T-Mobile on Wednesday reported earnings for the company’s holiday quarter, which saw the carrier lose 802,000 customers causing revenue to drop 3.3% to $20.6 billion. The Deutsche Telekom-owned company is the only major U.S. carrier that does not carry Apple’s iPhone, which it blames for the defections, however T-Mobile is looking to bounce back with the launch of a 4G LTE network in 2013. “Though we are not satisfied with the contract customer losses and the decreased total revenues, the quarterly margin improvement year-on-year was impressive,” said CEO of Deutsche Telekom René Obermann. “The spectrum gained through the break-up fee empowers T-Mobile USA to start LTE-based services in key US markets and strengthens its competitiveness.” The company is the last major U.S. carrier to announce plans for an LTE network, with Verizon and AT&T already offering the service and Sprint preparing to launch its new network this year. Read on for T-Mobile’s press release.

HTC on Monday reported that the company’s fourth quarter earnings missed analysts’ estimates. While speaking on the vendor’s earnings call, HTC’s chief financial officer said that the manufacturer ”dropped the ball” with its 2011 devices, SlashGear reports. Winston Yung admitted that the company’s LTE handsets were too thick, offered insufficient battery life and that there was plenty of work to be done to improve both “design and components.” Products launched in the fourth quarter “are not selling as we expected,” Yung said. New phones are on the way, however, and HTC’s next-generation smartphones are expected to be revealed later this month. BGR exclusively reported this past November that HTC will unveil the Ville at Mobile World Congress along side the company’s quad-core flagship HTC Edge.

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Thanks to a strong fourth quarter, Apple has passed LG to become the world’s third largest cell phone vendor by volume, according to new estimates from market research firm IDC. The worldwide mobile phone market grew 6.1%  year-over-year in the fourth quarter as the feature phone market continued to decline to its lowest growth rate in two years. Vendors shipped 427.4 million phones in the fourth quarter compared to 402.8 million units in the same quarter last year. Nokia and Samsung remained the top and No.2 vendors, respectively, though Nokia’s phone shipments slid 7.9% while shipments of Samsung handsets grew 17.6% compared to the same quarter in 2010. Read on for more

“Apple jumped into the third spot globally from the fifth spot last quarter thanks to a record-breaking quarter of shipments,” IDC stated in a press release. ”That represents the Cupertino-based company’s highest-ever ranking on IDC’s Top 5 global mobile phone leaderboard. The launch of Apple’s iPhone 4S smartphone, which is now available in over 90 countries (as of mid-January), was the primary reason the company leapt over LG and ZTE in 4Q11. Device sales in the U.S. and Japan were particularly strong given extra sales days in the quarter and carrier distribution.” The firm’s full press release follows below.

Worldwide Mobile Phone Market Maintains Its Growth Trajectory in the Fourth Quarter Despite Soft Demand for Feature Phones, According to IDC 

01 Feb 2012

FRAMINGHAM, Mass. February 1, 2011 – The worldwide mobile phone market grew 6.1% year over year in the fourth quarter of 2011 (4Q11), as the feature phone market declined faster than anticipated, dragging market growth down to its lowest point in over two years. According to the International Data Corporation (IDC) Worldwide Mobile Phone Tracker, vendors shipped 427.4 million units in 4Q11 compared to 402.8 million units in the fourth quarter of 2010. The 6.1% year-over-year growth was higher than IDC’s forecast of 4.4% for the quarter, but weaker than the 9.3% growth in 3Q11.

“The mobile phone market exhibited unusually low growth last quarter, which shows it is not immune to weaker macroeconomic conditions worldwide,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker. “The introduction of high-growth products such as the iPhone 4S, which shipped in the fourth quarter, bolstered smartphone growth. Yet overall market growth fell to its lowest point since 3Q09 when the global economic recession was in full bloom.”

While smartphones continue to grow in popularity, feature phones still comprise the majority of all mobile phone shipments. “Feature phones accounted for a majority of shipments from four of the five market leaders during the quarter,” said Ramon Llamas, senior research analyst with IDC’s Mobile Phone Technology and Trends team. “Even though their proportion is eroding, feature phones maintain their appeal on the basis of price and ease of use.

“At the same time, feature phones are fighting to maintain their market share,” added Llamas. “To meet the challenge, feature phones are becoming more like smartphones, incorporating mobile Internet and third-party applications. While this may not stem the smartphone tide, it should slow down the rate at which smartphones are selected over feature phones.”

Regional Highlights

• In Asia/Pacific (excluding Japan), the feature phone market declined in conjunction with the region’s largest feature phone markets – China, India, and Indonesia. The impact on phone demand due to the holiday season, which generally means a sales uplift, was minimal in this category. Meanwhile, smartphones maintained their growth momentum as the iPhone 4S was well received in Australia, Hong Kong, Korea, and Taiwan. Competition in the Android market intensified as mid-range vendors, such as Lenovo, Coolpad, and Huawei, shipped large numbers in their home market of China. Elsewhere, the rest of the Android market was dominated by Samsung, followed by HTC and LG. Windows Phone gained some momentum thanks to sales of the HTC Titan and Radar and Nokia Lumia. In Japan, pent-up demand for mobile phones after last year’s natural disasters and weakened economy meant unusually high growth for the country’s mobile phone market. Smartphone sellers, such as Apple, fared particularly well while non-Japanese vendors continue to make incremental gains in the market.

• The Western European mobile phone market was impacted by lower demand, a result of the worsening economic environment. Smartphone growth was not enough to offset the feature phones decline, despite excellent performances from Apple and Samsung. Nokia experienced another difficult quarter as a result of its transition towards Windows Phones. Feature phone shipments were near historic lows, supported primarily by very low-end devices. Overall, the Central Europe, Middle East and Africa (CEMA) markets showed strong double-digit growth due in large part to Samsung’s continued strength in the regions. Bucking its global troubles, Nokia shipments flattened out in the regions after a strong third quarter, enabling it to remain the market leader in the regions. Apple continued to make quiet progress in the regions as well.

• In North America, smartphones held the spotlight with the launch of the Apple iPhone 4S, while LTE smartphones from HTC, LG, Motorola, and Samsung also made important gains. Research In Motion launched several new phones running on BB OS 7 during the quarter, and signaled a late 2012 timetable for its first BlackBerry 10 smartphones to reach the market, leaving an opportunity to its competitors to attack its market share.

