Bloomberg News

Samsung Tops Handsets With 40% Android Share, Gartner Says

May 16, 2012

Samsung (005930) Electronics Co. sold more than 40 percent of all Android mobile phones in the first quarter as the South Korean manufacturer became the world’s largest handset maker, research company Gartner Inc. said.

Global handset sales declined 2 percent to 419 million, dragged down by a drop in low-end handsets, Stamford, Connecticut-based Gartner said today in a report. Smartphone sales rose 45 percent, the researcher said.

Samsung, which also makes screens and other hardware used in smartphones, has profited from its ability to offer devices running Google Inc. (GOOG:US)’s Android software at a wide range of prices. Android is currently installed on 56 percent of new smartphones, more than twice Apple Inc. (AAPL:US)’s share. The prospect of even cheaper Android models led customers in Asia to postpone purchases, the researchers said.

The market for users of feature phones, or low-end handsets that can’t run a full range of applications, to upgrade to similar devices “has declined more significantly than we expected,” Anshul Gupta, a Mumbai-based analyst at Gartner, said in an interview. “Consumers are holding onto their feature-phone devices hoping for better smartphone deals coming up.”

Nokia Oyj (NOK1V), which Samsung overtook as the world’s biggest handset maker, fell as much as 3.2 percent to 2.20 euros and was trading down 2.3 percent at 1:25 p.m. in Helsinki. Samsung extended dropped 6.2 percent, the most in 3 1/2 years, to 1.23 million won at the close in Seoul, before the Gartner report was released.

Smartphones as Commodities

The Gartner study measures sales to end users at operators and retailers. No other vendor besides Samsung has more than a 10 percent share of Android handsets, the researcher said, adding that the smartphone market has become “highly commoditized.”

Microsoft Corp. (MSFT:US) software ran on 1.9 percent of handsets sold in the quarter, compared with 2.6 percent a year earlier. Nokia Chief Executive Officer Stephen Elop has said his company and Microsoft are trying to establish the Redmond, Washington- based software maker’s Windows Phone as a “third ecosystem” versus Android and Apple systems.

Nokia’s total handset market share declined to 19.8 percent. The Espoo, Finland-based manufacturer remained ahead of Apple, which accounted for 7.9 percent of the market. The proportion of smartphones running Symbian, Nokia’s older operating system, fell to 8.6 percent, or about one-third of its share a year earlier. Nokia’s total smartphone share, including Windows Phone and the N9, was 9.2 percent, Gupta said.

European ‘Uncertainty’

“Economic uncertainty has really impacted markets like western Europe, with smartphone upgrades declining,” Gupta said. Nokia now has the third-largest share in the region, behind Samsung and Apple, he said.

The researchers forecast that Windows Phone will be the second-biggest smartphone system after Android by 2015, displacing Apple’s iOS, Gupta said, reiterating earlier predictions.

Gartner lowered its full-year mobile-phone sales forecast to 1.9 billion handsets, for growth of approximately 5.5 percent, including sales of 650 million smartphones, representing a 38 percent jump. The research company earlier forecast growth of 7 percent overall this year, with a 39 percent gain for smartphones.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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