MANILA, Philippines — Chinese telecom brand ZTE has edged out BlackBerry maker Research in Motion (RIM) as it lands on the top smartphone vendors list of IDC for the first time in the second quarter of 2012, the research firm reported Friday.
The Canadian smartphone maker slipped out of the top smartphone vendors list as its 6.7 percent market share in the first quarter was overtaken by ZTE’s 5.2 percent share this period, suggesting RIM’s further decline below the 5-percent share levels.
This is yet another blow to RIM, which has been struggling with eroding global sales, shifting customer loyalty, and the delay in the release of BlackBerry 10, its newest smartphone platform.
In contrast, ZTE posted record growth in its smartphone division this quarter as it registers a three-fold year-on-year increase on shipments, totaling 8 million units sent across the globe according to IDC.
Overall, however, ZTE remains the fourth largest mobile phone maker in the world, a position it has held for a number of successive quarters already.
ZTE joins HTC, Nokia, Apple, and Samsung in IDC’s top smartphone vendors list, with Taiwan-based HTC showing signs of recovery as it reclaims the fourth spot on the rankings.
Overall, IDC reported flat growth for the worldwide mobile phone market annually, even as smartphone sales continue to shatter record shipments, posting a 42.1-percent year-on-year growth rate to reach 153.9 million unit sales during the period.
Fierce rivals Samsung and Apple continue to slug it out in the smartphone space even as they employ different strategies in selling smartphones to users, IDC said.
“Samsung employs a ‘shotgun’ strategy wherein many models are created that cover a wide range of market segments,” described Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Apple, in contrast, offers a small number of high-profile models. While both companies have expanded their geographic presence in pursuit of market share, the two companies will inevitably come into greater conflict as both try to generate additional gains.”
IDC meanwhile noted that while ZTE cornered a vast market in China, where it is based, the company also enjoyed steep international growth during the quarter “particularly in the U.S. where its smartphones can be found under other brands.”
A reason to smile. A model poses with a ZTE V882 waterproof smartphone at the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore June 19, 2012. Reuters/Tim Chong
But the Chinese phone company’s success stands on shaky ground as it remains to be an OEM vendor in the entire telecom ecosystem, something which it is attempting to change based on its recent moves in the market.
“Brand equity may prove to be an issue for ZTE in future,” IDC said in its Quarterly Mobile Phone Tracker released Friday. “Strong brand recognition is a necessity if high-growth smartphone sales abroad are a priority for the company.”
While brand recognition is not an issue for ZTE in the Philippines, the negative perception of the brand brought by its involvement in a high-profile government corruption case poses a problem as it begins to ship its branded mobile phones here.
Earlier, ZTE officials skirted questions about the issue during the initial launch of its mobile phone division in the Philippinesas it attempts to move away from its tarnished past.
Despite the controversy, however, officials noted that growth in its other divisions — such as in wireless data equipment and dongles — remained robust in the local market.
Aside from this, the company is also embroiled in an FBI probe over its sale of a banned US technology to Iran.