• Smartphones also took center stage in Latin America with the launch of multiple models across the region, particularly sub-$200 Android models. The low price points have enabled broader appeal, and have also found placement among popular prepaid markets. Although smartphones continued to grab attention, low-cost feature phones ruled the market, with strong participation from Nokia, Samsung, and multiple Chinese vendors.

Vendor Highlights

Nokia finished the year exactly where it began: as the undisputed leader of total mobile phone shipments. The company took another step in its storied transition, having officially launched its first Windows Phone-powered Lumia smartphones and its Asha line of smartphone-like feature phones. While both have received positive response from the market, Nokia has been quick to adjust its retail experience, customer engagement, and hardware bug fixes. At the same time, the increased focus on the Lumia, combined with changing market conditions in key markets, has prompted Nokia to change its strategy on Symbian smartphones. Fewer Symbian devices will be sold in 2012. Still, Nokia’s broad distribution around the world and manufacturing capabilities make it a serious contender to maintain its leadership position.

Samsung finished the quarter and the year reaching new record levels: breaking the 90 million unit mark for the first time in a single quarter and breaking the 300 million mark for the first time in a single year. Leading the charge for Samsung was its growing smartphone volumes, boosted by the release of several high-end devices (Galaxy S II, Galaxy Note, Galaxy Nexus), mass market models (Galaxy Ace, and Galaxy Y), and new Windows Phone smartphones (Focus Flash and the Focus S). These, along with its own steadily growing feature phone volumes, pushed Samsung closer to market leader Nokia, with fewer than 20 million units separating them in 4Q11.

Apple jumped into the third spot globally from the fifth spot last quarter thanks to a record-breaking quarter of shipments. That represents the Cupertino-based company’s highest-ever ranking on IDC’s Top 5 global mobile phone leaderboard. The launch of Apple’s iPhone 4S smartphone, which is now available in over 90 countries (as of mid-January), was the primary reason the company leapt over LG and ZTE in 4Q11. Device sales in the U.S. and Japan were particularly strong given extra sales days in the quarter and carrier distribution.

LG‘s total volumes declined for the third consecutive quarter, sinking to levels not seen since the second quarter of 2007. Driving this result was a combination of waning interest in its aging feature phones and stalled smartphone volumes. In addition, from a full year perspective, LG posted the largest full year-over-year decline among the leading vendors. Still, the quarter did have some bright spots, including a return to profitability and a warm reception for its Optimus LTE smartphones across multiple markets. 2012 will feature more smartphones from LG, especially LTE-powered models, but the competition has similar smartphone strategies.

Chinese vendor ZTE nearly tied with LG for fourth place, with fewer than a million units separating the two vendors. Long known as a purveyor of entry level devices, ZTE’s smartphones increasingly moved into the spotlight. The company’s primary targets included countries throughout Asia/Pacific, but it also gained presence in EMEA and Latin America, and branched out into North America. Key models for the quarter included its popular mass-market Blade and mid-range Skate Android smartphones, and recently the company added its first Windows Phone-powered smartphone, the Tania.

Motorola Mobility on Thursday announced the company’s results for the fourth quarter last year. The vendor managed $3.4 billion in revenue but posted a net loss of $80 million, or $0.27 per share. Motorola posted a profit of $0.27 per share in the same quarter a year earlier. For the full year, the company’s revenue totaled $13.1 billion, up 14% compared to 2010, and it reported a net loss was $0.84 per share compared to a loss of $0.29 per share in 2010. Motorola shipped 10.5 million mobile devices in the fourth quarter, including 200,000 tablets, and full-year device shipments totaled 42.4 million units. Motorola Mobility’s full press release follows below.

Motorola Mobility Announces Fourth Quarter and Full-Year Financial Results

LIBERTYVILLE, Ill., Jan. 26, 2012 /PRNewswire/ –

Fourth Quarter Financial Highlights

• Net revenues of $3.4 billion
• Non-GAAP net earnings of $0.20 per share compared to net earnings of $0.37 per share in fourth quarter 2010; GAAP net loss of $0.27 per share compared to net earnings of$0.27 per share in fourth quarter 2010
• Mobile Devices net revenues of $2.5 billion, up 5 percent from fourth quarter 2010; Non-GAAP operating loss of $19 million; GAAP operating loss of $70 million
• Shipped 10.5 million mobile devices, including 5.3 million smartphones
• Home net revenues of $897 million, down 11 percent from fourth quarter 2010; Non-GAAP operating earnings of $84 million; GAAP operating earnings of $57 million

Motorola Mobility Holdings, Inc. (NYSE: MMI) today reported net revenues of $3.4 billion in the fourth quarter of 2011, comparable to the fourth quarter of 2010. The GAAP net loss in the fourth quarter of 2011 was $80 million, or $0.27 per share, compared to net earnings of $80 million, or $0.27 per share, in the fourth quarter of 2010. On a non-GAAP basis, net earnings in the fourth quarter 2011 were $61 million, or $0.20 per share, compared to net earnings of $108 million, or $0.37 per share, in the fourth quarter of 2010.

For the full year, 2011 net revenues were $13.1 billion, up 14 percent compared to 2010. For the full year, the GAAP net loss was $0.84 per share compared to a loss of $0.29 per share in 2010. On a non-GAAP basis, net earnings were $0.33 per share compared to a loss of $0.28 per share in 2010.

The Company generated positive operating cash flow of $225 million and $357 million in the fourth quarter and full year, respectively. Total cash at the end of the quarter was $3.6 billion and includes cash, cash equivalents, and cash deposits.

Details on non-GAAP adjustments and the use of non-GAAP measures are included later in this press release and in the financial tables.

“In the fourth quarter, we received very positive consumer response to Motorola RAZR, which combined an iconic brand with ultra-thin in an innovative smartphone.  Our Home business continues to be a leader in the industry’s transformation to all IP, with unique solutions that enable rich media experiences across any screen,” said Sanjay Jha, chairman and chief executive officer, Motorola Mobility. “We remain energized by the proposed merger with Google and continue to focus on creating innovative technologies.”

Operating Results

Mobile Devices net revenues in the fourth quarter, impacted by the increased competitive environment, were $2.5 billion, up 5 percent compared with the year-ago quarter. The GAAP operating loss was $70 million compared to operating earnings of $72 million in the year-ago quarter. The non-GAAP operating loss was $19 million compared to operating earnings of $56 million in the year-ago quarter. For the full year 2011, net revenues were $9.5 billion, an increase of 22 percent compared to 2010. The 2011 GAAP operating loss was$285 million compared to an operating loss of $76 million in 2010. The 2011 non-GAAP operating loss was $126 million compared to an operating loss of $198 million in 2010.

