For the first time ever, smart phones such as Apple Inc.’s iPhone are outselling personal computers, according to a report by research group IDC
That’s good news for two companies establishing presences in the Triangle: Research in Motion and HTC, two of the top five smart phone vendors in the IDC report.
Plus, Lenovo, the world’s No. 4 PC maker that operates its headquarters in Morrisville, is developing and selling its own smart phones in China while ramping up efforts to develop and sell mobile Internet devices.
Worldwide, consumer electronics makers shipped 100.9 million smart phones in the last three months of 2010, an 87 percent jump from a year earlier. PC shipments were weaker than expected, edging up just 3 percent to 92.1 million.
The two trends aren’t necessarily related, said IDC analyst Ramon Llamas. Smart phones and PCs serve different purposes, and consumers generally need both. PCs remain important for writing papers, editing photos and creating other kinds of content.
PC sales are, however, have been hurt by competition from tablet computers — namely Apple’s iPad.
Meanwhile, smart phones are getting a boost from falling prices. It’s not uncommon to find brand-new models on sale for $100, a price Llamas says consumers are willing to pay. Some retailers, such as Amazon.com Inc., are willing to offer smart phones at steep discounts, sometimes for as little as a penny.
Smart phone sales are also getting a push from growing interest in Google Inc.’s Android software, which powers dozens of phones made by HTC Corp., Samsung Electronics Co. Ltd., Motorola Mobility Holdings Inc. and others.
“Android continues to gain by leaps and bounds, helping to drive the smart phone market,” Llamas said.
“It has become the cornerstone of multiple vendors’ smart phone strategies, and has quickly become a challenger to market leader Symbian. Although Symbian has the backing of market leader Nokia, Android has multiple vendors, including HTC, LG Electronics, Motorola, Samsung and a growing list of companies deploying Android on their devices,” he added.
Updated operating systems Symbian 3 and Windows Phone 7 added to the competitive mix, Llamas explained.
“In their first quarter of commercial availability, both Symbian^3 and Windows Phone 7 ramped up quickly, just in time for the holidays,” he said. “By the end of the quarter, Nokia had shipped five million Symbian^3 units while Windows Phone 7 vendors shipped more than 1.5 million units.
People also tend to replace their phones much more often than they do their computers. Consumers might wait three to five years to replace computers, some of which are protected under warranties that last several years. Meanwhile, cell phone subscribers often have the option of upgrading to a newer phone well before their two-year service contracts are up.
Such incentives are becoming less common, however. Last month, Verizon Wireless said it will phase out its early upgrade program, while Sprint Nextel Corp. said last week that it is making it more expensive for customers to upgrade ahead of schedule.
The top smart phone makers from IDC’s report:
- Nokia noted the positive progress of its new Symbian^3 smart phones during 4Q10: five million units combined from the N8, C7, and C601 worldwide, a strong showing given their recent introduction to the market. At the same time, Nokia’s volumes are largely comprised of older devices, while MeeGo-powered devices have yet to arrive on the market. In addition, Nokia continues to struggle in the North America market. The recent cancellation of the X7 smart phone at AT&T highlights Nokia’s challenges and a new device has yet to be revealed.
- Apple’s iPhone gained more ground in the worldwide smart phone market, with shipment volume growth coming from Asia/Pacific and Japan. In addition, Apple made further inroads into the enterprise market, with more companies adding Apple to their approved smart phone list and increased development of corporate-centered applications. Rumors of an iPhone 5 have begun to heat up the blogosphere, with many expecting a new design and perhaps a mobile wallet.
- Research In Motion reached a new shipment volume for a single quarter in 4Q10, and posted nearly identical year-over-year growth for both the quarter and the year. Driving growth was stronger interest from outside North America, with several markets posting double-digit gains. Meanwhile, RIM continued to enjoy market leadership in North America, but nonetheless saw mounting challenges from the competition. Popular devices for the quarter included the BlackBerry Torch and the BlackBerry Curve 3G.
- Samsung took top honors for having the largest year-over-year improvement for both the quarter and for the year, an accomplishment largely fueled by its popular Galaxy S series smart phones. New Galaxy devices are expected to launch, including the Galaxy Fit, Ace, and Mini. Not to be overlooked are Samsung’s bada-branded smart phones, as well as its emerging Windows Phone smart phones, both of which received a warm reception. Samsung has set its sights on growing market share at least 40% in 2011.
- HTC reaped triple-digit growth for both the quarter and for the year, second only to Samsung. Driving its success were its increased brand awareness, market positioning, and a series of devices that have resonated well with users and carriers alike. Following its success in 2010, the company known for being ‘quietly brilliant’ aims to become a preferred brand for smart phone users in 2011, while leveraging its scalability to drive business in Asia/Pacific and other emerging markets.
Read more about the IDC report here.)
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