BY AMIT ROY CHOUDHURY

SALES of high-end mobile phones - called smartphones - accounted for as much as 15 per cent of total phones sold in Singapore last year, according to IT research agency Gartner. Smartphones are those that have built-in applications and allow Internet access apart from the standard voice and SMS (short message service) functions.

In Singapore, smartphones cost upwards of $500 without operator plans.

The Gartner study shows that in 2008, as many as 320,000 smartphones were bought in Singapore. The global average for smartphone sales is 12 per cent.

Speaking to BizIT, Anshul Gupta, Gartner principal analyst for mobile devices, technology and service provider research, noted that mirroring worldwide trends, Nokia is the leading smart device maker in Singapore.

'But Nokia is losing market share as its feature-rich phones are facing intense competition from vendors like Taiwan's HTC, Apple and RIM (Research in Motion), makers of the Blackberry phones,' Mr Gupta said.

In the fourth quarter of 2008, smartphone sales in Asia-Pacific excluding Japan recorded 2.3 per cent sequential growth, reaching 7.5 million unit sales, even though overall mobile device sales dropped by 9.2 per cent.

'The drop in overall sales was attributable to weak consumer confidence, but sales of high-end devices remained good, leading to positive sequential growth for smartphones,' Mr Gupta said. 'Touch-based devices continued to attract consumers in this segment.'

Nokia lost market share marginally by two percentage points to Apple in the region. Others that gained were RIM and Samsung. Global sales of smartphones to end-users reached 38.1 million units, up 3.7 per cent from the fourth quarter of 2007.

For the full year, sales came to 139.3 million, up 13.9 per cent from a year earlier.

Roberta Cozza, Gartner research director, noted that the focus from vendors and operators on increasing their smartphone portfolios remained very strong.

'Samsung, RIM, HTC and Apple saw their volumes and share increase during 2008, thanks to their ability to offer compelling device experiences and touch interfaces.'

As a proportion of all global mobile device sales, smartphones remained stable at 12 per cent in the fourth quarter of 2008, up from 11 per cent in the fourth quarter of 2007.

Samsung emerged as one of the top five global vendors for the first time, replacing Sharp. RIM recorded an increase in sales both sequentially and year-on-year, while Nokia's volumes continued to fall.

Ms Cozza noted that Nokia maintained its No 1 position in smartphone sales, but in the fourth quarter, its sales fell 16.8 per cent year-on-year.

This also contributed to the overall weakness of the global smartphone segment in the quarter, as the company commanded 40.8 per cent share of the market.

'Nokia's entry-level smartphone range will continue to offer good value for money, but Nokia remains more exposed to pressure from competition in the higher end of the consumer smartphone market as the N-series loses its appeal,' Ms Cozza said.

Gartner noted that Apple's initial sell-through dropped significantly as sales fell in the fourth quarter. Nevertheless, Apple maintained its third position in the global rankings.

'Apple built an inventory of about two million iPhone units in the third quarter of 2008 which did not reduce significantly in the fourth quarter,' Ms Cozza said.

With Apple's sequential decline, volumes were driven by new product introductions such as the RIM Storm (which is to be available in Singapore soon), the T-Mobile G1 (the first product based on Google's Android platform), and strong performance from Samsung's touchscreen products.

HTC had a very strong quarter with record sales of its HTC-branded devices and operator-branded devices.

In the smartphone operating system (OS) market, Symbian's share of the global market decreased to 47.1 per cent in the fourth quarter of 2008, down from 62.3 per cent a year earlier.

Pressure from new platforms entering the consumer space, the continued decline of Nokia's smartphone sales and the weakness of the Japanese mobile device market have negatively affected Symbian's share, Ms Cozza said.

Meanwhile, RIM has grown its share of the global smartphone market to 19.5 per cent from 10.9 per cent a year earlier. Gartner estimated that Android smartphones accounted for 20 per cent of total Linux sales in the fourth quarter of 2008.

In the fourth quarter, Microsoft's share of the global smartphone market improved sequentially, with unit sales up 16 per cent over the third quarter. This was mainly driven by the popularity of Samsung Omnia and touchscreen products from HTC.

Sales of Linux-based smartphones were up 19 per cent year on year, mainly through Android-based smartphones being available through T-Mobile in the fourth quarter, Ms Cozza said.

This story was first published in The Business Times.