Manufacturers are either getting rid of feature phones or re-inventing them for the emerging markets. Nokia achieved a remarkable turn-around through tactical pricing cuts that bounced its market share back up 24.6% to 28% in 2Q-2011. While it cleared out Nokia’s excess inventory and distribution channels, it also resulted in its average selling price slumping to from $65 to $51. While Nokia is pre-installing apps, such as Angry Birds, to its re-invented feature phones, both Sony-Ericsson and LG are moving their focus away from feature phones. Sony-Ericsson has stated its plans to end feature phone production in 2012 while LG seeks to dominate the LTE smartphone market. Motorola grew both handset and smartphone shipments in Q3 while tablet sales slumped to 100 K. ZTE’s Q3 handset shipments are set to bump LG from 3rd place when officially announced on Monday. Samsung’s legal issues with Apple were not sufficient to slow its shipment growth, and it remains comfortably in second place with 20.8% market share.
Ericsson’s announcement to sell its 50% share in the Sony-Ericsson joint venture for $1.5 billion underscores the hugh paradigm shifts in the mobile device market-place. Sony wishes to integrate smartphones more tightly into its portfolio of tablets, laptops and gaming platforms. “Customers are no longer seeing their handset as a ‘standalone device.' Increasingly, customers are seeking out a seamless communications, media and UI experience”, said Jake Saunders, VP for Forecasting. Apple has iCloud integrating the end-user experiences across iPhones, iPads and Macs. Microsoft is striving to achieve the same objective with its Window Phone 7 devices that allow content to cross over from smartphone, Xbox and Windows PC.
I see RIM loosing its grip on the professional market as they seem to severely lag in smartphone features. This segment is ripe for being overtaken by another manufacturer. While Android phones continue to grow in popularity, the iPhone still has the upper hand as the smartphone to beat. It will be interesting to see how Nokia does with Windows based phones next year. Never a dull moment in the handset market.