The Company shipped a total of 10.5 million and 42.4 million mobile devices in the fourth quarter and full year 2011, respectively. This included 5.3 million and 18.7 million smartphones and approximately 200 thousand and 1 million tablets in the fourth quarter and full year, respectively.

Mobile Devices highlights:

• Launched Motorola RAZR^™ extending the iconic RAZR brand around the world
• Announced DROID RAZR MAXX^™, featuring twice as much battery life as the leading competitor and measuring only 8.99 millimeters
• Unveiled the award-winning DROID 4 by Motorola, the thinnest and most powerful 4G LTE QWERTY smartphone featuring a five-row keyboard and edge-lit keys
• Introduced two new 4G LTE tablets, the DROID XYBOARD 10.1^™ and XYBOARD 8.2^™.
• Announced the “life proof” Motorola DEFY^™ MINI and slim MOTOLUXE^™, two new value priced additions to Motorola’s growing budget-friendly portfolio
• Shipped award-winning MOTOACTV^™, the world’s first combined GPS fitness tracker and MP3 player
• Launched two flagship devices in China – the TD-SCDMA Motorola MT917 and the Motorola XT928, a dual-core, dual-mode, dual-standby smartphone

Home segment net revenues in the fourth quarter were $897 million, down 11 percent compared with the year-ago quarter. GAAP operating earnings were $57 million, compared to$54 million in the year-ago quarter. Non-GAAP operating earnings were $84 million compared to $90 million in the year-ago quarter. Fourth quarter set-top shipments were down 3 percent compared to the year-ago quarter. For the full year 2011, net revenues were $3.5 billion, compared to $3.6 billion in 2010. GAAP operating earnings increased to $226 millionfrom $152 million in 2010. The 2011 non-GAAP operating earnings increased to $332 million from $272 million in 2010. Full year set-top shipments were up 6 percent compared to 2010.

Home highlights:

• Launched DreamGallery next-generation HTML-5 video navigation software in North America with Shaw Communications
• Expanded video leadership and paved the way for Canada’s move to all-MPEG-4 broadcast and On-Demand HD services with Eastlink
• Demonstrated market leadership with introduction of new carrier Ethernet product line for the deployment of cost-effective commercial services
• Introduced Motorola APEX3000, which delivers market-leading density to cost-effectively add greater demand for narrowcast services such as VOD and DVR
• Selected by Altibox AS in Norway to provide VAP 2400 HD wireless video bridge to enable multi-room TV services

Merger Update

As previously announced on August 15, 2011, Motorola Mobility and Google Inc. (“Google”) (NASDAQ: GOOG) entered into a definitive agreement for Google to acquire Motorola Mobility for $40.00 per share in cash, or a total of approximately $12.5 billion.  On November 17, 2011, Motorola Mobility stockholders voted overwhelmingly to approve the proposed merger with Google at the Company’s Special Meeting of Stockholders.  The Company continues to work closely with Google to complete the proposed acquisition of Motorola Mobility as expeditiously as possible.

The Company notes that the transaction remains subject to various closing conditions. Antitrust clearances, or waiting period expirations, are required by the U.S. Department of Justice (DOJ), by the European Commission, and in Canada, China, Israel, Russia, Taiwan and Turkey. Requisite filings have been submitted to the appropriate regulatory body in each of these jurisdictions. Clearances have been received in Turkey and Russia. In Canada and the United States, the statutory waiting period for the transaction has expired although the parties have been informed that the reviewing agencies have not closed their respective investigations.  In December 2011, the Chinese Ministry of Commerce proceeded to phase two of its investigation.  In February, the European Commission is expected to announce whether it will close its investigation or proceed to a phase two investigation.

The Company currently expects the transaction to close in early 2012 once all conditions have been satisfied and reminds stockholders that it is possible that the failure to timely meet such conditions or other factors outside of the Company’s control could delay or prevent completion of the transaction altogether.

For more information on the proposed merger, please visit http://investors.motorola.com.

Conference Call and Webcast

In light of the pending acquisition of the Company by Google, the Company does not conduct a financial analyst conference call or webcast following the release of its earnings information nor provide financial guidance. To access the fourth quarter results and other financial information, please visit http://investors.motorola.com.

Consolidated GAAP Results

A comparison of results from operations is as follows:

	Fourth Quarter			Full Year
(In millions, except per share amounts)	2011	2010		2011	2010
Net revenues	$3,436	$3,425		$13,064	$11,460
Gross margin	854	915		3,317	2,965
Operating earnings (loss)	(78)	126		(142)	76
Earnings (loss) before income taxes	(78)	110		(148)	(4)
Net earnings (loss) attributable to Motorola Mobility Holdings, Inc.	($80)	$80		($249)	($86)
Basic earnings (loss) per common share *	($0.27)	$0.27		($0.84)	($0.29)
Diluted loss per common share*	($0.27)	N/A		($0.84)	N/A
Weighted average common shares outstanding
Basic	300.2	294.3		297.1	294.3
Diluted	300.2	N/A		297.1	N/A

Non-GAAP Adjustments for fourth quarter and full year 2011 and 2010

	Fourth Quarter
Per Share Impact	2011	2010
GAAP Earnings (Loss) per Common Share *	($0.27)	$0.27
Merger-related costs**	0.22	——
Reorganization of business charges	0.09	0.06
Stock-based compensation expense	0.12	0.14
Intangible assets amortization expense	0.04	0.05
Joint venture wind-down costs	——	0.03
IP settlement	——	(0.19)
Total Non-GAAP Adjustments ***	0.47	0.10
Non-GAAP Earnings per Common Share *	$0.20	$0.37

	Full Year
Per Share Impact	2011	2010
GAAP Loss per Common Share *	($0.84)	($0.29)
Merger-related costs**	0.28	——
Reorganization of business charges	0.09	0.20
Stock-based compensation expense	0.52	0.55
Intangible assets amortization expense	0.20	0.19
Legal claim provision	0.07	——
Joint venture wind-down costs	——	0.03
Legal settlement	——	(0.77)
IP settlement	——	(0.19)
Total Non-GAAP Adjustments ***	1.16	0.01
Non-GAAP Earnings (Loss) per Common Share *	$0.33	($0.28)

Best-Ever Mobile Broadband Sales and Strong Cash Flows Highlight AT&T’s Fourth-Quarter Results; Stock Buyback Begins on Previous 300 Million Share Authorization

