Gartner and IDC have reported numbers that are as different as night and day in their latest quarterly reports on the mobile industry. The Gartner report is the main one to watch out for!!! It sets out to predict and report on the overall growth of mobile industry, citing only marginal growth for top vendors. The figures on the same topic in the IDC report are missing a huge 77 million phone units compared to those reports as being sold in the Gartner report. Is this 77 million from the roaring shanzhai trade?
Gartner claimed the third quarter sales of mobile phones in 2010 have jumped by 35% to 417 million units compared to same time frame last year. The smartphone sales, which account for 19.3% of total mobile phone sales, are up by a whopping 96%. “This is the third consecutive double-digit increase in sales year-on-year, indicating that consumer demand is healthy…”
According to International Data Corporation (IDC), the mobile phone makers worldwide sold 340.5 million units in the third quarter of 2010 up by a double digit 14.6%. Although they couldn’t agree on overall sales, both Gartner and IDC insisted that smartphone usage worldwide is taking the market by storm, with numbers up by 50% compared to the third quarter of 2009. IDC pointed out that the “… smartphone is becoming the focal point of the personal communications experience … As a result, new market growth will be increasingly generated by smartphones. This year, we are expecting the smartphone sub-market to grow 55% year over year."
So, why the discrepancy? Well, Gartner calculates handset sales to users and IDC measures vendor shipments, but even so, there is an extraordinary 77 million handsets sold missing from the IDC report.
The Gartner report showed that the leading vendors like Nokia, Samsung, LG, RIM, Sony Ericsson and Motorola have all slipped in market share compared to last year. Nokia added a few thousand units, Samsung a chipper 10,000 units, and 3000 for RIM … slim gains of market share. LG, Motorola and Sony Ericsson have lost a few thousand and slipped extensively in this quarterly result. But it has been a rather impressive show for HTC, Apple and less significant vendors like Huawei and ZTE. Apple almost doubled up its sales and HTC nearly tripled, but both have climbed up only a little compared to their previous year’s quarterly results. The IDC report sang the same tune, with not much difference for the top five vendors: 242 million according to Gartner, weighed against 236.7 million cited by IDC.
But here’s where it gets interesting… Gartner has described a meteoritic rise of the ‘Others’ category in its report. The section has grown from 49.8 million to 137.8 million units in a year, an enviable gain of 88 million at a towering growth rate of 176%, way above HTC and Apple. It also includes the missing 77 million phone units of the IDC report.
These vendors have almost doubled their share in a year from 16% to an outrageous 33% and it’s debatable, as explained by Horace Dediu from Asymco: “Doubling share in a year is possible if you're at 1% share… But to double from a base of 16% is sounding improbable.”
According to Gartner, this category belongs to unknown phone vendors in the emerging regions of China and India who are currently selling ‘white-box’ products. Does this ring a bell? They are actually talking about our very own shanzhai makers. Carolina Milanesi, research vice-president at Gartner describes the white box makers or shanzhai: “In the third quarter, white-box manufacturers continued to expand their reach outside of China into markets such as India, Russia, Africa and Latin America… We firmly believe this phenomenon will not be short-lived as we still see a continued need for non-3G devices.”
Gartner PR representative pointed out that "Effectively, many companies can now assemble large numbers of handsets cheaply using readily-available components -- in much the same way that white box PC manufacturers were able to do so in the past. These companies are increasingly exporting to countries with high demand for basic handsets."
It’s hard to refute Gartner’s claims when you consider the stats supporting the momentous rise of mobile users, mobile vendors and telcos in Asian and African countries. China has always been a faithful market for the so called white box products, but slowly the shanzhai trend has been gaining momentum in other Asian and African countries as well.
These magic stats are attributed not only to manufacturers, but also to worldwide shanzhai vendors who get their white box products assembled from makers in China and sell them under their own brand in emerging economies. The principal research analyst, Anshul Gupta added: "Established global device manufacturers are losing ground due to fierce competition from local and Chinese manufacturers in the low-cost segment…"
The case of the Indian mobile handset market, a market that we often delve into here on Shanzai.com, is growing at a rate of 18.5% and expected to reach 138.6 million in 2010; some compelling stats behind the growth of the shanzhai in India. “The Indian cellular market is very dynamic. New carriers and many new local mobile device manufacturers have entered this already crowded mobile device market. This intense competition has led to very low call rates and low-cost devices from multiple manufacturers in the market. This market was previously dominated by just a few vendors such as Nokia, Motorola, Reliance and Vodafone." -Gartner.
Both the Gartner and IDC reports showed the same growth graph for the smartphone segment reaching the mark of 81 million handsets sold. These stats will bring a big grin to the Apple and Android fanboys since the smartphones powered by Google's Android operating system and Apple iOS are behind this extraordinary growth. Carolina Milanesi, research vice president at Gartner hinted said that “This quarter saw Apple and Android drive record smartphone sales. Apple's share of the smartphone market surpassed Research In Motion (RIM) in North America to put it second behind Android while Android volumes also grew rapidly making it the No. 2 operating system worldwide.”
The rise of shanzhai mobile vendors has turned into a wakeup call for established brands in the countries that the shanzhai are gaining ground in. The rise of shanzhai manufacturers has helped the ‘Others’ section in these industry leading reports double their share in the third quarter of 2010. Milanesi from Gartner says that “This is having a profound effect on the top five mobile handset manufacturers’ combined share that dropped from 83 percent in the third quarter of 2009 to 66.9 percent in the third quarter of 2010…” There is an opportunity there now for the shanzhai, that after exploring the dumb phone section, these vendors will use Android to increase their sales figures for smartphones as well. It seems like this has already started... We’ve been seeing a lot of Android smartphones on Shanzai.com lately.
Disclaimer: *Shanzai.com is a news and reviews website, we do not promote specifically the purchase or sale of the products and services mentioned in our content.
Contact Us 
