Dow Jones Newswires | Global sales of mobile handsets surged 17
percent in the first quarter driven by rising demand for smartphones
that also saw Research In Motion Ltd. and Apple Inc. grow market share
at the expense of Nokia Corp., IT research firm Gartner Inc.’s latest
market survey showed Wednesday.

Apart from smartphones, a rise in sales of cheaper, unbranded whitebox
handsets in some emerging markets such as India, also helped drive
mobile phone sales in the quarter, according to the research firm.

The first-quarter figures “are definitely good news for the market but the caveat is that a lot of it is coming from whitebox manufacturers in Asia…even though this is good news for the industry it is not such good news for the tier-one players, which are losing market share,” said Gartner’s research vice president Carolina Milanesi in a phone briefing following the report.

Gartner now expects global mobile phone sales to grow between 13 percent and 15 percent compared to its previous prediction of a rise of 11 percent, driven notably by stronger white-box sales, Milanesi said.

Smartphones sales outpaced overall market growth in the first quarter, rising 49 percent to 54.3 million units – their strongest year-on-year increase since 2006, Gartner said.

Due to the success of smartphones, which are becoming more affordable, Blackberry-maker RIM was among the top-five mobile handset vendors for the first time with a market share of 3.4 percent compared with 2.7 percent in the same quarter a year ago.

Apple also had its strongest quarter yet, Gartner said, as sales more than doubled, making it the seventh largest handset seller in the world.

Nokia, the world’s largest mobile phone maker, continued to lose market share however, falling from 36.2 percent to 35 percent in the quarter.

“Although Nokia’s mid-tier products sold well, Nokia lacks a high-volume driver in the high-end,” Gartner said.

The Finnish company has been struggling for market share in the profitable high end of the handset market, amid tough competition from Apple’s iPhone, RIM’s Blackberry and devices based on Google Inc’s Android open-source platform.

Android became the fourth most widely used mobile operating system during the quarter as its market share surged to 9.6 percent from 1.6 percent.

In an attempt to cope with changing consumer patterns, Nokia earlier this month shook up its business organization and management. It also plans to announce premium products later this year based on the new MeeGo platform, which it has co-developed with Intel Corp. (INTC).

However, Gartner’s Milanesi said MeeGo-based devices and other high-end products “will not rejuvenate Nokia’s premium portfolio until the end of the third quarter of 2010 at the earliest.” Nokia will continue to feel pressure on its average selling price from vendors such as HTC Corp., RIM and South Korea’s Samsung Electronics Co., she added.

Still “losing 1.2 percent isn’t the end of the world,” Milensi said, adding that a 30 percent to 35 percent market share for the market leader looks more reasonable than 40 percent given the many actors on the market.

Nokia’s closest rival, Samsung, improved its market share slightly to 20.6 percent from 19.1 percent while LG Electronics Inc. and Sony Ericsson and Motorola Inc.  saw their market share drop.

A total of 314.7 million handsets were sold globally in the three months to March 31, up from 269.1 million a year earlier but below the 340 million sold in the fourth quarter 2009 when sales in many markets were boosted by the Christmas season.

Smartphones accounted for 17.3 percent of all mobile handset sales in the first quarter, up from 13.6 percent in the same period last year. “Mobile email, rich messaging and social networking will continue to drive demand for smartphones and enhanced phones that feature full qwerty hardware keyboards,” Gartner said.