Handset upgrades keep consumers buying

The global mobile phone market grew 17.9 percent in the fourth quarter of 2010 as consumers ditched their old phones and opted for one of the many new affordable smartphones appearing in the market.

"Mobile phone users are eager to swap out older devices for ones that handle data as well as voice, which is driving growth and replacement cycles," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker.

Device shipments rose to 401.4 million units in 2010's fourth quarter, up from 2009's fourth quarter figures of around 340.5 million shipments.

In the western world there is a strong consumer movement towards smartphones, but in emerging markets low-cost feature phone makers such as China's ZTE are seeing their piece of the pie expand.

ZTE leapfrogged over handset makers such as Motorola, Sony Ericsson and Research in Motion (RIM) to claim the number 4 position worldwide for the first time during the quarter - but analysts with IDC are not sure how long the company will retain its current position.

"Change-up among the number four and five vendors could be a regular occurrence this year," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team in a report released January 27.

"Motorola, Research In Motion, and Sony Ericsson, all vendors with a tight focus on the fast-growing smartphone market who had ranked among the top five worldwide vendors during 2010 are well within striking distance to move back into the top five list."

Consumers in the market for a new mobile phone will continue to be seduced by the extra features found on smartphones in the years to come says IDC. This trend will boost smartphone submarket shipments by 43.7 percent year over year in 2011.  

In the Asia-Pacific region low-cost feature phones and high-end smartphones flew off the shelves. Smartphones were exceedingly popular in Korea, accounting for two-thirds of phones shipped during the fourth quarter of 2010.

The iPhone 4 HTC Desire, Nokia N8, Samsung Galaxy S and BlackBerry 8520 were Western Europe's top-selling handsets.

Apple and RIM lead the mobile phone market in the United States while smartphones from Nokia RIM, Samsung and Huawei helped boost the current social networking and messaging trends in Latin America.

Top Five Mobile Phone Vendors and their global market share in 4Q10

1. Nokia - 30.8%
2. Samsung - 20.1%
3. LG Electronics - 7.6%
4. ZTE - 4.2%
5. Apple - 4.0%
Others - 33.2%