Press Release

Android Becomes Smart Phone Market’s Secret Sauce for Success in Q2

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In a sign of the growing momentum behind Google Corp.’s Android, makers of handsets utilizing the operating system represented the majority of the fastest-growing firms among the Top 10 smart phone brands in the second quarter, according to the mobile and wireless research firm iSuppli Corp.

Droid phone specialist HTC Corp. achieved industry-leading growth, with its smart phone shipments rising by a stunning 63.1 percent in the second quarter compared to the first. Meanwhile, on the strength of its Android-based Galaxy line of smart phones, Samsung Electronics posted the second strongest performance, with a 55.6 percent sequential rise. New Android licensee Sony Ericsson came in fourth in terms of growth, with shipments rising by 15.4 percent. Finally, Droid-focused Motorola Inc. ranked fifth, with an increase of 12.5 percent.

Top 10 Smart Phone

“Every brand that has put effort into designing smart phones using Google’s mobile operating system is riding the Android wave,” said Tina Teng, senior analyst for wireless communications at iSuppli. “From the spectacular growth of HTC and Samsung, to the steady advances of Motorola, Android is the secret sauce for smart phone growth for many companies in 2010.”

HTC on Center Stage
HTC’s Android success can be traced to wireless operators that want to showcase the capabilities of their upgraded networks by offering handsets with sophisticated features to subscribers. For example, U.S. wireless carrier Sprint Nextel Corp. is offering HTC’s EVO 4G, a feature-packed Android handset that can capitalize on the high speed of its WiMAX-based 4G network. To keep its momentum going, HTC is expected to offer an Android phone that supports Long Term Evolution (LTE)—the other major standard for 4G.

HTC’s share of global smart phone shipments in the second quarter rose to 8 percent, up from 5.3 percent in the first quarter, allowing the company to solidify its No. 4 position in the market.

Meanwhile, the share of No.5-ranked Samsung rose to 4.6 percent during the same period, up from 3.2 percent in the first quarter. The company’s advance is being driven by its Android-based Galaxy S smart phones, which are enjoying strong acceptance from consumers. In contrast, Samsung’s phones using its own bada platform don’t appear to be garnering as much interest. The company’s ranking in the global smart phone market rose one position from sixth place in the first quarter.

With its entry into the Android smart phone marketplace in 2010, Sony Ericsson’s share of shipments climbed to 2.5 percent, up from 2.3 percent in the first quarter.

Motorola’s Droid Success
While Motorola’s second-quarter growth was relatively modest compared to the high-flying results of HTC and Samsung, there are signs that the company’s decision to put all its eggs in the Android basket are paying off. On the strength of its Droid product line, Motorola now has experienced five consecutive quarters of growth starting in the second quarter of 2009—and has outgrown the overall smart phone market for the last four quarters.

Motorola’s Droid strategy is paying off. In North America, Motorola is benefitting from its advertising campaign with Verizon. Motorola also has been refreshing its smart phone portfolio constantly, keeping consumers interested in its product line.

However, even this success wasn’t enough to keep Motorola from slipping one position to sixth place, down from fifth in the first quarter because of Samsung’s prodigious growth.

Among the fastest-growing smart phone brands, the only one that cannot credit its success in the second quarter to Android was Sharp, which enjoyed the third fastest growth of 48.7 percent. Sharp only recently threw its hat into the Android arena in the fourth quarter; its advance in the second quarter was due to the company gaining market share in Japan.

 Slight Setback for Apple
Amid the advance of Android, Apple Inc. suffered a 4 percent drop in smart phone shipments in the second quarter. However, the decline doesn’t represent a major setback for the benchmark iPhone brand.

Apple’s decline in the second quarter was because of the transition from the iPhone 3G S to the iPhone 4. The iPhone 3G S was reaching the end of its life, causing sales to drop off. Meanwhile, Apple had trouble keeping up with iPhone 4 demand, resulting in the small decline in shipments.

The contraction caused Apple’s share of smart phone shipments to fall to 13.9 percent in the second quarter, down from 15.7 percent in the first quarter. Nonetheless, the company maintained a firm grip on third place in the global smart phone market.

Read More > 4G Handsets Hit Stride with a Robust 2010

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