Smartphone shipments on the rise

Smartphone markets continue to forge ahead at an extraordinary pace. According to ABI Research, smartphones made up 19% of all handsets shipped in the second quarter; that represents a 12% increase over the first quarter, and a 50% jump compared to the same quarter in 2009.

Senior analyst Michael Morgan says that these remarkable growth rates are being driven by falling (often heavily subsidised) handset prices. Cost is no longer much of an obstacle, he stated: “One of the key remaining barriers to smartphone adoption in subsidized markets is now the cost of the data plan rather than the cost of the handset.”

Morgan said 10% would normally be considered very good quarter on quarter growth, but in the smartphone segment that would now be considered lackluster. The battle for supremacy is now escalating at a feverish pitch.

“The market is exploding,” he said, “But there are so many players and so many operating systems that the question becomes, ‘Can this market structure be sustained?’ Most observers say no; it needs to boil down to three or perhaps four key operating systems.”

In addition, the huge numbers of smartphones now connected in the US, especially iOS and Android models, are creating network capacity concerns that are sucking the value out of the mobile ecosystem, remarked Morgan.

Apple shipped about 8.4 million iPhones in Q2, of which about three million were iPhone 4 models that only launched a couple of weeks before the end of the quarter. Q3 results were even more impressive, posting a 68% quarter over quarter growth.

HTC also did very well, with shipments growing from 3.3 million to 5.3 million units the by the start of the third quarter, and its improvement continued through Q3.

RIM recently launched its latest OS but, said Morgan: “RIM hasn’t seen the full benefit of its OS launch yet,” with quarter on quarter growth moving only from 10.5 to 11.2 million shipments.