Samsung Electronics Co. Ltd. eked out a slim lead in market share over Motorola Inc. in the United States last year, in part due to the latter’s fading fortunes, according to new numbers from IDC.
Where Samsung showed 15.5% year-on-year growth between 2007 and 2008, Motorola showed a 38% drop. LG Electronics Co. grew 30.4% in the same period. Motorola’s reversal of fortune was stark: In 2007, the American vendor claimed fully one-third of its home market, which has dwindled to well less than one-quarter.
The growth in smartphone shipments in the U.S. was a remarkable 68%.
Little more than 1% market share separated Samsung (22% U.S. share) from Motorola (21.6%) and LG (20.7%) for 2008. Samsung was the U.S.’s top vendor in both the third and fourth quarters of 2008. Together, the top three vendors claimed more than 64% of the market. The “other” category – the share battled over by vendors outside the top 10 – shrank to 4.6% from 6% the prior year, a negative growth rate of nearly 27%.
“This year you’ll see Samsung and LG neck-and-neck in the U.S.,” said analyst Ryan Reith at IDC. “It wouldn’t surprise me to see LG grab the top spot in any given quarter.”
“These two vendors understand CDMA and still play on the GSM side,” Reith added.
RIM leads the smartphone list
The analyst said that Samsung and LG “understand CDMA” – in a technical sense and in terms of relations with Verizon Wireless. For instance, Verizon Wireless’ market heft is going to help LG, which has a solid portfolio at newly acquired Alltel.
Research In Motion Ltd., the fourth-place vendor, claimed 9% share and Nokia Corp. earned fifth-place with 8.5% share. Apple Inc. took sixth place with 4%.
Nokia showed a nearly 20% drop in U.S. share from 2007 to 2008, which Reith said may have been due to the Finnish vendor’s now-resolved cross-licensing spat with Qualcomm Inc., which may have inhibited shipments of CDMA phones. The U.S. market is roughly 60% CDMA and 40% GSM technologies.
The top 10 vendor list was rounded out by Sony Ericsson Mobile Communications, Kyocera, Sanyo and Palm, according to the IDC data.
U.S. getting smart
In a reflection of the rising popularity of smartphones among Americans – who now buy smartphones in greater quantities than their Western European counterparts – RIM showed 88.5% year-on-year growth between 2007 and 2008, and Apple grew 101%. Smartphone shipments in the U.S. shot up 68% in 2008 over the prior year, while smartphone growth in Western Europe reached 37% in the same period.
Samsung and Motorola, however, held down the bottom of the top-five smartphone vendor list, led by RIM (46% U.S. smartphone share), Apple (21%) and Palm (9%). Samsung had 6% and Motorola 5%. The “other” category – vendors outside the top five – stood at 12% last year. Reith predicted that new Android-based smartphone launches would eat up a substantial portion of that “other” share.
“That 68% is certainly not sustainable,” Reith said.
The analyst attributed last year’s remarkable growth in smartphone shipments to the carriers’ offerings of all-you-can-eat data plans and heavily subsidized and marketed smartphones. IDC has forecasted a mere 4% to 5% growth rate for smartphones this year and may revise that figure upward in coming weeks as it gains better visibility into channel inventory burn and consumer demand.
“You’re seeing changing dynamics around a market in recession,” Reith said. “Carriers are now making more money from data attachment rates than from new subscribers. It’s a mature market.”
