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Smart phone growth explodes, dumb phones not so much

In 2010, property values may have tanked, retail sales may have been meh but smart phones continued their march into more hands worldwide, with Android and Apple's iPhone leading the way.

Smart phone shipments globally were up 74.4 percent in 2010, to 302.6 million, from 2009, according to a new report from research firm IDC. In the last quarter of the year, 100.9 million smart phones were shipped, up 87.2 percent from the fourth quarter of 2009.

And though "dumb" phone sales haven't dipped globally as a result of the smart phone explosion, certain regions — including the U.S., Western Europe and Japan — are seeing decreasing interest in phones that aren't smart.

"Android continues to gain by leaps and bounds, helping to drive the smart phone market," said Ramon Llamas, senior research analyst with IDC's Mobile Phone Technology and Trends team, in a statement. "It has become the cornerstone of multiple vendors' smart phone strategies, and has quickly become a challenger to market leader Symbian."

(Symbian is the operating system Nokia uses on its smart phones, and while we in the U.S. are barely interested in Nokia phones, they're huge worldwide. However, a recent report showed that Android had overtaken Symbian worldwide.)

But what about all those less-expensive feature phones that don't cost an arm and a leg and your first-born child? Are smart phones eating into the dumber phone market?

"We're not seeing cannibalization yet on a worldwide basis," said Llamas in e-mail comments to "There's still a lot of growth to be had within emerging markets (Latin America, Africa, Asia Pacific), and first-time users usually go to a feature phone (less expensive device and a less expensive monthly service plan) instead of a smart phone (more expensive device and more expensive plan). But in some regions (USA, Western Europe, Japan), we are seeing feature phone cannibalization. It just depends on which markets you look at."

This year, the smart phone market will continue to boom as phone makers expand their offerings, Llamas said. "The high-end of the market has been important to help grow the smart phone market in recent years," but IDC believes manufacturers will offer more "midrange and low-end smart phones at lower prices to reach the mass market. In the same manner, even high-end devices will become available at lower prices. This will result in greater competition and more selection for users."

Nokia shipped 100.3 million phones in 2010, up 48.2 percent from last year, IDC said. Research In Motion, maker of the BlackBerry, shipped 48.8 million pones, up 41.4 percent from 2009.

Apple shipments of its iPhone increased 89.2 percent in 2010, with 47.5 million devices.

"Apple's iPhone gained more ground in the worldwide smart phone market, with shipment volume growth coming from Asia/Pacific and Japan," IDC said. "In addition, Apple made further inroads into the enterprise market, with more companies adding Apple to their approved smart phone list and increased development of corporate-centered applications. Rumors of an iPhone 5 have begun to heat up the blogosphere, with many expecting a new design and perhaps a mobile wallet."

But the biggest winners in terms of percentage increases among phone manufacturers were Samsung and HTC, also key makers of phones using Google's Android operating system. Samsung shipments of 23 million in 2010 represented a 318.2 percent increase over 2009; HTC's 21.5 million shipments were a 165.4 percent increase over the year before.

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