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Apple, RIM Eat Into Nokia's Market Share

While Nokia is still the overwhelming leader in the smartphone market, it's feeling increased pressure from high-end devices like the iPhone and the BlackBerry.

Nokia is still the leader in the smartphone market, but rivals Apple and Research In Motion are steadily increasing market share, according to a report by Gartner.

The report, titled "Market Share: Smartphones, Worldwide, 4Q08 And 2008," said Nokia shipped 60.9 million smartphones last year for a total market share of 43.7%. While this was more than twice the market share of the nearest competitor, it was a drop from 49.4% market share in 2007. The world's largest cell phone manufacturer is facing increased competition in the high-end department, and its paltry presence in the U.S. market could continue to hurt it as smartphone sales increase.

With compelling handsets like the BlackBerry Bold and the touch-screen Storm, RIM was able to capture second place with 16.6% of the market. Once the exclusive domain of business professionals, RIM said more than 40% of its subscribers are casual, or prosumer, customers.

Apple's iPhone 3G launch was a hit, and it propelled the company's market share from 2.7% in 2007 to 8.2% in 2008. Users were attracted to the faster mobile broadband capabilities, GPS, and the ability to access the App Store. Apple also benefited from having the iPhone 3G enter new markets like Japan and Russia.

Thanks to the success of handsets like the Touch Diamond and Touch Pro, HTC nabbed 4.3% of the market. This does not include the handsets it designs and creates for other companies like Sony Ericsson. Samsung was the fifth-largest smartphone seller in 2008, with 4.2% of the market.

"In general in 2008, the focus from vendors and operators on increasing their smartphone portfolios remained very strong," said Roberta Cozza, research director at Gartner, in a statement. "Samsung, RIM, HTC, and Apple saw their volumes and share increase during 2008, thanks to their ability to offer compelling device experiences and touch interfaces."

While the overall mobile market is expected to decline because of the global economic climate, Gartner still expects the smartphone market to grow in 2009.

Each year, InformationWeek honors the nation's 500 most innovative users of business technology. Companies with $250 million or more in revenue are invited to apply for the 2009 InformationWeek 500 before May 1.

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