Ericsson all lost market share.

In 2008, Nokia’s market share actually dropped to 41.2 percent, down from 45.1 percent. Despite falling sales and an 18 percent decline in its handsets’ average selling price, Nokia still managed to maintain its position as the market leader, nevertheless.

Research In Motion's BlackBerry came in after Nokia in terms of market share, boasting a 19.9 percent market share on sales of 7.23 million units.

Motorola’s market share continued to deteriorate to 6.2 percent as the U.S.-based company "continued to experience significant difficulties even in its home market."

Sony Ericsson saw its market share fall to 5.4 percent, which Gartner attributed to a weak product portfolio.

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Source: Gartner.