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iSuppli: Apple Posts Top Smartphone Growth

El Segundo, Calif. – Apple had
double-digit growth in iPhone shipments during the first quarter and posted the
best performance among the top five competitors, according to IHS iSuppli.

The report said Apple is “bucking
a rare downturn in the burgeoning smart phone business.”

No. 2-ranked Apple in the first
quarter of 2011 shipped 18.6 million iPhones, up 14.9 percent from 16.2 million
in the fourth quarter of 2010, as shown in the table below.

Apple’s increase represented the
highest percentage growth among the

world’s Top 5 smart phone brands

, with number
5-ranked HTC coming in a distant second given its 6.2 percent growth. It also
marked a standout performance in a smartphone market that suffered a 1.5
percent sequential decline in shipments during the first quarter.

“Apple’s smartphone market share
in the first quarter was boosted by the introduction of its first iPhone model
with code division multiple access (CDMA) as well as by the addition of Verizon
Wireless as a carrier in the United States,” said Tina Teng, senior analyst,
wireless communications, for IHS. “Not only did this allow Apple to expand its
target market and boost shipments, it also placed additional pressure on rival
smartphone brands -including Motorola, Samsung, LG and HTC – that focus on
Verizon Wireless as a major customer.”

With its concentration on the
U.S. market, Motorola was the one most impacted by Verizon’s addition of the
iPhone, a factor contributing to Motorola’s 16.3 percent decline in shipments
in the first quarter.

With shipments from Nokia, the
No. 1 smartphone brand, declining by 14.5 percent during the first quarter,
Apple made major strides toward achieving market leadership. Apple in the first
quarter trailed Nokia by just 5.7 percentage points, compared to 12.2 points in
the fourth quarter of 2010.

Nokia’s smartphone shipments
declined to 24.2 million units in the first quarter, down from 28.3 million in
the fourth quarter.

Nokia’s agreement with Microsoft
Corp. to make Windows Phone 7 its principal operating system over the long term
is having a negative near-term impact on its smartphone shipments. With the
announcement of the deal, Nokia eliminated the incentive for consumers to buy
its existing smartphone products, which are based on its Symbian and MeeGo
operating systems. Meanwhile, the Microsoft deal is unlikely to yield any
products for nearly one year.

The decline in smartphone shipments
in the first quarter represents the first sequential decrease since the
beginning of 2009. While many electronic products typically suffer a sales
slump during the beginning of the year following the peak selling sales season
in the fourth quarter, the fast-growing smart phone has been immune to this
phenomenon during most years.

However, IHS iSuppli does not
believe the first-quarter results represent a long-term trend for the
smartphone market.

“The reduction of shipments
reflects inventory control efforts in the smartphone market, rather than
weakening consumer demand,” Teng said. “This decline does not change the IHS
iSuppli forecast of 60 percent growth in worldwide smartphone shipments for the
entire year of 2011.”

No. 3 smartphone brand Research
in Motion (RIM) in the first quarter outperformed the overall market, with its
shipments rising by 4.2 percent. The company benefited from success by
expanding sales in regions outside North America. It also capitalized on the
trend toward cellphone-based monetary transactions with the announcement of
several smartphone models that integrate near-field communications (NFC)
technology. Furthermore, RIM continues to appeal to business customers who
value the company’s focus on its service package and security as the key
selling points.

Despite RIM’s above-average
performance, the company lost ground on the No. 2 smartphone ranking to Apple.
RIM in the first quarter trailed Apple by 4 percentage points, up from 2.1
points in the fourth quarter of 2010.