Strong demand for smartphones, heated competition characterize global handset market in 4Q12, says IDC

The worldwide mobile phone market grew 1.9% on year in the fourth quarter of 2012, as strong holiday smartphone sales raised shipments of these devices to levels nearly equal to those of feature phones, according to IDC. Vendors shipped a total of 482.5 million mobile phones in the fourth quarter compared to 473.4 million units in the fourth quarter of 2011. For the full year, the global market for mobile phones grew 1.2% on shipments of more than 1.7 billion units.

In the worldwide smartphone market, vendors shipped 219.4 million units in the fourth quarter of 2012, which represents 45.5% of all mobile phone shipments, the highest percentage ever. The 36.4% on-year growth was slightly below IDC's forecast of 39.5% for the quarter. On an annual basis, 712.6 million smartphones were shipped globally in 2012, which was 44.1% more than in 2011.

"The high-growth smartphone market, though dominated by Samsung Electronics and Apple, still presents ample opportunities for challengers," said Kevin Restivo, senior research analyst at IDC. "Vendors with unique market advantages, such as lower-cost devices, can rapidly gain market share, especially in emerging markets. A good example is Huawei, which overtook LG as a top 5-vendor in the overall mobile phone market and passed HTC to become a top-5 smartphone vendor."

"The fact that Huawei and ZTE now find themselves among the top-5 smartphone vendors marks a significant shift for the global market," noted Ramon Llamas, research manager with IDC's Mobile Phone team. "Both companies have grown volumes by focusing on the mass market, but in recent quarters they have turned their attention toward higher-end devices. In addition, both companies have pushed the envelope in terms of industrial design with larger displays and smaller form factors, as well as innovative applications and experiences."

Samsung set a new record for the number of smartphones shipped in a single quarter and in a single year. Its broad and deep line-up of Android smartphones, particularly the Galaxy-branded Android family, combined with sustained demand for its mid-range and entry-level models to account for the remarkable shipment volumes. 2013 is shaping up to be a pivotal year for the company as its Tizen smartphone strategy takes shape. Samsung will continue to rely on Android as its primary operating system, however, as the move to Tizen will not likely take place overnight.

Apple's record iPhone shipments in the quarter were driven by successes in Greater China, where shipments more than doubled, as well as the US, where 6.2 million iPhones were activated on Verizon alone. Interestingly, the company's success was due in large part to older models, in particular the iPhone 4, which Apple could not make enough of in the quarter relative to demand. Its sales success with the older model could portend success in higher-growth emerging markets where the company has performed well.

Huawei suddenly finds itself among the top three smartphone vendors in the world, a first for the company. The company had previously been a top-10 vendor. To reach this milestone, Huawei has courted both the mass market with its simple and inexpensive smartphones and the high-end of the market with its Ascend-branded product line. Along the way, the company has demonstrated its innovative skills, having released the world's thinnest (6.68mm) smartphone in 2012, the Ascend P1, and in 2013 it announced the upcoming Ascend Mate, the first smartphone with a 6.1-inch display. At the same time, Huawei has brought its own software innovations, including Magic Touch, Guiding Wizard, Smart Reading, and Floating Windows.

Sony Mobile Communications' strategy for becoming the worldwide leader in mobile entertainment combined with its growing portfolio of high-end smartphones drove its smartphone volumes higher throughout the year. This marks a significant improvement since Sony acquired Ericsson's stake in 2011 in the Sony Ericsson joint venture. Sony introduced its Xperia TL fourth-quarter 2012 and recently announced the addition of the Xperia Z and the Xperia ZL, to be launched in the first quarter of 2013.

ZTE maintained its spot among the top-5 smartphone vendors globally thanks to continued international diversification efforts. The vendor also shipped more smartphones than feature phones for the first time. ZTE has grown its smartphone sales of late thanks primarily to an uptick in lower-cost smartphone sales in many emerging markets. The company has traditionally relied on sales of phones to China, where the company is based. Notable progress has been made in developed markets too.

IDC: Top-5 smartphone vendor shipments and market share, 4Q12 (m units)
Vendor	4Q12 unit shipments	4Q12 market share	4Q11 unit shipments	4Q11 market share	Y/Y change
1. Samsung	63.7	29.0%	36.2	22.5%	76.0%
2. Apple	47.8	21.8%	37.0	23.0%	29.2%
3. Huawei	10.8	4.9%	5.7	3.5%	89.5%
4. Sony	9.8	4.5%	6.3	3.9%	55.6%
5. ZTE	9.5	4.3%	6.4	4.0%	48.4%
Others	77.8	35.5%	69.2	43.1%	12.4%
Total	219.4	100.0%	160.8	100.0%	36.4%

Source: IDC, compiled by Digitimes, January 2013

IDC: Top-5 smartphone vendor shipments and market share, 2012 (m units)
Vendor	2012 unit shipments	2012 market share	2011 unit shipments	2011 market share	Y/Y change
1. Samsung	215.8	30.3%	94.2	19.0%	129.1%
2. Apple	135.9	19.1%	93.1	18.8%	46.9%
3. Nokia	35.1	4.9%	77.3	15.6%	-54.6%
4. HTC	32.6	4.6%	43.6	8.8%	-25.2%
5. Research in Motion	32.5	4.6%	51.1	10.3%	-36.4%
Others	260.7	36.5%	135.3	27.5%	92.7%
Total	712.6	100.0%	494.6	100.0%	44.1%

Source: IDC, compiled by Digitimes, January 2013

IDC: Top-5 mobile phone vendor shipments and market share, 2012 (m units)
Vendor	2012 unit shipments	2012 market share	2011 unit shipments	2011 market share	Y/Y change
1. Samsung	406.0	23.4%	330.9	19.3%	22.7%
2. Nokia	335.6	19.3%	416.9	24.3%	-19.5%
3. Apple	135.9	7.8%	93.1	5.4%	46.0%
4. ZTE	65.0	3.7%	69.5	4.1%	-6.5%
5. LG	55.9	3.2%	88.1	5.1%	-36.5%
Others	737.5	42.6%	716.8	41.8%	2.9%
Total	1735.9	100.0%	1715.3	100.0%	1.2%

Source: IDC, compiled by Digitimes, January 2013