Apple, RIM Gain Market Share

Motorola saw a 29% decline in shipments, but a significant boost in profits due to its shift in focus to high-margin smartphones.

Antone Gonsalves, Contributor

May 17, 2010

2 Min Read

Research in Motion and Apple improved their rankings in the first quarter among the top 10 global cell phone makers, a market research firm reported Monday.

RIM and Apple rose to the fifth and sixth slots, respectively, and were the only companies whose smartphone brands saw an increase in shipments from the fourth quarter of 2009, iSuppli said. RIM's BlackBerry and Apple's iPhone product lines were ranked eighth and ninth, respectively, in the previous quarter.

In contrast, Motorola posted a 29.2% decline in mobile phone shipments quarter to quarter, to 8.5 million units from 12 million units. The drop caused the company's ranking to slide two positions to eighth place, iSuppli said.

RIM achieved the best results of the top 10 mobile phone makers, with shipments rising 3.6% sequentially to 10.5 million BlackBerrys. Apple shipped 8.8 million iPhones in the first quarter, an increase of 0.2%.

Motorola's decline is the result of the company's strategic decision to move away from low-margin, mass-market cellular phones and toward higher-profit products, such as the Droid and Backflip smartphones. As a result of the switch, Motorola saw significant improvements in profits in the first quarter, with its margin rising by 19 percentage points from the same quarter a year ago, iSuppli said.

"This shows that Motorola is on the right track in its product mix, focusing on more profitable devices like the Droid," iSuppli analyst Tina Teng said in a statement. "As the company works to transition its product line to smartphones tailored for social networking activities, and to reduce sales of lower-priced, lower-margin models, it stands to further enhance its profitability -- and perhaps reclaim some market share."

Smartphones represent the hottest segment of the cell phone market. Shipments of the advanced devices are expected to soar by 35.5% this year, compared to 11.3% for the overall handset market, according to iSuppli.

"Because of this, companies that are exclusively focused on this area, like RIM and Apple, have managed to move up to near the top-tier of the global cell phone business," Teng said. "This shows that the smartphone is reshaping the competitive landscape of the wireless business."

Overall, cell phone makers shipped 288.1 million handsets in the first quarter, a year-to-year increase of 13.8%, but a decline of 13.9% from the fourth quarter. Nokia continued to lead the global market with a 37.4% share, followed by Samsung, 22.3%; LG Electronics, 9.4%; and Sony Ericsson, 3.6%. Of the top four vendors, only Samsung did better than the industry average with only a 6.5% decline.

Rounding out the top 10 were RIM, with a 3.6% share; Apple, 3%; ZTE, 3%; Motorola, 3%; Huawei, 2.1%; and TCL-Alcatel, 1.8%. Even though the market shares were the same for some vendors, the actual number of shipments were different.

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