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IDC: Q2 Handset Sales Rise 14.5%

Framingham, Mass. – Worldwide demand for cellphones rose
markedly in the second quarter, driven by demand for smartphones and low-cost basic
models, research company



Second-quarter worldwide unit shipments rose 14.5 percent to
317.5 million compared with the year-ago period, with first-half unit shipments
up 18.5 percent to 620.6 million.

Most of the growth came from handset suppliers outside the
traditional top five, with the smaller vendors increasing their second-quarter share
to 28.3 percent from a year-ago 25.3 percent. Three of the top five vendors —
Nokia, LG and SonyEricsson — lost unit share in the second quarter compared to
the year-ago period.

Smartphone growth, especially in regions such as Latin
America and Asia/Pacific (excluding Japan), will continue to power market
growth this year, the company said. “Lower smartphone average selling
prices, increased consumer interest, and aggressive expansion plans on the part
of key suppliers will keep the device type growing above market growth rate,”
said IDC senior research analyst

Kevin Restivo


 Companies with a “strict
focus” on smartphones — including RIM, Apple and HTC — “have clearly
benefited from steadily increasing user interest,” said senior research analyst

Ramon Llamas

. Nonetheless, it’s not just smartphone vendors
that have driven the market forward, Llamas said. “It’s also the companies with
a presence among entry-level handsets and mid-range devices, which have long
been the domain of the worldwide leaders.”

However, “to dismiss the worldwide leaders would be a
mistake,” Llamas noted. “Each currently enjoys broad distribution, a
deep portfolio and brand recognition. Moreover, each is in the midst of
refreshing its respective product portfolio, with greater emphasis on
smartphones during the second half of this year.” Still, he continued, “the upward
pressure from vendors outside the current top five vendors, particularly Apple
and Motorola, will provide tough competition in the quarters to come.”

In the U.S., smartphones took center stage in the quarter
with the launch of Apple’s iPhone 4, HTC’s Droid Incredible, HTC’s Evo 4G,
Motorola’s Droid X, and — from two U.S. carriers — Samsung’s flagship Galaxy
S class of Android smartphones, IDC said. More smartphones due in the second
half include Galaxy S models from two other carriers, several handsets from
Dell, and BlackBerry models expected to offer RIM’s next-generation OS,
expected to be unveiled next week. Smartphone growth in Canada was underscored
by such new Android smartphones as Sony Ericsson’s Xperia X10 and Motorola’s
Quench, DEXT and BackFlip.

Nonetheless, in North America, “basic traditional mobile
phones gained popularity with new wireless carrier entrants and discount brands,”
IDC noted.

Top Five Mobile Phone Vendors, Q2 2010
(Worldwide Unit Shipments in Millions)

Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 2010
Note: Vendor shipments are branded shipments and exclude OEM sales.