2012 Outlook: Solid Revenue, Margins and Earnings Growth with Strong Free Cash Flow

Dallas, Texas, January 26, 2012

• $(1.12) diluted EPS in fourth quarter compared to $0.18 diluted EPS in the year-ago period. Excluding significant items for both quarters, EPS of $0.42 compared to $0.55 in the year-ago quarter, driven by the company’s best-ever quarter for smartphone activations — up nearly 60 percent year over year
• Consolidated revenues of $32.5 billion, up $1.1 billion, or 3.6 percent, versus the year-earlier period
• In 2011, AT&T’s growth engines — wireless, wireline data and managed services — represented 76 percent of total revenues and grew 7.5 percent versus 2010, led in the fourth quarter by:
  • 10.0 percent growth in wireless revenues
  • 19.4 percent growth in wireless data revenues, up $956 million versus the year-earlier quarter
  • 16.4 percent growth in strategic business services revenues
  • 43.7 percent growth in consumer U-verse revenues
• 9.4 million smartphone sales, best-ever quarter and 50 percent more than previous quarterly record and nearly double 3Q11 sales; 82 percent of postpaid sales were smartphones
• 717,000 wireless postpaid net adds, the largest increase in five quarters; 2.5 million increase in total net wireless subscribers, with gains in every customer category
• Best-ever quarter for Android and Apple smartphones, including 7.6 million iPhone activations
• 571,000 branded computing device (tablets, aircards, etc.) sales, best-ever quarter to reach 5.1 million total subscribers; up almost 70 percent from a year ago
• 12th consecutive quarter with a year-over-year increase in postpaid wireless subscriber ARPU (average monthly revenues per subscriber), up 1.4 percent to $63.76 — more than $6 higher than nearest competitor’s ARPU
• Second consecutive quarter of sequential growth in wireline business revenues
• Sixth consecutive quarter of year-over-year growth in wireline consumer revenues, driven by AT&T U-verse^® services
• 208,000 net gain in AT&T U-verse TV subscribers to reach 3.8 million in service, with continued high broadband and voice attach rates

AT&T Inc. (NYSE:T) today reported fourth-quarter results highlighted by record sales, strong wireless network performance and improved wireline revenue trends.

“We had a tremendous year in terms of execution, and we have excellent momentum across our growth platforms,” said Randall Stephenson, AT&T chairman and chief executive officer.”This was a blowout quarter for sales. Our network performance is at a high level on voice quality and best-in-class mobile download speeds. Sales continue to be strong and business revenue trends are on a good track.

“Looking ahead, we start 2012 with the best visibility we’ve had in some time, and we’re well positioned to deliver solid results — including continued revenue growth with margin expansion, solid earnings per share growth and strong cash flow,” Stephenson said.”In short order, we will begin share repurchases to deliver significant value to our owners.”

Fourth-Quarter Financial Results
For the quarter ended December 31, 2011, AT&T’s consolidated revenues totaled $32.5 billion, up $1.1 billion, or 3.6 percent, versus the year-earlier quarter.

Compared with the fourth quarter of 2010, operating expenses were $41.5 billion versus $29.3 billion; operating loss was $9.0 billion, compared to operating income of $2.1 billion; and AT&T’s operating income margin was (27.7) percent, compared to 6.7 percent. Excluding fourth-quarter significant items, operating expenses were $28.1 billion versus $25.8 billion; operating income was $4.4 billion, compared to $5.6 billion; and operating income margin was 13.5 percent, compared to 17.7 percent.

Fourth-quarter 2011 net income attributable to AT&T totaled $(6.7) billion, or $(1.12) per diluted share. Excluding significant non-cash charges of $0.65 from the actuarial loss on benefit plans and $0.48 for directory asset impairments, along with a one-time charge of $0.44 for termination of the T-Mobile USA acquisition and a one-time gain of $0.03 from a tax settlement, adjusted earnings per share was $0.42.

(The actuarial loss on benefit plans was driven by a reduction in the discount rate from 5.8 percent to 5.3 percent. While our investment returns were better than the overall market, they were less than expectations; this was largely offset by better-than-expected force and medical cost management. The directory asset impairment resulted from an annual review of intangible assets compared to fair value.)

These results compare with reported net income attributable to AT&T of $1.1 billion, or $0.18 per diluted share, in the fourth quarter of 2010. Excluding significant items, earnings per share for the fourth quarter of 2010 was $0.55 per diluted share.

Fourth-quarter 2011 cash from operating activities totaled $7.5 billion, and capital expenditures totaled $5.5 billion. Also included in the fourth quarter, the company made a $1.0 billion contribution to the company’s pension fund. No additional funding is required in 2012. Free cash flow — cash from operating activities minus capital expenditures — totaled $2.0 billion.

Full-Year Results
For the full year 2011, compared with 2010 results, AT&T’s consolidated revenues totaled $126.7 billion versus $124.3 billion, up 2.0 percent; operating expenses were $117.5 billion, compared with $104.7 billion; net income attributable to AT&T was $3.9 billion versus $19.9 billion; and earnings per diluted share was $0.66 compared with $3.35. Excluding significant items, earnings per share totaled $2.20, compared with $2.29.

Compared with 2010 results, AT&T’s full-year cash from operating activities totaled $34.6 billion, down from $35.0 billion. Capital expenditures, including capitalized interest, totaled $20.3 billion versus $20.3 billion, including a 6.4 percent increase in wireless-related capital investment versus 2010, as AT&T aggressively deployed next-generation mobile broadband networks. Free cash flow totaled $14.4 billion, compared with $14.7 billion.

Outlook
AT&T is well positioned to deliver solid revenue and earnings growth with improving margins while returning substantial value to shareowners. In 2012, AT&T expects continued consolidated revenue growth, including postpaid wireless ARPU growth around 2 percent for the year. The company also expects to expand consolidated and wireless margins while keeping wireline margins stable. Achieving these targets will lead to mid-single-digit or better earnings growth with an opportunity to accelerate earnings growth beyond 2012. Outlook excludes any significant items. Importantly, little economic lift is assumed with these expectations.

AT&T expects capital expenditures to be about $20 billion, stable with 2011, as increases in wireless spending offset declines in wireline capital expenditures. The company also expects strong free cash flow, with full-year free cash flow in the $15 to $16 billion range, and plans to begin execution of its existing 300 million share repurchase authorization immediately.

