Android Rockets Past iPhone on Path To No. 2 Globally

Smartphone sales worldwide jumped 50.5 percent in the second quarter, compared to a year ago. Android-based devices leaped past Apple's iPhone to become the third most popular OS worldwide, and analysts expect it to become number two. In the U.S., Android passed the BlackBerry to a 34.1 percent market share, up from just 3.9 percent a year ago.

Global smartphone sales grew 50.5 percent year over year to 61.6 million in the second quarter, Gartner said Thursday. Moreover, sales of Android-based smartphones were robust, with Google's mobile operating system leaping past Apple's iOS to become the third most popular platform worldwide.

In the United States, Android overtook Research In Motion's BlackBerry and led the smartphone OS market with a 34.1 percent share. By contrast, Android held a mere 3.9 percent share in the same period last year, noted Gartner Research Vice President Carolina Milanesi. "We are expecting Android to become the second-largest OS at a worldwide level before the end of the year," Milanesi said.

Sales of Apple's iPad, which enjoyed successful international launches during the quarter, had no impact on the smartphone market, Milanesi noted. "We believe that most tablet users still feel the need for a truly pocketable, yet highly capable, device for those situations when it's inconvenient to carry a device with a larger form factor," she explained.

New smartphones from Apple, HTC and Motorola helped drive strong sales in the quarter. However, shortages of active-matrix organic LED (AMOLED) displays and other crucial components impaired sales of some of the more popular new smartphones, the research firm observed.

Apple's mobile-device sales reached 8.7 million and accounted for 14.2 percent of the smartphone market in the quarter. Gartner analysts noted that Apple's sales would have been even higher if it had not been forced to tightly manage inventory in advance of the iPhone 4's launch.

Furthermore, Gartner said Apple's sales suffered from some iPhone 4 supply constraints. The research firm expects a wider global rollout of iPhone 4 will sustain Apple's sales momentum throughout the second half of 2010.

Given that the iPhone 4's antenna problems didn't come to light until after the end of the second quarter, the news had no impact on Apple's latest results. Moreover, Gartner believes that the impact on sales will be very limited even in the quarters to come.

"Reception issues are more prominent in the U.S. than in other markets due to the network congestion you see," Milanesi said. "Apple stated that return rates on iPhone 4 are very limited."

BlackBerry sales reached 11.2 million worldwide in the second quarter. And Gartner expects RIM to further benefit from the launch of devices running the new BlackBerry OS during the quarter currently under way.

"We believe the Torch's form factor will still appeal more to business users than to consumers and will stop many loyal BlackBerry users defecting to other platforms," the research firm's analysts said. "But it won't attract many new users to the brand."

Smartphones accounted for 19 percent of the global cell-phone market overall, which rose 13.8 percent to 325.6 million in comparison with the same period in 2009. Still, the double-digit growth wasn't entirely good news for handset makers, since average selling prices were lower than expected and margins fell, Milanesi observed.

"We attribute the decline in ASPs to a stronger dollar, a depreciating euro, and intense competition that drove price adjustments and changes to the product mix," Milanesi said.

Nokia retained its leading position in the global cell-phone market by shipping 111.5 million units, but the handset maker's global market share fell 2.6 percentage points from the year-earlier period to 34.2 percent. Samsung placed second with a 20.1 percent global market share.

Posted: 2010-08-13 @ 4:13pm PT

Adam, I can't believe it took someone that long to make the point. Android runs on more than one device, on more than one carrier, so it should go without saying it's going to have more activations; who would expect differently?

Posted: 2010-08-13 @ 1:59pm PT

Apple never intended to lead the market share in mobile phones. Remember, Jobs would have been happy with a modest 1% pie in 2008.

It is NOT strictly Android vs. iPhone. It's a fun stat to follow for the fans, but at the end of the day, Google sells ads and Apple sells hardware. That's their respective bread and butter business models. Android will be the dominating market leader, but how much direct revenue does Google make for each Android phone sold? (I imagine HTC, Motorola and Samsung pocket the bulk of the revenue.) Apple in the meantime may not lead the market share, but if they are making $200 profit per phone, then they are making $4B per year on ONE product line? Now as a shareholder and consumer, that excites me greatly.

Disclaimer: I'm a Google power user (Gmail, Earth, Sketchup, Picasa and Search) with an iPhone 4. I own shares of both companies.

Posted: 2010-08-13 @ 12:51pm PT

There are 200,000 Android activation EVERY DAY, compared with the so called "record setting sales" by iPhone 4 of 3 million in first hottest 3 weeks, 3 million in 3 weeks = 150,000 per day. Android WINS hands down.

iPhone will go the way of Mac... history always repeats itself, boys.

Posted: 2010-08-13 @ 11:51am PT

I believe that all your figures where taken from the second quarter when no one was buying iPhone waiting for the iPhone 4 to come out; let's see what the 3rd quarter brings.

Posted: 2010-08-13 @ 11:46am PT

Keep dodging the facts, boys. It's not about phones or operating systems. It's about Google smartphones vs. Apple smartphones. Doesn't matter who makes the hardware any more than it matters who makes the PC in a Windows vs. Apple debate.

Posted: 2010-08-13 @ 8:38am PT

Awesome point, Adam. That's completely what I was going to say. The haters have been framing this comparison incorrectly for quite some time now, and it's journalistically irresponsible at best.

Posted: 2010-08-13 @ 7:03am PT

Stop comparing operating systems to phones. The IPHONE is a phone the Droid is a phone...However Android is an operating system. If you want compare operating systems fine, Android wins because it is on several different phones.....but which smart phone sells the best is the question.