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Edition: U.S. Article Comments (1) Save Email Print Reprints Most Popular Most Shared Florida AG proposes tougher illegal immigrant curbs 11 Aug 2010 Scientists find new superbug spreading from India 11 Aug 2010 Few Chernobyl radiation risks from Russia fires 10:23am EDT Attractive women overlooked for certain jobs? 09 Aug 2010 Wall Street drops on jobless data and Cisco outlook 10:51am EDT Analysis: Deflation poses threat to big-ticket retailers 11 Aug 2010 GM posts largest quarterly profit since 2004 10:41am EDT Jobless claims jump shows labor market ailing 11:08am EDT Iran website shows "graves" dug for invading troops 10 Aug 2010 Cancer cells slurp up fructose, US study finds 02 Aug 2010 Scientists find new superbug spreading from India 11 Aug 2010 Cancer cells slurp up fructose, US study finds 02 Aug 2010 Florida AG proposes tougher illegal immigrant curbs 11 Aug 2010 Landslides complicate Pakistan flood relief efforts | Video 09 Aug 2010 Strange and unusual 25 Feb 2010 What do food allergy labels really mean? 11 Aug 2010 India to shut BlackBerry if security not addressed 11:27am EDT Ecuador rocked by 6.9 quake, no major damage 10:43am EDT Attractive women overlooked for certain jobs? 09 Aug 2010 Bank repossessions drive up July foreclosures 10:31am EDT Low prices drive second quarter phone sales up 14 pct: Gartner Digg This Tweet This Share on LinkedIn Share on Facebook Related News Analysis: Taking on iPhone could be too much for LG, Nokia Sun, Aug 8 2010 WRAPUP 5-Saudi, RIM talks progress as Blackberry ban looms Thu, Aug 5 2010 Canada aids RIM as BlackBerry ban nears Thu, Aug 5 2010 WRAPUP 4-Canada aids RIM as BlackBerry ban nears Thu, Aug 5 2010 Analysis: BlackBerry flap not likely to hurt RIM over time Thu, Aug 5 2010 Related Topics Technology » iPad » Media » HELSINKI | Thu Aug 12, 2010 4:30am EDT HELSINKI (Reuters) - Sales of mobile phones rose 13.8 percent to 326 million units in the second quarter but average selling prices fell by more than expected amid intense competition, IT research firm Gartner said on Thursday. Sales of smartphones rose by 50 percent and accounted for 19 percent of shipments as more affordable data plans encouraged more consumers to try them. "Launches of updated operating systems will help maintain strong growth in smartphones in the second half of 2010 and spur innovation," Gartner analyst Carolina Milanesi said. Nokia's Symbian phones had 41.2 percent of the smartphone market, down from 51 percent a year ago as it struggles to revamp its portfolio, followed by Research in Motion's BlackBerrys, with 18.2 percent. RIM lost its position as the leading smartphone platform in the United States to Google's Android, an open platform that runs phones made by a host of manufacturers including Taiwan's HTC and U.S. phone maker Motorola. As competitors eat into RIM's North American market share, the Canadian company has increasingly been pushed to look to markets like India and Saudi Arabia for growth. But security demands made by some foreign governments have landed RIM at the center of international controversy in recent weeks. Android also overtook Apple to become the third most popular smartphone operating system globally. Milanesi predicted Apple's sales would regain some momentum in the second half as its new iPhone 4 goes on sale around the world. She also predicted that Android would overtake RIM on a global level by the end of the year. Android had 17.2 percent of the smartphone market in the second quarter, with Apple's iPhone OS taking 14.2 percent. In the wider phone market, Nokia's market share fell to 34.2 percent from 36.8 percent, while second-placed Samsung slightly increased its market share to 20.1 percent from 19.3 percent. Fellow South Korean phone maker LG Electronics lost market share, slipping to 9 percent from 10.7 percent of the market, despite aggressive price cuts. RIM had 3.4 percent of the total phone market, up from 2.7 percent. Milanesi predicted stronger pressure on prices in the second half of the year. "As you get into Q4, competition will be so strong... things are really going to get intense," she said. Gartner kept its forecasts for 2010 unchanged. It expects the overall phone market to grow by 14 percent this year, and the smartphone market to grow by 46 percent. (Reporting by Georgina Prodhan; Editing by Hans Peters) Technology iPad Media Comments See All Comments (1) | Post Comment Aug 12, 2010 6:12am EDT “Milanesi predicted stronger pressure on prices in the second half of the year. “As you get into Q4, competition will be so strong… things are really going to get intense,” she said.” As usual Carolina Milanesi hits the nail right on the head. Phone makers like Nokia and LG are already feeling the heat especially in the high-end smartphone segment. Their only solution for the present in order to cling on to their market share is drastic price cuts. Already the ASP of Nokia has been falling steadily ever since Apple radically changed the landscape of the mobile phone market three years ago. But, how far can this price-cutting strategy go and for how long? Such a strategy can work in the short term, but it has a disastrous effect on the bottom line as is becoming evident in the case of Nokia’s market CAP and share value. Besides, Nokia’s strong position in the low-end segment of emerging markets is being increasingly challenged by local brands, which have been gaining market share at the expense of market leader Nokia. This trend means that Nokia will have to pedal even harder to maintain its market share in these emerging markets. Eventually, consumers even in these emerging markets will also want to upgrade to something better and fancier than the basic 12-key entry-level mobile phone that Nokia offers them. Mobile phones are no longer just phones. They are a multimedia gadget like a mini-computer in your pocket. The latest Gartner report by Milanesi actually seems to be saying subtly between the lines, that time is running out really fast for Nokia if it still wants to be market leader in the near future. Nokia seems to be resting on its past laurels and success. Mobile phones have now become more of a “fashionable” consumer product rather than just a means of communication. And the present generation of mobile phone users is very fashion conscious. Fashion trends are hard to beat. ulludapattha Report As Abusive See All Comments (1) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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