3rd UPDATE: Nokia Market Share Slides

Nokia Corp.'s (NOK) share of the global handset market plunged last year even as global handset sales soared, led by smartphones based on Google Inc.'s (GOOG) Android platform, according to research firm Gartner.

Worldwide handset sales to end users rose 32% in 2010 to 1.6 billion units, Gartner said. Smartphone sales rose 72% from a year earlier to 297 million units as sales of Android-based devices increased almost ten-fold to 67 million units.

But Nokia's share of the total handset market fell to 27.1% in the fourth quarter from 36.6% a year earlier and for the full year 2010 its market share declined to 28.9% from 36.4% in 2009, Gartner said. The figures come after research firm Canalys last week said Android had toppled Nokia Corp.'s (NOK) Symbian as the world's most widespread smartphone platform in the fourth quarter of 2010.

Still, according to Gartner's estimates, Symbian remained slightly ahead of Android in the fourth quarter as the combined Symbian sales of Nokia and smaller handset vendors like Japan's Fujitsu Ltd. (6702.TO) and Sharp Corp. (6753.TO) kept unit volumes ahead.

Android's rapid growth has put further pressure on Nokia, whose Symbian platform has long been the market leader, and it underscores the challenges the Finnish company faces as it tries to regain its market dominance. Indeed, at a coming strategy update Friday in London, Nokia's Chief Executive Stephen Elop is widely expected to shake up the company's software strategy, perhaps adopting Android or Microsoft Corp.'s (MSFT) Windows Phone 7 for at least some its devices.

Even though Windows Phone 7 has a tiny market share compared with Android, it may still be a better choice for Nokia because the company would risk losing its identity and "commoditizing" its business if it joined Android, Gartner research vice president Carolina Milanesi told Dow Jones Newswires.

In the fourth quarter 2010, shipments of premium handsets such as HTC Corp's (2498.TW) Desire, Samsung Electronics Co Ltd.'s (005930.SE) Galaxy S and Motorola Mobility Holdings Inc.'s (MMI) Droid X continued to drive Android sales, Gartner said.

Symbian's market share continued to decline in the fourth quarter, to 32.6% compared with 37.6% for the full year 2010, the research firm said.

Android, which had a fourth-quarter market share of 30.8%, will probably overtake Symbian as the world's largest smartphone platform in the second or third quarter this year, said Milanesi.

Meanwhile, the wider availability of the iPhone 4 helped Apple Inc. (AAPL) achieve a 16% share of the smartphone market in the fourth quarter, Gartner said.

Shortages of components such as camera modules and touch screen controllers hit the industry in the fourth quarter, and are likely to persist into the second half of the current year, Gartner said.

"Shortages will be a long-term consideration for mobile device vendors, because other fast-growing categories of connected consumer devices, such as media tablets, are competing for the same components," Gartner said.

Sales of unbranded, or 'white-box' handsets exceeded 360 million units in 2010, said Gartner.

Overall mobile phone shipments got a boost last year as large numbers of emerging markets consumers shifted from second-hand or black market handsets to legitimate white box devices, said Milanesi, and because this effect will be smaller in 2011 the market growth in the current year will probably slow to around 13-14%.

(2010 mobile device sales, units in thousands)

 
                    2010      2010 Mkt Shr   2009 
Nokia               461,318   28.9%          440,882 
Samsung             281,066   17.6%          235,772 
LG                  114,155   7.1%           121,972 
RIM                 47,452    3.0%           34,347 
Apple               46,598    2.9%           24,890 
Sony Ericsson       41,819    2.6%           54,957 
Motorola            38,554    2.4%           58,475 
ZTE                 28,769    1.8%           16,026 
HTC                 24,688    1.5%           10,812 
Huawei              23,815    1.5%           13,491 
Others              488,569   30.6%          199,617 
Total               1,596,802 100%           1,211,240

(2010 smartphone sales by Operating System, units in thousands)

 
                    2010    2010 Mkt Shr   2009 
Symbian             111,577 37.6%          80,878 
Android             67,225  22.7%          6,798 
RIM                 47,452  16.0%          34,347 
iOS                 46,598  15.7%          24,890 
Microsoft           12,378  4.2%           15,031 
Others              11,417  3.8%           10,432 
Total               296,647 100%           172,376

By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com

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