WIRELESS OPERATIONAL HIGHLIGHTS
Record-setting mobile broadband sales and the company’s best postpaid subscriber growth in five quarters drove double-digit wireless revenue growth. AT&T continues to lead the industry in smartphone penetration, mobile broadband sales and postpaid ARPU. Highlights included:

Best Postpaid Growth in Five Quarters. AT&T posted a net increase in total wireless subscribers of 2.5 million in the fourth quarter to reach 103.2 million in service. This included gains in every customer category. Subscriber additions for the quarter include postpaid net adds of 717,000, the best gain in five quarters. Prepaid net adds were 159,000, connected device net adds were 1,029,000 and reseller net adds were 592,000. Fourth-quarter net adds reflect accelerated adoption of smartphones, including the October launch of iPhone 4S, increases in prepaid and reseller subscribers and sales of tablets and connected devices such as automobile monitoring systems, security systems and a host of other emerging products.

Record Quarter for Smartphone Sales. AT&T delivered its best-ever smartphone sales quarter — up nearly 60 percent from the year-ago period. (Smartphones are devices with voice and data capabilities and an advanced operating system to better manage data and Internet access.) In the fourth quarter, the company set a new record with 9.4 million smartphones sold, nearly double the number sold in the third quarter and 50 percent more than the previous quarterly record. Fourth-quarter smartphone sales represented more than 80 percent of postpaid device sales. Both iPhone and Android device sales set records. During the quarter, more than 7.6 million iPhones were activated, the majority of which were iPhone 4S, which went on sale Oct. 14, and more than twice as many Android smartphones were sold versus the fourth quarter a year ago. iPhone sales were helped by a superior customer experience, with AT&T delivering download speeds up to three-times faster than on other U.S. carriers’ networks.

At the end of the quarter, 56.8 percent of AT&T’s 69.3 million postpaid subscribers had smartphones, up from 42.7 percent a year earlier and 32.8 percent two years ago. The average ARPU for smartphones on AT&T’s network is 1.9 times that of the company’s non-smartphone devices. About 87 percent of smartphone subscribers are on FamilyTalk^® or business plans. Churn levels for these subscribers are significantly lower than for other postpaid subscribers.

Best-Ever Quarter for Branded Computing Device Sales. AT&T had its best sales quarter ever for branded computing subscribers, a new growth area for the company that includes tablets, aircards, mobile devices, tethering plans and other data-only devices. AT&T added 571,000 of these devices to reach 5.1 million, an almost 70 percent increase in total subscribers from a year ago. Most of those new subscribers were tablets, with 311,000 added in the quarter, more than half of which were postpaid.

Double-Digit Growth for Wireless Revenues. Total wireless revenues, which include equipment sales, were up 10.0 percent year over year to $16.7 billion. Wireless service revenues increased 4.0 percent, to $14.3 billion, in the fourth quarter.

Wireless Data Revenues Increase 19.4 Percent. Wireless data revenues — driven by Internet access, access to applications, messaging and related services — increased by $956 million, or 19.4 percent, from the year-earlier quarter to $5.9 billion. AT&T’s postpaid wireless subscribers on monthly data plans increased by 16.4 percent over the past year. The number of subscribers on tiered data plans also continues to increase. About 22 million, or 56 percent, of all smartphone subscribers are on tiered data plans, and about 70 percent have chosen the higher-tier plans.

Industry-Leading Postpaid ARPU Continues Growth. Driven by strong data growth, postpaid subscriber ARPU increased 1.4 percent versus the year-earlier quarter to $63.76. This marked the 12th consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU. AT&T continues to lead the industry with postpaid subscriber ARPU about $6 higher than the nearest competitor. Postpaid data ARPU reached $26.01, up 14.9 percent versus the year-earlier quarter.

Postpaid Churn Up Only Slightly. Despite record smartphone sales and the first holiday sales period since the loss of AT&T’s iPhone exclusivity, postpaid churn was up only slightly at 1.21 percent, compared to 1.15 percent in both the year-ago fourth quarter and in the third quarter of 2011. Total churn was up slightly at 1.39 percent versus 1.32 percent in the fourth quarter of 2010 and 1.28 percent in the third quarter of 2011.

Wireless Margins Reflect Record Sales. Fourth-quarter wireless margins reflect record-setting smartphone sales and customer upgrade levels. This was offset in part by improved operating efficiencies and further revenue gains from the company’s growing base of high-quality smartphone subscribers.

AT&T’s fourth-quarter wireless operating income margin was 15.2 percent versus 22.9 percent in the year-earlier quarter, and AT&T’s wireless EBITDA service margin was 28.7 percent, compared with 37.6 percent in the fourth quarter of 2010. (EBITDA service margin is earnings before interest, taxes, depreciation and amortization, divided by total service revenues.) Fourth-quarter wireless operating expenses totaled $14.2 billion, up 20.9 percent versus the year-earlier quarter, and wireless operating income was $2.5 billion, down 27.0 percent year over year.

WIRELINE OPERATIONAL HIGHLIGHTS
AT&T’s fourth-quarter wireline results were highlighted by the second consecutive quarter of sequential wireline business revenue growth, a 44 percent increase in U-verse revenues and solid cost management:

Sequential Wireline Business Revenue Growth Continues. Total business revenues grew sequentially for the second consecutive quarter. Revenues were $9.3 billion, down 1.4 percent versus the year-earlier quarter but a slight increase over the third quarter of 2011. The year-over-year decline reflects economic conditions and weakness in voice and legacy data products somewhat offset by growth in IP data. Business service revenues, which exclude CPE, declined 1.2 percent year over year, compared to a year-over-year decline of 4.3 percent in the year-ago quarter and were essentially flat sequentially, despite fewer business days in the fourth quarter.

Robust Strategic Business Services Revenues. Revenues from the new-generation capabilities that lead AT&T’s most advanced business solutions — including Ethernet, VPNs, hosting, IP conferencing and — grew 16.4 percent versus the year-earlier quarter, continuing strong trends in this area. This now represents a nearly $6 billion annualized revenue stream.

VPN Growth Drives Business IP Revenues. Total business IP data revenues grew 9.2 percent versus the year-earlier fourth quarter, led by growth in VPN revenues. IP-based solutions allow customers to easily add managed services such as network security, cloud services and IP conferencing on top of their infrastructures. Total business data revenues grew 1.3 percent year over year.

Wireline Consumer Revenues Continue Growth. Driven by strength in IP data services, revenues from residential customers totaled $5.3 billion, an increase of 0.5 percent versus the fourth quarter a year ago. The fourth quarter marked the sixth consecutive quarter of year-over-year growth.

