Nokia’s Market Share Declines Again. The Big Winners? The Little Guys

Recently, Nokia (NYSE: NOK) has been trying to position itself as a company taking better control of its destiny — from making major management changes, to this week bundling Symbian under its wing — but whatever the fruits of those strategic decisions may turn out to be…they’re not represented in Gartner’s latest report on mobile device market share, which indicated that Nokia, and Symbian, are still on top, but still losing market share worldwide. And what’s eye-catching about the numbers, published today, is the collective rise of a much smaller, “white-box” manufacturers in Asia, which are eating away at Nokia and others in less mature markets.

Gartner’s report on Q3 mobile phone sales worldwide indicates that in all 417 million units were sold in the third quarter of 2010. That represents a 35 percent increase over Q3 2009. Smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 per cent of overall mobile phone sales in the third quarter of 2010.

In devices, Nokia sold 117.5 million units, compared to 113 million the year before, giving it a market share of 28.2 percent, a decline of nearly eight percent over the same quarter last year. Samsung, LG (SEO: 066570), Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) and Motorola (NYSE: MOT) also saw a decline in market share. Among that group, the only one that saw a higher volume of sales was Samsung. Apple (NSDQ: AAPL), RIM (NSDQ: RIMM), HTC, ZTE and Huawei all increased their market share and sales volume.

What’s notable in the table above is that the biggest increase in both volume and market share has been in the “others” category. This represents the many smaller handset makers that develop cut-price devices, typically using chipsets from Mediatek or Spreadtrum Communications. While white-box devices have been around for some time in the Chinese market, these handsets are now making their way into other territories like Africa, India, Latin America and Russia, according to Reuters.

Nokia has been most impacted by the rise of these white-box manufacturers, says Gartner analyst Carolina Milanesi, since a large part of Nokia’s business for years now has been in these same developing markets. And that headache is not going away soon, as many of them are now also moving into more sophisticated smartphones, and Gartner expects white-box devices to be the main driver behind a 30 percent growth in unit sales for the full year 2010.

— Smartphone sales have nearly doubled in Q3 over the same period last year, to 80.5 million units compared to 41 million in 2009. This high volume meant that almost every platform was a winner in terms of volume (the exceptions being devices using Microsoft (NSDQ: MSFT) and Linux platforms). Gartner’s figures, which it organises by OS in the smartphone category, indicate continuing consolidation of market share on to three main platforms – Symbian, Android and Apple’s iOS. Together these three made up 78.8 percent of the market in Q3, compared to 65.2 percent a year ago. The RIM’s market share went down around six percentage points to 14.8 percent this quarter over last year, and Microsoft’s new Windows Phone 7 looks like it’s arrived just in time: its share had slipped to under three percent.

Android has had a particularly huge impact in the U.S., notes Gartner. Android-based phones, both high-end and lower-priced designs, accounted for between 75 percent and 80 percent of all of Verizon Wireless’s smartphone sales in the quarter. Worldwide, Android made an enormous leap to 25.5 percent of the market compared to Q3 a year ago, when it had just 3.5 percent.

— Tablet devices were not factored into these calculations, but Gartner says it will start to add them in 2011, when it expects some 54.8 million media tablets like the iPad will be sold.