SAN FRANCISCO—Sony Ericsson Mobile Communications AB fell to sixth from fourth in overall cell phone shipments in the second quarter,though smartphone shipments for the firm increased sharply, according to market research firm iSuppli Corp.
The second quarter marked the first time in at least three years that Sony Ericsson didn’t rank among the top five global cell phone brands, according to iSuppli (El Segundo, Calif.). While the company's shipments rose 4.8 percent in the quarter, close rivals Research in Motion and ZTE surpassed Sony Ericsson because their growth rates were larger, iSuppli said.
Sony Ericsson achieved a 15.4 percent increase in smartphone shipments during the second quarter, making it the fourth fastest growing smart phone brand.
"With its shift in focus from volume to value-add, Sony Ericsson is positioning itself to cash in on the fastest growing and most profitable segment of the global wireless market," said Tina Teng, senior analyst for wireless communications at iSuppli, in a statement. "Given that cell phone penetration has reached 73.4 percent of the earth’s population, shipment growth is slowing markedly. Meanwhile, average pricing for mobile phones has declined to extremely low levels and will continue to decrease in the coming years. In contrast, smart phones and feature phones continue to offer fast growth and strong profit margins."
Global shipments of all kinds of cell phones are set to rise at a compound annual growth rate (CAGR) of 6.9 percent from 2009 to 2014, down from the 13.9 CAGR for the period of 2003 to 2008, iSuppli said. Smartphone shipments will rise by 22.7 percent from 2009 to 2014, according to the firm's forecast.
With its shift to the higher-end phone market, Sony Ericsson is mirroring the strategy of Motorola, which has been withdrawing from the market for mainstream cell phones in order to focus on its highend Droid smart phone line, iSuppli said.
Sony Ericsson in 2010 entered the Android smart phone marketplace, and it has offered phones like the Xperia line that uses the Android operating system.
Smartphones represented 13.6 percent of Sony Ericsson’s total mobile handset shipments in the second quarter of 2010, more than double the 5.8 percent seen during the second quarter of 2009, iSuppli said.