China's ZTE cracks handset vendor top 5

Source: EE Times Dylan McGrath

SAN FRANCISCOChina's ZTE Corp. placed fourth in sales globally among handset vendors in the fourth quarter of 2010, marking the first time that a Chinese company cracked the top five in any quarter, according to market research firm International Data Corp. (IDC).

ZTE, which sells primarily lower-cost feature phones in emerging markets, shipped 16.8 million handsets in the fourth quarter, good for 4.2 percent market share, according to IDC (Framingham, Mass.). ZTE has been steadily spreading from China to ship handsets into developing regions such as Africa and South America, and has also recently made inroads in developed markets such as Western Europe, Japan and the U.S., IDC said.

"Change-up among the number four and five vendors could be a regular occurrence this year," said Ramon Llamas, a senior research analyst with IDC's Mobile Devices Technology and Trends team, in a statement. Motorola, Research In Motion and Sony Ericsson, which all ranked among the top five worldwide handset vendors in 2010, are all within striking distance of moving back to the top five, Llamas said.

Overall, the worldwide mobile phone market grew by 17.9 percent year-over-year in the fourth quarter of 2010, paced by the growth of smartphones, IDC said. According to IDC's Worldwide Mobile Phone Tracker, vendors shipped 401.4 million units in the fourth quarter, compared to 340.5 million units in the fourth quarter of 2009. Vendors shipped a total of 1.39 billion units on a cumul! ative wo rldwide basis in 2010, up 18.5 percent from the 1.17 billion units shipped in 2009, according to IDC.

The strong quarterly and annual growth comes after a weak 2009, which saw the market decline by 1.6 percent, according to IDC. A stronger economy and a wider array of increasingly affordable smartphones helped lift the market to its highest annual growth rate since 2006 when it grew 22.6 percent, the firm said.

"The mobile phone market has the wind behind its sails," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker. "Mobile phone users are eager to swap out older devices for ones that handle data as well as voice, which is driving growth and replacement cycles."

Nokia retained its No. 1 ranking among handset vendors in the fourth quarter, despite a unit volume decrease of 2.4 percent, IDC said. Nokia attributed the decrease to an intense competitive environment and component shortages which resulted in lower feature phone shipments.

Nokia did grow smartphone volume by 38 percent compared to the third quarter of 2009, IDC said. The firm launched the C7 and the C6-01 touchscreen smartphones as well as the C3 combination touchscreen and Qwerty device in the fourth quarter, IDC said. Still, Nokia's smartphone average selling prices dropped 16 percent on a year-over-year basis, IDC said.