The cell phone market in 2010 from a financial P.O.V.

It's not over until it's over and 2010 finished just days ago if you ask the cell phone manufacturers. Or rather – their financial results for the year. Now, as all of them have reported their yearly results it is time to take a look at their standings and all the (un)kept promises for the past year.

Nokia – the world's phone champion gets weary

Nokia, despite its trouble in the smartphone segment, remains the world's largest cell phone producer with the whopping 453 million shipped phones, almost a third of all phones shipped in 2010. But with smartphones starting to occupy a major share of the world's phone sales, the company will have a hard time maintaining this position for a long time. The Finns spend a huge percentage of their advertisement money on the Nokia N8 in an attempt to draw more users to Symbian^3, but popular opinion seems to fluctuate towards iOS and Android as only 5 million Symbian^3 phones were sold throughout the last quarter of 2010.

Android is swiftly overtaking the smartphone market. Latest data from Canalys shows that the green robot dethroned Symbian in Q4 2010 and sold 33.3 million units. Nokia's Symbian phones registered sales of 31 million placing them second. But this is far from unexpected, the Finns have been losing their share in smartphones for a while now and in 2010 it slipped dramatically to 30.6%, down from 44.4% in the fourth quarter of 2009. 

Sales of the N8 kept Nokia afloat in the high-end segment and contributed to a rise in the average selling price of Nokia phones. In the fourth quarter, the average price of phones by Nokia reached nearly $210 (156 euro), up from $185 (136 euro) in the previous quarter. Good as it sounds, most of the other companies have much higher average prices. In comparison, Taiwanese HTC hit a record average selling price of $364 in the last quarter of 2010. Higher average price usually translates into a better profitability margin for the company.

What does the future hold for Nokia? If 2009 was the year of the smartphone with the launch of the first major iPhone competitor, the Motorola DROID, and if 2010 was the year of the tablet with the arrival of the Apple iPad, then 2011 is going to bring twice as many smartphones and tablets. That's where Nokia seems to be missing a major cycle as the company is still unclear about the future of its N9 and MeeGo. And while all the major manufacturers are rushing to join the tablet race, the Finns remain silent on that front as well.



Samsung picking up pace to challenge Nokia

Samsung saw its profit grow further driven by sales of its hugely successful Galaxy S in all its forms. The company passed the 80 million sold phones threshold for the first time in the last quarter of 2010. Combine this with more than 10 million Galaxy S phones sold since their launch and the future looks bright for the Koreans. This year's strong results put the company closer to the world's leader, Nokia, and some reports suggest that Sammy is set to overtake the Finns within three years. Currently, the Koreans rate better in the average price of phones, which stood at $257 for their handsets.

The company is also spending huge amounts in research and development – the company will spend nearly $38.4 billion in 2011. Research in screen technology alone accounts for around $4.8 billion. Add to this a massive increase in workforce and Samsung seems pretty serious about its goal to become the world's number one phone maker.

2011 will be a key year in that aspect as the company is expected to officially announce its first dual-core handset at MWC in February and have it out in the first half of the year. The Samsung Galaxy S2 is expected to not only have better performance with a dual-core chip, but also to have a better Super AMOLED Plus screen.



LG – life's not so good for its mobile unit

Life was good for phone makers in 2010, but not so much for LG. The company with the smiling face had very aggressive pricing on some of its phones (think LG Optimus One). Good as it sounds, that dragged revenue and profits down and the company's fourth quarter results are an illustration to that. The company slipped 9.7% year-on-year in the last quarter in terms of sales and reported loss of nearly $232 million.

Some reports suggest that LG will change its policy on key models. Pricing is expected to change to less affordable and one of the first handsets to reflect that is the upcoming LG Optimus 2X. We instantly fell in love with its dual-core performance and gorgeous IPS-LCD screen, but the price of nearly $680 (500 euro) at retail is hard to swallow. 




ZTE – the unexpected Chinese guest might be here to stay

The biggest surprise this year was Chinese manufacturer ZTE, which made its way to the world's top 5 cell phone producers and sat comfortably in the fourth place. The company sells mainly in its home market of China, but in 2010 it also grew to Latin America and Africa and is already starting to appear in Western markets as well.

The appearance of ZTE in the world's top 5 ranking shows just how important the Asian market is. The U.S. remains the biggest country market for smartphones, but China is growing at an astounding pace and is currently second. Competition is always a good thing and ZTE will certainly bring some competition to low and mid-range phones in 2011.

Just another strong year for Apple

Apple continues its triumphant pace across the mobile segment with growth matched only by ZTE. And while the Chinese phone maker concentrates on more affordable handsets, Apple targets the high-end segment, which means higher revenue and profits.

But what makes Apple different than all the rest in this ranking is that Cupertino is the only company that makes only smartphones. That is why the company fits better in the worldwide smartphone ranking, where it occupies the third place with 16.2 million shipped phones in the last quarter of the year and a share of 16%. In addition, Verizon's iPhone 4 was one of the most anticipated devices breaking the record for first day sales in Big Red's history despite its lack of 4G connectivity and a dual-core processor.



2010 was one of the best years for the mobile industry with impressive growth of 18.5%. A total of 1.39 billion handsets were shipped throughout the year. Impressive as it sounds, next year might be even better with North America ahead in the 4G race and many carriers joining in with their own high-speed networks, which would require more compatible phones. Stay tuned to PhoneArena as we will certainly cover what could turn out to be one of the most exciting years in mobile tech so far.

source: IDC and Canalys