208,000 U-verse Net Adds. AT&T U-verse TV added 208,000 subscribers to reach 3.8 million in service. As U-verse scales, its margins improve, contributing to profitability. In the fourth quarter, the AT&T U-verse High Speed Internet attach rate was 90 percent and about half of new subscribers took AT&T U-verse Voice. About three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple-play customers was almost $170, up 2.5 percent year over year.

AT&T’s U-verse deployment has reached its goal of passing 30 million living units. Companywide penetration of eligible living units continues to grow and was at 15.9 percent in the fourth quarter, and 25.0 percent across areas marketed to for 36 months or more. AT&T’s total video subscribers, which combine the company’s U-verse and bundled satellite customers, reached 5.6 million at the end of the quarter, representing 23.9 percent of households served.

U-verse Broadband Continues Strong Growth. AT&T U-verse High Speed Internet delivered a fourth-quarter net gain of 587,000 subscribers to reach a total of 5.2 million, helping offset losses from DSL. Overall, AT&T lost 49,000 wireline broadband connections. About 74 percent of consumers have a broadband plan delivering speeds of 3 Mbps or higher versus 65 percent in the year-ago quarter.

U-verse Drives Consumer Revenue Transformation. U-verse continues to drive a transformation in wireline consumer, reflected by the fact that consumer IP revenues now represent 53.2 percent of wireline consumer revenues, up from 45.0 percent in the year-earlier quarter. Increased AT&T U-verse penetration and a significant number of subscribers on triple- or quad-play options drove 18.7 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice) and 4.3 percent sequential growth. U-verse revenues grew 43.7 percent compared with the year-ago fourth quarter and were up 8.6 percent versus the third quarter of 2011.

Growth in Revenues Per Household Continues. Wireline revenues per household served increased 7.0 percent versus the year-earlier fourth quarter and were up 2.3 percent sequentially (average revenues per household is total wireline consumer revenues divided by the average monthly households in service), driven by AT&T U-verse services. This marked AT&T’s 16th consecutive quarter with year-over-year growth in wireline consumer revenues per household as U-verse scales and represents a larger portion of this category.

Consumer Connection Trends. In the fourth quarter, AT&T posted a decline in total consumer revenue connections primarily due to expected declines in traditional voice access lines, consistent with broader industry trends and somewhat offset by increases in U-verse TV and VoIP (Voice over Internet Protocol) connections. AT&T U-verse Voice connections increased by 136,000 in the quarter and 598,000 over the past four quarters. Total consumer revenue connections at the end of the fourth quarter were 41.3 million, compared with 43.4 million at the end of the fourth quarter of 2010 and 41.9 million at the end of the third quarter of 2011.

Wireline Revenues Down Slightly. Total fourth-quarter wireline revenues were $14.9 billion, down 1.4 percent versus the year-earlier quarter and down slightly sequentially. Fourth-quarter wireline operating expenses were $13.1 billion, down 0.2 percent versus the fourth quarter of 2010 and down 0.1 percent sequentially. Wireline operating income totaled $1.8 billion, down from $2.0 billion in the fourth quarter of 2010 and down versus the third quarter of 2011. AT&T’s fourth-quarter wireline operating income margin was 11.9 percent, compared to 13.0 percent in the year-earlier quarter and down slightly from 12.1 percent in the third quarter of 2011. Improved consumer and business IP data revenue trends and execution of cost initiatives helped to partially offset declines in voice revenues.

 

Netflix on Wednesday announced its earnings for the fourth quarter of 2011. The company noted $876 million in revenue, up 47% from the same quarter last year, and earnings per share of $0.73. Analysts had pegged the company to report revenue in the ballpark of $857.4 million and EPS of $0.54, Barron’s relayed. Netflix also said it added 220,000 new subscribers, a far cry from the 800,000 it lost during the third quarter, and now serves 21.67 million streaming customers in the United States. The company has 24.4 million U.S. customers signed up for DVD subscriptions and that figure jumped by 610,000 during the quarter.

Netflix serves 1.9 million international streaming customers and added 380,000 new subs during the quarter. “We are encouraged by the strength in acquisition that we are seeing, coupled with continued improvements in retention among our domestic streaming members,” the company said in a statement. “For Q1 to date, our domestic net additions for streaming are tracking close to our net additions in Q1 2010 of 1.7 million net additions. Given this trend, we are comfortable with our ability to continue to expand our domestic streaming contribution margin.”

Yahoo has frozen its hiring process and may even consider layoffs according to a new report. The news was revealed by AllThingsD on Thursday, which wrote that the choices were made ahead of expected weak fourth quarter earnings. Yahoo isn’t considering mass layoffs, however; instead, AllThingsD said they are likely to be “small and selective” if they happen at all. Yahoo experienced a bit of turmoil earlier this week when co-founder, former CEO and board member Jerry Yang resigned from the company. AllThingsD said other board members may be considering leaving the company, too. Yahoo will report its fourth quarter earnings next Tuesday.

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MetroPCS on Thursday announced its fourth quarter 2011 subscriber results. The carrier added 197,000 net subscribers, which missed analyst expectations that the carrier would add between 214,000 and 250,000 net customer additions, Reuters said. The company stated that it ended the year with more than 9.3 million total subscribers and said it added about 1.2 million subscribers during the 2011 calendar year. Churn took a turn for the worse since the fourth quarter of 2010, however; the company reported 3.7% churn in the fourth quarter, up from 3.5% during the same period in 2010. That figure is an improvement over the 4.5% churn the carrier reported during the third quarter of 2011, however. MetroPCS’s full press release follows after the break. 

MetroPCS Releases Fourth Quarter 2011 Subscriber Results

Fourth Quarter 2011 Subscriber Highlights Include:
Consolidated net subscriber additions of 197 thousand and approximately 1.2 million for the fourth quarter 2011 and full year 2011, respectively

Quarterly churn of 3.7%, a sequential decrease of 80bps from the third quarter of 2011, and an increase of 20bps from the fourth quarter of 2010

Serve over 9.3 million subscribers, an increase of approximately 1.2 million subscribers or 15%, from the fourth quarter of 2010

DALLAS–(BUSINESS WIRE)–Jan. 5, 2012– MetroPCS Communications, Inc. (NYSE: PCS), the nation’s leading provider of no annual contract, unlimited, flat-rate wireless communications service, today announced selected subscriber information for the quarter and year ended December 31, 2011.

