ABI Research Confirms Smartphone Market Is Hot

A new report from ABI Research shows what many of us have suspected for some time: the smartphone market is HOT, HOT, HOT. According to ABI's Smartphone Market Data report, smartphones made up 19% of all handsets shipped in the second quarter. Compared to the same quarter a year earlier, this represents an increase of 50%. Because many carriers are now offering relatively inexpensive (and highly subsidized) handsets, the initial cost of the smartphone is no longer the main barrier. Instead, the cost of the monthly data plan seems to be the main factor that is deterring users from making the switch.

If you're curious as to which smartphone manufacturers are enjoying the success the most, it's RIM, Apple and HTC. RIM moved 11.2 million smartphones and Apple shipped about 8.4 million iPhones in Q2. HTC shipped 5.3 million units.

19% of All Mobile Phones Shipped in 2Q Were Smartphones, According to ABI Research

NEW YORK--(BUSINESS WIRE)--Smartphone markets continue to forge ahead at an extraordinary pace. According to ABI Research, smartphones made up 19% of all handsets shipped in the second quarter; that represents a 12% increase over the first quarter, and a 50% jump compared to the same quarter in 2009.

Senior analyst Michael Morgan says that these remarkable growth rates are being driven by falling (often heavily subsidized) handset prices. Cost is no longer much of an obstacle: “One of the key remaining barriers to smartphone adoption in subsidized markets is now the cost of the data plan rather than the cost of the handset.”

“How long can this go on?”

10% would normally be considered very good QoQ growth, Morgan notes, but in the smartphone segment that would now be considered lackluster. The battle for supremacy is now escalating at a feverish pitch. “The market is exploding,” he says, “but there are so many players and so many operating systems that the question becomes, ‘Can this market structure be sustained?’ Most observers say no: it needs to boil down to three or perhaps four key operating systems.”

In addition, the huge numbers of smartphones now connected in the US – especially iOS and Android models – are creating network capacity concerns that are “sucking the value out” of the mobile ecosystem.

Which vendors are faring best?

Apple shipped about 8.4 million iPhones in Q2, of which about 3 million were iPhone 4 models that only launched a couple of weeks before the end of the quarter. Q3 results were even more impressive, posting a 68% quarter-over-quarter growth.

HTC also did very well, with shipments growing from 3.3 million to 5.3 million units the by the start of the third quarter, and its improvement continued through Q3.

RIM recently launched its latest OS but, says Morgan, “RIM hasn’t seen the full benefit of its OS launch yet,” with QoQ growth moving only from 10.5 to 11.2 million shipments.