Smartphone Shipments Up 53%, Apple iPhone Sales Rebound

Smartphone shipments globally surged 53% in the second quarter, with Apple seeing a rebound from single-digit growth in the first quarter. Manufacturers overall shipped 237.9 million smartphones in the quarter compared to 156.2 million a year ago, according to the latest data from research firm IDC.

That growth helped the overall mobile phone market rise 6%, with total shipments reaching 432 million, up from nearly 429 million a year ago. “The smartphone market is still a rising tide that’s lifting many ships,” noted Kevin Restivo, a senior research analyst tracking the mobile phone market at IDC.

Samsung and Apple dominated the market, but vendors at the lower end of the market like LG and Lenovo saw triple-digit gains in the quarter, partly as a result of starting from a smaller base of shipments. With the launch of the Galaxy S4, Samsung saw shipments increase 43.9% to help the South Korean manufacturer claim nearly a third (30.4%) of the smartphone market.

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Stronger-than-expected iPhone sales led to a 20% gain in shipments for Apple, up from just 6.6% in the first quarter. Still, that was the second-lowest year-over-year increase for the company in four years as consumers held off purchases in anticipation of the next-generation iPhone coming out this fall.

Apple is also rumored to be launching a budget version of its signature device aimed at overseas markets priced at $300 to $500 before subsidies. That effort, combined with its expansion into prepaid offerings, should help Apple accelerate growth in the coming quarters, according to IDC.

Those moves are also intended to fend off growing competition from lower-end vendors. LG and Lenovo, for example, saw shipments jump 108.6% and 130.6% in the second quarter, while those of ZTE rose 57.8%. Each of those companies had just 5.1% or less of smartphone shipments in the quarter, but collectively they had 14% -- eclipsing Apple's 13.1% share.

“Lower-priced smartphones continue to gain traction, but the key for vendors will be to keep prices low while still offering premium devices and services,” stated Ramon Llamas, research manager for IDC’s mobile phone team.

The firm recently estimated that the average selling price of a smartphone has dropped to $375 from $450 since the beginning of 2012, putting more pressure on Apple and Samsung at the high end. During Apple’s second-quarter conference call, CEO Tim Cook noted the lower-priced iPhone 4 has proven popular with first-time iPhone buyers. But he rejected the view that the higher end of the smartphone market had peaked.

Llamas likewise remarked: “Market opportunities exist all levels, including the high end.” But it’s clear Apple is now more focused on appealing to both ends of the smartphone market as it faces a wider array of rivals worldwide.

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