In the fourth quarter of 2011, MetroPCS reported gross additions of approximately 1.22 million subscribers, which represents a 7% increase over the fourth quarter of 2010. The Company ended the fourth quarter of 2011 with over 9.3 million subscribers, which includes net additions during the quarter of 197 thousand subscribers. MetroPCS added approximately 1.2 million subscribers during the twelve months ended December 31, 2011. Churn for the fourth quarter of 2011 was 3.7% compared to 3.5% in the fourth quarter of 2010 and down from 4.5% in the third quarter of 2011. The decrease in churn from the third quarter of 2011 was primarily driven by normal seasonal effects related to traditional retail selling periods, as well as improved network performance resulting from the investment in our CDMA network to meet increased data demands.

“We reported solid subscriber growth in the fourth quarter, adding 197 thousand net subscriber additions, marking the sixth consecutive year in which we have added over 1 million net subscriber additions. We were also pleased with our fourth quarter churn of 3.7% representing a significant sequential decrease,” said Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS.

Subscriber Metrics
Three Months Ended     Three Months Ended     Twelve Months Ended     Twelve Months Ended
December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010

Consolidated Subscribers
End of Period 9,346,659 8,155,110 9,346,659 8,155,110

Net Additions 197,410 297,726 1,191,549 1,515,586

Churn 3.7 % 3.5 % 3.8 % 3.6 %

The subscriber results for the fourth quarter of 2011 and the twelve months ended December 31, 2011 may not be reflective of subscriber results for any subsequent period.

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Netflix announced on Wednesday that its streaming subscribers around the world watched more than 2 billion hours of video during the fourth quarter of 2011. The company also said it served more than 20 million streaming subscribers during the quarter. “We were thrilled to deliver more than two billion hours of TV shows and movies across 45 countries in the fourth quarter,” said Netflix Co-Founder and CEO Reed Hastings. “Netflix delights members by giving them choice, convenience and control over the entertainment they love for an incredibly low price.” The company lost 800,000 customers during the third quarter when it upset customers by raising its prices and then confused them with a short-lived attempt at a DVD rental spinoff business called Qwikster. Netflix is set to debut its original series “Lilyhammer” on February 6th and fresh content, such as Drive, Hugo, Captain America and Margin Call, will be available to customers in the coming months. The full Netflix announcement follows after the break.

Netflix Members Enjoy More Than Two Billion Hours of Movies and TV Shows in Fourth Quarter

With More U.S. Members Watching Instantly, and Aided by Global Expansion, Netflix Streaming Hours Grew Dramatically in 2011
Jan 4, 2012

LOS GATOS, Calif., Jan. 4, 2012 /PRNewswire/ – Netflix Inc. (Nasdaq: NFLX) said today its members instantly watched more than two billion hours of TV shows and movies streaming from Netflix in the fourth quarter of 2011.

With more than 20 million streaming members globally, Netflix has revolutionized entertainment by allowing people to enjoy TV shows and movies when, where and how they want with a click of a remote, mouse or the touch of a screen.

“We were thrilled to deliver more than two billion hours of TV shows and movies across 45 countries in the fourth quarter,” said Netflix Co-Founder and CEO Reed Hastings. “Netflix delights members by giving them choice, convenience and control over the entertainment they love for an incredibly low price.”

Throughout 2011, Netflix continued to add to its already expansive variety of TV shows and movies in the United States, signing new multi-year agreements with CBS, Twentieth Century Fox, Lionsgate, Miramax, Open Road Films, NBCUniversal, Dreamworks Animation, MGM and the Disney-ABC Television Group among others, and announcing the creation of the highly-anticipated Netflix original series “House of Cards,” a gripping political thriller from Executive Producer David Fincher and starring two-time Academy Award winning actor Kevin Spacey.

Another Netflix original, “Lilyhammer,” starring Steven Van Zandt of “The Sopranos” and Bruce Springsteen’s E Street Band, as a New York gangster in Norway, premieres on Netflix in the U.S., Canada and Latin America on February 6.

“In the coming months, Netflix members can enjoy complete seasons of great TV series from all the major networks and most branded cable channels as well as fantastic films like Drive, Hugo, Captain America and Margin Call,” said Netflix Chief Content Officer Ted Sarandos. “The more great TV shows and movies Netflix adds, the more people watch.”

HTC said it will launch a number of new and competitive smartphone models, including a fresh batch of LTE devices in the United States, to help it end its fourth quarter slump. The company recently revised its outlook for the fourth quarter and said revenue would be flat, a move that came as a surprise to investors used to a company that had previously seen six consecutive months of record revenue leading up to October. HTC was the first company to launch an Android smartphone in the United States, the first to launch a WiMAX smartphone on Sprint and the first to sell a 4G LTE device on Verizon Wireless. “We will focus on the product next year, better and more competitive,” HTC’s chief financial officer Winston Yung told Reuters, noting that the situation isn’t that serious. “Other than new LTE phones for the U.S. market, we also have phones for the global market. We will launch some worldwide flagship products. We’re confident in them. We have six quarters of improvement, the most conservative guidance is 45 million units of shipments this year, a lot higher than 25 million last year.”

Citigroup blamed the weak fourth quarter sales on “inferior products” that weren’t able to keep up with Samsung’s Galaxy S II and Apple’s iPhone family. Additionally, investors aren’t so sure that HTC can maintain the innovation that has made its past phones so attractive. “More foreign investors are still selling HTC as the company doesn’t have many bets in hand,” Masterlink Investment Advisory vice president Tom Tang told Reuters. ”And unlike last time [the company was in this position], HTC didn’t make a share buyback plan this time.”

HTC’s ongoing lawsuits will not help the situation, either. The company recently said that it will not appeal a 2009 ruling that gave IPCom the winning hand in a patent lawsuit. The decision could result in a German injunction against sales of HTC’s smartphones, which could hurt sales during the holiday season.

BGR recently reported exclusive details surrounding two upcoming HTC smartphones — the HTC Ville and HTC Edge — both of which are expected to be unveiled at Mobile World Congress in Barcelona, Spain in February.

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Asus will launch as many as six Ultrabooks in October, Asus chairman Jonney Shih said on Monday. The notebooks will offer screen sizes between 11.6-inches and 13.3-inches. Intel detailed its plans to introduce a new category of notebooks, which it dubbed “Ultrabooks” in May. The chip maker hopes the new category will dominate 40% of the consumer notebook market by the end of 2012 and says the devices will combine the performance of today’s laptops with a tablet-like experience. Earlier reports suggested that mass production of Ultrabooks will begin in September and Intel recently invested $300 million in an effort to speed up the process of creating the devices. The first such device to hit the market is largely expected to be the ASUS UX21. Acer, Asus and Lenovo have all detailed plans to launch sub-$1,000 Ultrabooks during the fourth quarter but Shih said the six from Asus will be priced between $900 and $2,000.

