Mid-tier smartphones growing fast

The global smartphone market continued to show strength this year, with lower-cost smartphone models doing especially well, says ABI Research.

The global smartphone market continued to show strength in the first quarter of this year, together with the availability of more mid-tier models, according to ABI Research.

The research firm sent out a statement Thursday, which noted a 55 million smartphone shipment in the first three months of this year underscoring the "dynamic growth" of the smartphone market.

While this figure was a million fewer to the previous quarter's shipment, ABI Research senior analyst Michael Morgan attributed this to seasonal sales cycles, which usually spell lower results in the first quarter of any year. The drop over the fourth quarter of the previous year is usually much greater than the million units, he said.

Morgan noted that lower-priced smartphone models are also growing fast in regions previously resistant to expensive, high-end smartphones.

He pointed to Nokia's example--the Finnish phonemaker has in the past few years struggled to compete with high-end offerings from competitors, but had an "explosive" fourth quarter last year with its lower-cost C- and X-model smartphones, which helped grow its smartphone shipments by 25 percent.

This growth continued into the first quarter of this year, defying typical first-quarter declines, and shipping 21.5 million units, up from 20.8 million in the fourth quarter of 2009.

Nokia reported overall sales of 126.9 million handsets in the fourth quarter of last year, 12 percent more than the year before.

"Nokia has a history of success in lower-cost feature phone markets. But until recently, [its] smartphone line-up was exclusively high-end," said Morgan.

But the iPhone, a higher-end device, also saw growing shipment of 8.8 million in the first quarter of 2010, from 8.7 million the quarter before. This was due to strong performance in Japan and China. "The smartphone market as a whole was probably buoyed by improving first quarter holiday season demand from the Asia-Pacific region," said the analyst.

iPhone sales in the region also grew almost five times last year, with China accounting for US$1.3 billion in revenue for the period stretching over the fourth quarter of 2009 and first quarter of 2010. The popularity of the device has spurred Apple to plan a total of 25 stores in the country by the end of 2011.