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Western European mobile phone market in on move again

The Western European mobile phone market rose for the first time in the last 15 months.

During the third quarter of 2009 (3Q09) the Western European market grew 5% year-on-year, according to IDC's European Mobile Phone Tracker. Handset shipments totaled 46.8 million units, representing sequential growth of 11%, which shows that consumer demand is picking up and operators are not so reluctant to stock up for the Christmas season.

"The mobile phone market is showing strong signs of improvement since the onset of the economic crisis," says Francisco Jeronimo, European mobile devices research manager with IDC.

"The quarter's growth was supported by the traditional mobile phones (TMP), the biggest segment of the market, but affected by the trend towards smartphones. Samsung and LG have been particularly strong in the TMP segment, with their portfolios boosting sales of feature phones. On the other hand, converged mobile devices (commonly known as smartphones) saw negative growth due to the lack of materials and supply chain problems experienced by some of the major vendors, which were not able to supply the high demand from operators."

Traditional mobile phones increased 6% year-on-year and 14% sequentially, driven particularly by touchscreen and messaging devices from LG and Samsung. Converged mobile devices (CMDs) experienced a slight decline of 2% year-on-year, but grew 2% from the second quarter of 2009, supported by RIM's 87% YoY growth and Apple's shipments, while all the other vendors declined over the quarter in the smartphones segment.

Overall, Nokia continues to be the market leader, with 35.3% market share in 3Q09, followed by Samsung with 30.5%. The gap between these two has been narrowing, and Nokia is facing a significant threat of being overtaken by Samsung in Western Europe in 2010. The Korean manufacturer is already the leader in the traditional mobile phone segment, and is developing a wider portfolio of smartphones, with several devices running Windows Mobile, Android, and LiMo, which will allow Samsung to significantly increase its smartphone shipments in 2010. During the quarter, LG overtook Sony Ericsson's position, becoming the third biggest player in Western Europe for the first time.

Android OS continued to grow its market share from 4.2% in 2Q09 to 5.4% in 3Q09. Several operators listed Android devices in 3Q09 for the first time, which helped Android shipments to grow, though consumers steer clear of Google's OS and sell-out is below everyone's expectations.

Consumers recognize the Google brand, but still do not understand what Android is. The lack of devices available didn't help to raise awareness, though this is expected to change, with more handsets from LG, Samsung, Sony Ericsson, Motorola, and other vendors hitting the market soon.

BlackBerry OS continued to perform well, growing 87% YoY and increasing market share among smartphones from 13% to 16% during the quarter, with BlackBerry Curve 8520 shipping well on the consumer channel.

Windows Mobile continued to lose market share, mainly due to Microsoft's strategy of launching all new devices running the new WM6.5 in October and not throughout the summer sales season, which negatively impacted market performance. The new OS is getting good track from operators, and WM market share is expected to improve in 4Q09.

Symbian was hit hard by growth in Mac OS, BlackBerry OS, and Android, and its market share declined from 59% in 2Q09 to 48% in 3Q09. It remains the biggest OS among smartphones, however.

Apple's strategy of opening to other operators in Europe helped increase market share from 16% in 2Q09 to 24% in 3Q09.

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