Report: Mobile Handset Market To Rebound In 2010

A report by research firm Gartner suggests that the mobile market will rebound and show a stronger than expected recovery this year. As worldwide economies begin to boost spending on new gadgets and handset retailers offer cheaper smartphones, Gartner expect the industry to grow up to 13% in 2010.

The report comes after the handset market suffered its first decline in eight years, falling by just 1%. Gartner had originally forecast growth of around 9% in December but revised their figures after the economy showed signs of stabilizing into a recovery trend.

As sales are beginning to increase, the extraordinary amount of competition in the cellphone market will put significant pressure on vendors as they seek to increase their profit margins. Handset vendors are scrambling to release a new generation of smartphones to compete with the releases of the Apple iPhone and Google’s open source operating system; Android.

Three of the top five mobile phone vendors experienced lower than expected sales in 2009. The top five vendors continued to lose market share to Apple and other smartphone manufacturers, their combined market share falling from 79.7% in 2008 to 75.3% in 2009.

Nokia, the world’s largest cellphone manufacturer, performed better than industry expectations in the final quarter of 2009 but still lost 2.2% of it’s market share. Samsung and LG showed strong sales, increasing their market share 3.2% and 1.7% respectively.

The balance in the mobile market looks to have shifted after the introduction of more powerful smartphone devices with 172.4 million units sold in 2009, a 23.8% increase from 2008. Smartphone focused vendors Apple and Research In Motion (RIM) helped manage to capture market share from larger device manufacturers, now holding 14.4% and 19.9% of the worldwide smartphone market.

The most popular smartphone operating system continues to be Nokia owned Symbian. It seems that increased competition from Apple and RIM and a dip in Nokia’s high end device sales, the software vendor noticed Symbian’s share of the market of 5.4% in 2009.

With Nokia announcing a partnership with Intel that will see them create a new mobile operating system called Meego and the first release of an newly open sourced Symbian operating system, Nokia will look to these products to post stronger than average increase in sales in the latter half of 2010.

The two best performers in 2009 were Apple and Android. Apple grew their market share by 6,2% in 2009, taking third position behind Symbian and RIM, displacing Microsoft Windows Mobile in the process. Android called in an impressive 3.5% gain in 2009 with vendors selling 6.8million Android devices, up from just 0.5% the year before.

Carolina Milanesi, Research Director at Gartner adds:

“Looking back at the announcements during Mobile World Congress 2010, we can expect 2010 to retain a strong focus around operating systems, services and applications while hardware takes a back seat. Sales will return to low-double-digit growth, but competition will continue to put a strain on vendors’ margins.”