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SonyEric, Motorola's destruction laid bare

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Mobile phone market estimates show progress by the two Korean giants and Apple - but make grim reading for everyone else in the hardware business.

Strategy Analytics says handset shipments fell 4 per cent in the last quarter from a year ago to 290.5m - but forecasts a rise of 3 per cent in Q4 over 2008 - "signalling an end to the recession".

That might be a tad optimistic. But who will be the beneficiaries?

If Q3 was anything to go by, then it should be Samsung, LG and Apple. The two Korean firms are the beneficiaries of the collapse of Motorola and Sony Ericsson. Samsung took 20.7 per cent of the market and LG 10.9 per cent in Q3, to take second and third spots respectively.

Sony Ericsson and Motorola claimed 4.9 and 4.7 per cent, while in 2007 they took 7.2 and 14.2 per cent of the market respectively. Moto had a 22 per cent market share back when the Razr was still flying off the shelves, and in earlier years, Sony Ericsson could enjoy around 15 per cent.

No.1 vendor Nokia underperformed the market for the fifth quarter in a row, with its 36 per cent share the lowest in 11 quarters.

The analyst notes more trouble ahead for older manufacturers in the premium end of the market - where all the money is made.

In a note, Strategy Analytics' Neil Mawston observes that with "[the] decision to keep the earlier [iPhone] 3G model on the market at a lower retail price, Apple’s competitors in the smartphone market are now faced with competitive pressures on both the user-experience and the pricing fronts."

A little innovation can go a long way, and the mobile handset business had lacked new ideas for a long time. ®

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