Cell Phone Shipments Drop In Second Quarter

Economic concerns are sapping demand for cell phones, but smartphones like the iPhone 3GS continue to be a bright spot.
The global recession is still hurting the cell phone market, and mobile phone shipments were down 10.8% in the second quarter, according to data from IDC.

IDC said cell phone makers shipped 269.6 million units worldwide for the quarter, and the decline wasn't as bad as the previous quarter. The major issues facing the manufacturers during the quarter were channel destocking, foreign exchange volatility, and uncertain demand, IDC said.

Overall, the company expects the mobile market to decline about 13% for the year, and this is roughly in line with what companies like Nokia and Samsung have forecasted. IDC said the quarter wasn't all gloomy though, as smartphones continued to sell well and see high demand.

"Among the big handset vendors, Nokia, Samsung, Research In Motion, and Apple all beat expectations for smartphones within the second quarter," said Ryan Reith, senior research analyst with IDC, in a statement. "This demand for high-end mobile phones has created a price war among large mobile operators and handset vendors."

Nokia continues to lead the mobile market, as IDC said it held roughly 38.3% of the market. The company shipped over 100 million units for the quarter, and it launched high-profile handsets like the N97. Nokia did see its profits dip for the quarter, and it will be placing a stronger emphasis on software services and the U.S. market to counter this.

Samsung maintained its position as the second-biggest cell phone maker, and it had the highest year-over-year gains among the leading vendors. LG Electronics was in third place and found success with its mid-tier devices and smartphones. Motorola had 5.5% of the market to capture fourth place, and Sony Ericsson was the fifth-largest cell phone maker.

Apple is not within the top-five handset makers, but the company had a very successful quarter by selling smartphones with high profit margins. The company recently launched the iPhone 3GS, and the handset beat most expectations by selling a million units in its launch weekend.

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