IDC: Smartphones losing out to feature phones

Increased functionality in mainstream feature phones are convincing customers to buy them instead of smartphones in Western Europe, analysts from IDC said during a conference call on Thursday.

The analysts discussed the trend while revealing results of a report on mobile-phone growth during the second quarter this year.

Smartphone sales in Western Europe were up 10 percent during the quarter compared to the same period last year, more than the 7 percent growth in regular mobile phones, said Andy Brown, an IDC analyst. But IDC had expected better in the smartphone market. Users are finding that the enhanced functions on feature phones meet their needs more than the potentially more expensive and often larger smartphones, he said.

Some delayed smartphone product launches may have also affected sales, said Geoff Blaber, an analyst at IDC.

Overall, Nokia continues to dominate the market in Europe with its phones accounting for 74 percent of total phone shipments in the region in the quarter, IDC found.

Nokia also grew its percentage of total Symbian-based phones sold in the quarter, a potentially troubling sign, Brown said. In the second quarter, 98 percent of Symbian phones came from Nokia compared to 89 percent in the same quarter last year.

"It highlights a lack of additional licensees bringing out devices on Symbian," he said. For example, Motorola Inc.'s opinion of Symbian is a bit ambiguous at the moment, as it has recently chosen Linux and Windows Mobile to run some of its newest phones, he said. In addition, smaller vendors such as Samsung Electronics Co. Ltd. are struggling to gain traction with their Symbian devices in Europe and as such will find it difficult to reach the economies of scale that make Symbian a viable product, Brown said.

Gartner also released results of its analysis of the mobile-phone market for the second quarter on Thursday. Both research groups found that while Nokia grew its market share and holds onto its first-place position, Motorola made significant strides. Worldwide, Motorola earned 4.2 percentage points in market share compared to the second quarter last year, reaching 21.9 percent, according to Gartner. Nokia gained 2 percentage points to reach 33.6 market share worldwide, Gartner said.

Both research groups also found that Samsung is struggling a bit. Samsung lost nearly 2 percentage points of worldwide market share but still holds on to the number three spot, with 11 percent of the market, Gartner found.

Worldwide mobile phone sales reached 229 million during the quarter, an 18.3 percent increase over the same period last year, Gartner said.