Not All Handset Makers are Hurting

The numbers are in and it’s a mixed picture on mobile phone makers and the economy.

The economic downturn sweeping global markets walloped most but not all of the mobile device industry during the third quarter of this year, according to research firm IDC.

IDC’s Ryan Reith wrote that handset vendors felt the pressures of the slowing economy during the third quarter and, as a result, shipments and revenues were down almost across the board.

Handset makers shipped 299 million handsets were shipped in the third quarter of 2008, an increase of 3.2 percent from the third quarter of 2007, but down 4 percent over the second quarter of this year.

IDC noted defensive moves some mobile phone makers have taken, such as a drop in the price of an average phone and new marketing campaigns designed to keep consumers buying as the holiday season approaches.

Yet as one IDC researcher noted, Apple and Nokia are still enjoying big sales success given fast adoption of the newest iPhone 3G and the growing dependency on mobile devices providing Internet access.

The news contradicts recent industry reports that the mobile device segment may escape some of the downturn effects. IDC’s mixed report did see similar bright spots.

For example, new products, such as Google’s HTC G1, built on the open Android platform, could be gaining traction

“The worldwide release of the Apple iPhone 3G earlier this summer marked a major step not only for Apple, but also raised the profile of converged mobile devices as a whole,” the IDC report said. The attention generated by the G1 is helping demand for converged mobile devices by both seasoned and first-time smartphone users.

Right now, according to IDC, Apple’s iPhone and Research in Motion’s BlackBerry handsets are main catalysts spurring North America mobile device adoption.

Yet neither vendor has broken into the top five mobile phone vendor rankings, which feature Nokia in the leadership position.

The top mobile handset seller has been busy this year pushing out a new music-focused handset including its 5800 XpressMusic, as well as high-end smartphones. Nokia shipped 117.8 million units in the third quarter and currently holds 39.4 market share.

Second place leader Samsung, which shipped over 50 million units in the third quarter — a milestone company sales achievement — holds 17.3 percent market share. It recently launched a new handset featuring an optical mouse function.

IDC said Samsung’s success in grabbing 8.6 percent share is a mix of aggressive pricing, attention to emerging markets and big marketing programs.

Sony Ericsson, which stepped up into third place from its fifth place slot in the first quarter, holds 8.6 percent market share. The handset maker launched its much anticipated XPeria X1 this year.

Motorola (NYSE: MOT), which dropped from third place in the first quarter of 2008 to fourth place, shipped 25.4 million units in the third quarter.

The beleaguered handset maker is neck-in-neck with Sony Ericsson as it holds 8.5 percent market share. During its third quarter earnings call today company leaders said they are streamlining mobile device hardware and platforms in light of serious market challenges the vendor faces into 2009.

“Motorola’s volumes were still a fraction of what they used to be and the division posted another quarter of operating loss,” said IDC, noting the handset maker introduced a slew of new devices this year, including the Krave, its first US-based touch screen handset. Its market share and shipment decreases combine for a year-over-year drop of 31.7 percent.

LG Electronics, which slipped from fourth into the number five spot in the third quarter, is faltering in emerging markets as it tries to hurdle economic challenges in Europe, according to IDC. With 7.7 percent market share, LG shipped 23 million units in the third quarter.

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