Shipments of Converged Mobile Devices Hit New Record High in Second Quarter of 2006, Says IDC

Business Wire, Sept 12, 2006

FRAMINGHAM, Mass. -- Worldwide converged mobile device shipments continued to climb during the second quarter of 2006, nearly reaching the 20 million unit mark. According to IDC's Worldwide Quarterly Mobile Phone Tracker, total shipments of converged mobile devices reached a record 19.3 million units for the quarter, marking a 1.9% sequential increase and a 42.1% year-over-year increase. IDC defines a converged mobile device as a mobile phone having a high-level operating system, such as BlackBerry, Linux, Palm, Symbian, or Windows Mobile.

"That quarterly shipments are reaching the 20 million unit mark in a single quarter is a significant milestone," said Ramon Llamas, research analyst for IDC's Mobile Markets team. "As recently as two years ago, it would have taken an entire year to ship that kind of volume. Since then, the converged mobile device, or smartphone, has evolved in terms of functionality and appeal. In addition, as functionalities have increased, prices have decreased, making converged mobile devices not just attractive, but affordable."

"Although the year-over-year growth rate appears to be slowing when compared to previous quarters, this is due to a steadily rising volume of shipments and increasingly difficult comparisons," noted Llamas. "However, IDC expects to see continued growth in quarterly shipment volume with shipments reaching nearly 100 million units for the year."

"The growing availability of email solutions that can support a variety of platforms is really driving demand for converged mobile devices," said Ryan Reith, research analyst for IDC's Mobile Phone Tracker. "In particular, IDC has seen a steady increase in demand for enterprise-based devices for mobile workers."

While new applications and email solutions are driving the demand for converged mobile devices within the enterprise, the devices are also becoming popular with consumers. This is because the presence of high-level operating systems on converged mobile devices has opened the door for enhanced multimedia applications geared toward a richer video and imaging experience. This is, perhaps, the reason why device vendors are increasingly characterizing these devices as 'prosumer.'

"Nokia announced a deal with Flickr in April that allows owners of Nokia Nseries devices to access their Flickr account directly from their device, enhancing the imaging experience," said Reith. "This is likely to be one of many announcements aimed at bringing better integration and richer content to users, and to fuel continued strong growth in converged mobile devices."

Vendor Highlights

Nokia. The Finnish giant remained the worldwide leader in the converged mobile device space in the second quarter. Nokia continued to enhance its product portfolio with its new Nseries and Eseries devices, as well as its recently announced 5500 Sport device.

Motorola. Motorola emerged as the number 2 vendor by shipment volume in 2Q06, posting the largest year-over-year shipment increase of any of the leading vendors. The U.S.-based vendor's highly-anticipated MotoQ helped fuel its U.S. growth while the launch of the MING device boosted its Asian presence.

Research In Motion. In the number 3 position for the quarter was Canadian vendor Research In Motion. The company experienced healthy year-over-year growth despite a decline in BlackBerry shipments from the first quarter's volumes.

Panasonic. Japanese vendor Panasonic held the number 4 spot after enduring a decrease in both sequential and year-over-year shipments. Nearly all of its shipments remained within Japan in 2Q06 after its X700 and X800 models were phased out of the Asia/Pacific market earlier in the year.

Sharp. Rounding out the top 5 vendors of converged mobile devices was Japanese vendor Sharp, a relative newcomer to the space having made its debut at the end of 2005. Like Panasonic, Sharp's shipments remained within Japan. During the quarter, the vendor added the SH702 to join its SH902 devices already on the market.

Top Five Worldwide Converged Mobile Device Vendors, Second Quarter
2006
(Units in millions)

                                   2Q06               2Q05
                       2Q06 Unit   Market 2Q05 Unit   Market 2Q06/2Q05
        Vendor          Shipments  Share   Shipments  Share   Change
--------------------------------- ------- ---------- ------- ---------
1. Nokia                     9.0    46.9%       6.7    49.6%     34.2%
2. Motorola                  1.7     8.9%       0.6     4.1%    212.5%
3. Research In Motion        1.3     6.7%       0.9     6.9%     38.0%
4. Panasonic                 1.2     6.4%       1.5    10.9%    -16.5%
5. Sharp                     1.0     5.1%       0.0     0.0%        NA
Others                       5.0    25.9%       3.9    28.5%     29.2%
Total                       19.3   100.0%      13.6   100.0%     42.1%
--------------------------------- ------- ---------- ------- ---------
Source: IDC, Worldwide Quarterly Mobile Phone Tracker, September 2006
Note: Vendor shipments are branded shipments and exclude OEM sales
for all vendors.