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Worldwide Mobile Phone Market Grew 19.8%

The worldwide mobile phone market grew 19.8 percent year-over-year in the first quarter of 2011 (1Q11), fueled by high smartphone growth -- especially in emerging markets -- and gains made by market challengers.

According to the latest market study by International Data Corporation (IDC), vendors shipped 371.8 million units in 1Q11 compared to 310.5 million units in the first quarter of 2010.

Smartphone growth worldwide, particularly in Asia-Pacific (excluding Japan), Middle East and Africa (MEA), and Latin America, helped lift the overall market to a new first-quarter high.

Increasingly, mobile phone makers and carriers are making smartphones affordable to a wider variety of people, which has helped drive the market to new heights. Smartphone-specific vendors, such as HTC, continue to grow sales at a steady clip as a result of this trend.

"Several notable vendors, including feature phone makers, outpaced the overall market, which contributed to share losses of some top suppliers," said Kevin Restivo, senior research analyst at IDC. The growth of companies outside the top 5 vendors shows that the overall market is still very much ripe for share gains.

At the same time, feature phones have represented the majority of mobile phone shipments, but still are under tremendous pressure from smartphones. Even popular quick-messaging devices (phones with a QWERTY keyboard), once a bright spot within the feature phone market, appear to be losing market share as smartphones gain popularity.

Still, IDC does not expect feature phones to disappear quickly as there is still strong demand across the globe.

Nonetheless, IDC expects almost all of the worldwide mobile phone market's growth to be driven by smartphones throughout the forecast to 2015. Increasingly, smartphones will drive market growth. This means feature phone makers will either need to become smartphone dependent or consolidate that part of the market.

In the United States last quarter, Apple's iPhone and the LTE-enabled HTC Thunderbolt were two smartphones introduced at Verizon Wireless that helped keep the category front and center of the overall mobile phone market. Feature phones, including once popular quick messaging devices, continued to lose ground.

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