BUSINESS

Research In Motion falls out of IDC's ranking of top five smartphone makers

07/27/2012 04:11 EDT | Updated 09/26/2012 05:12 EDT
NEW YORK, N.Y. - Canada's own BlackBerry maker Research In Motion (TSX:RIM) has fallen out of the top five ranking of smartphone makers based on market share, research group IDC said Friday.

"Research In Motion's BlackBerry unit decline continued last quarter, reaching levels not seen since 2009," it said in the report.

"Like Nokia, RIM is a company in transition. Smartphones running on its new platform, BB 10, will be released later this year. Until then, results like these may be a sign of things to come."

RIM has been working to turn around operations after watching its market share eroded by the growing popularity of Apple's iPhone and smartphones running Google's Android operating system.

The company hopes the debut of its BlackBerry 10 operating system and a new line of BlackBerry smartphones will help keep its subscribers from defecting to other devices, particularly in the United States.

Meanwhile, Samsung has extended its lead over Apple in smartphones, in part because its new Galaxy phones came out before Apple updated its iPhone, the research group said.

Samsung's Galaxy S3 phones got good reviews when it was released late in the second quarter. In the U.S., the phones work with the faster fourth-generation, or 4G, cellular networks that major wireless companies have been building.

The Galaxy's screen is larger than the iPhone's, while the Samsung phone is lighter and thinner.

An iPhone with 4G capabilities isn't expected until this fall. The current model, the iPhone 4S, came out in October, and sales typically drop several months after each release.

According to IDC, Samsung Electronics Co. shipped 50.2 million smartphones worldwide in the second quarter and had a market share of 33 per cent, up from 17 per cent a year ago. Apple Inc.'s fell slightly to 17 per cent, from 19 per cent a year ago. It sold 26 million iPhones in the April-June quarter.

Besides having the Galaxy S3 out months before a new iPhone, Samsung also benefited from its strategy of developing several devices for a range of consumers. By contrast, Apple targets only the high-end market with its iPhone.

IDC's report came out the same day Samsung reported another record-high quarterly profit, thanks to Galaxy sales. Robust sales of smartphones helped offset a slowdown in other consumer electronics businesses such as televisions and personal computers.

IDC said the big question is how well Samsung's phones will sell once the new iPhone comes out.

Analysts believe Samsung will achieve a record-high profit again in the third quarter when Galaxy S3 sales are expected to reach a peak, but sales are likely to drop or slow in the holiday quarter once Apple's new iPhone comes out.

Overall, phone manufacturers shipped 154 million smartphones in the second quarter, a 42 per cent increase from 108 million a year earlier. That was slightly below IDC's forecast of 43 per cent and was the slowest growth since the fourth quarter of 2009. At that rate, IDC said it would be tougher for Samsung and Apple to expand their market shares further. IDC said economic turmoil in Europe could put growth prospects at risk.

Including basic cellphones, vendors shipped 406 million units, up from 402 million a year earlier.

Samsung and Apple combined claimed nearly half of the smartphone market.

Nokia Corp. was No. 3 with a 6.6 per cent market share, down from more than 15 per cent a year ago. Nokia has had some success with its Lumia line, based on Microsoft's Windows system. The company is hoping for a boost once Microsoft releases a major upgrade to Windows in October, one designed with touch screens in mind.

HTC Corp. was fourth with 5.7 per cent of the market, down from nearly 11 per cent.

Chinese phone maker ZTE Corp. claimed the No. 5 spot for the first time, with a 5.2 per cent market share, up from 1.8 per cent a year earlier. Its lower-cost, entry-level smartphones have been popular in China and Latin America.