SAN FRANCISCO With electronics markets decimated and suppliers hemorrhaging money, the relative strength of the smartphone market is helping some companies to keep their heads above water and propelling others to impressive growth.
Take a close look at any IC supplier that is still showing revenue growth and, more often than not, the smartphone market deserves at least part of the credit.
A new study released by market research firm Forward Concepts Inc. projects that smartphone shipments will grow 13 percent in 2009, reaching 164 million units. That growth rate is down from an estimated 19 percent in 2008, but compared to projections for other electronics markets this year it qualifies as scorching.
Apple Inc., maker of the iPhone, seemed to defy gravity last month when it reported a 6 percent increase in sales for the quarter ended Dec. 31. The company posted saw its profit for the quarter grow to $1.61 billion from $1.58 billion in the same period a year earlier.
Apple is set apart from the rest of the electronics world in many ways, and the company attributed its at least partly to record sales of iPod video and music players and a collapse in prices for commodity components such as DRAMs, LCDs and NAND flash. Still, the iPhone continues to enjoy phenomenal success, becoming the top selling handset among adult consumers in the U.S. during the third quarter of 2008.
With 9.6 percent market share, Apple was the No. 3 supplier of smartphones in 2008, trailing Nokia and Research in Motion (RIM), according to Forward Concepts (Tempe, Ariz.).
Nokia last month reported a worse-than-expected drop in fourth-quarter profit and warned market volumes would shrink 10 percent this year as the economic slowdown hits consumer spending. But the company is placing more emphasis on higher-margin smartphones, such as the 5800 XpressMusic device, which the company said moved more than 1 million units within three months of its launch last fall.
In its most recent quarterly report, for the three months ended Nov. 29, 2008, RIM reported revenue of $2.78 billion, up 8 percent sequentially and 66 percent year-to-year. BlackBerry subscriber accounts grew by about 14 percent to 21 million during the quarter, RIM said. The company's current quarter is scheduled to close Feb. 27.
Taiwanese smartphone maker HTC Corp., which brought to market the first phone based on Google Inc.'s Android operating system last year, said Friday that it expects to post a small gain in first quarter revenue but that momentum could pick up by the second quarter on new products, according to a Reuters report.