Mobile phone shipments show signs of improvement in Q3

The mobile phone market globally turned a corner in the third quarter, with shipments by manufacturers increasing by 5.6% over the previous quarter, market research firm IDC reported.

The results for the third quarter were still down by 6% from the same quarter in 2008, but the quarter-to-quarter growth was taken as the first sign of improvement since the onset of the economic downturn, the analyst firm said Thursday.

In all, 287.1 million cell phones and smartphones were shipped in the third quarter, down 6% from the 305.4 million shipped in the third quarter of 2008. Shipments do not necessarily result in sales to end user customers, but indicate that carriers and other retailers are expecting to make sales by ordering from manufacturers.

In the third quarter, various sales channels promoted older devices at lower prices, creating demand that pushed up shipment volumes, said Ramon Llamas, an IDC analyst. Now that we have moved into the fourth quarter, vendors are setting the stage for further gains by launching their flagship devices to meet pent-up demand, he said.

New smartphones, such as the Droid and the Cliq from Motorola which are both based on the Android operating system, are appearing in November in the U.S., for example, IDC noted.

Will Stofega, another IDC analyst, said that the economy is expected to make a slower recovery than many predicted a year ago, but mobile phone manufacturers should still increase their spending on research and development to stay competitive.

IDC assessed market performance in various geographies, noting that North America posted mixed results, with the U.S. showing gains in the quarter, but with Canada declining for the third straight quarter for all mobile phones, even as smartphone shipments increased. Western Europe showed strong signs of recovery, with increases in all devices year-over-year. IDC did not provide specific numbers for various geographies, however.

Latin America and Asia/Pacific performed weaker than other areas. Mexico has experienced an increase in taxes for telecom services, personal taxes and value-added taxes, all of which have a negative impact on mobile phone sales.

Market leader Nokia once again led for all types of mobile phone shipments, with 108.5 million shipped, a decline of 8% over third quarter 2008. The Finnish company took 37.8% share of the market.

Samsung finished second with 21% market share; LG Electronics finished third with 11%; Sony Ericsson was fourth with 4.9%; and Motorola was fifth with 4. All other manufacturers combined to account for 59 million mobile phones shipped, or 20.6% of the market.

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