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HTC’s 10-inch Puccini Android tablet will hit the market in September or October, HTC’s chief financial officer Winston Yung said during a press conference at the Taiwan Stock Exchange. We published the first solid images of the Puccini in July when we noted the tablet will likely offer a 1.5GHz processor, an 8-megapixel camera and stylus input support similar to what the HTC Flyer offers. While earlier rumors suggested the Puccini would launch on AT&T with 4G LTE support, we think the September/October time frame might be too early for that to happen. We expect the Puccini to run on AT&T’s HSPA+ network instead. Yung also reaffirmed HTC’s plans to appeal a recent ITC ruling that found HTC guilty of infringing on Apple patents.

[Via DigiTimes]

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Acer, ASUS and Lenovo will launch Intel-powered “Ultrabooks” priced below $1,000 during the fourth quarter of this year, Intel’s executive vice president Sean Maloney said during an event in Taipei. Several of Intel’s other partners aren’t as sure they will be able to hit that price target. DigiTimes said the bill of materials to build an 11.6-inch Ultrabook exceeds $700, which doesn’t leave a lot of room for profits. However, Intel did recently announced that it will invest $300 million in its Ultrabook initiative during the next three to four years, which could be used to offer manufacturers a subsidy per unit for marketing efforts. That, in turn, might help Intel’s partners keep their devices priced below $1,000. Intel hopes its new Ultrabooks will grab a 40% share of the notebook market by the end of 2012.

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Sprint’s head of business markets Paget Alves recently confirmed to CNET that the carrier will launch cloud-based services during the fourth quarter of this year. The offering will be available to small and medium sized business customers. Sprint will provide security, software and Internet hosting, and it will also offer an “infrastructure as a service” option, Alves told CNET. “The telcos are in a unique position because our business is centered around the cloud,” Alves said. “There’s quite a bit of demand. It’s the [number one] topic of conversation with [chief information officers].” Other carriers are also working on cloud-based services; in April, Verizon Wireless acquired cloud and managed IT infrastructure leader Terremark Worldwide for $1.4 billion.

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Chinese consumer electronics company ZTE exploded from the “other” category in the fourth quarter of 2010 to displace Apple as the No. 4 cell phone maker in the world. In doing so, the Chinese manufacturer also bumped RIM off of the top 5 list for the quarter and, more alarmingly perhaps, for the full year. Market analysis firm IDC on Thursday issued its data for the final quarter of 2010 and ZTE was without question the biggest shock. Growing 76.8% year-over-year, ZTE shipped 16.8 million cell phones in the fourth quarter, compared to 9.5 million in the same quarter a year prior. Apple bested ZTE’s growth, ballooning by 86.2% year-over-year, but fourth quarter shipments slid in at 16.2 million units. Apple blew past RIM in the third quarter of 2010 as the company finally broke into the top 5 thanks to explosive iPhone sales. RIM now finds itself in the troubling “other” category — a position it will fight to escape using an army of new BlackBerry smartphones in 2011. The cell phone market grew 17.9% overall in the fourth quarter according to IDC. Hit the break for IDC’s full press release, including charts showing the top 5 cell phone companies by shipments in the fourth quarter and full year.

Mobile Phone Market Grows 17.9% in Fourth Quarter, According to IDC

27 Jan 2011

FRAMINGHAM, Mass. Jan. 27, 2010 – The worldwide mobile phone market grew 17.9% in the fourth quarter of 2010 (4Q10), a new quarterly high driven by smartphones. According to the International Data Corporation (IDC) Worldwide Mobile Phone Tracker, vendors shipped 401.4 million units in 4Q10 compared to 340.5 million units in the fourth quarter of 2009. Vendors shipped a total of 1.39 billion units on a cumulative worldwide basis in 2010, up 18.5% from the 1.17 billion units shipped in 2009.

The strong quarterly and annual growth comes after a weak 2009, which saw the market decline by 1.6%. A stronger economy and a wider array of increasingly affordable smartphones helped lift the market to its highest annual growth rate since 2006 when it grew 22.6%.

“The mobile phone market has the wind behind its sails,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker. “Mobile phone users are eager to swap out older devices for ones that handle data as well as voice, which is driving growth and replacement cycles.”

It’s not just smartphone-focused suppliers that capitalized on the mobile phone market’s renewed growth last year. ZTE, a company that sells primarily lower-cost feature phones in emerging markets, moved into the number 4 position worldwide in 4Q10. It is the first quarter the Chinese handset maker finished among IDC’s Top 5 vendors.

“Change-up among the number four and five vendors could be a regular occurrence this year,” added Ramon Llamas, senior research analyst with IDC’s Mobile Devices Technology and Trends team. “Motorola, Research In Motion, and Sony Ericsson, all vendors with a tight focus on the fast-growing smartphone market who had ranked among the top five worldwide vendors during 2010 are well within striking distance to move back into the top five list.”

Market Outlook

IDC believes the worldwide mobile phone market will be driven largely by smartphone growth through the end of 2014. “Feature phone users looking to do more with their devices will flock to smartphones in the years to come,” noted Restivo. “This trend will help drive smartphone sub-market to grow 43.7% year over year in 2011.”

Regional Analysis

• The Asia/Pacific mobile phone landscape was driven by low-cost and high-end devices in 4Q10. Domestic brands in India like G-Five, Micromax, and Karbonn grew with aggressive advertising and branding activities for entry-level phones, while ZTE and Huawei worked closely with carriers to push low-cost Android smartphones in China. High-end smartphones, however, were equally well-received, resulting in higher shipments from Apple, Samsung, and HTC in 4Q10. Korea had the biggest smartphone appetite accounting for two-thirds of phones shipped in 4Q10, up from one-eighth a year ago.

• In Western Europe, carrier smartphone promotions motivated more users to scrap their feature phones, resulting in strong smartphone sales. The iPhone 4, HTC Desire, Nokia N8, Samsung Galaxy S, and Blackberry 8520, which were among the region’s top sellers, contributed to the overall market’s growth. Consequently, the feature phones experienced their sharpest decline ever. In CEMA, quarterly volumes breached the 70 million unit threshold for the first time, marked by an influx of Chinese and unbranded handsets. Meanwhile, smartphones experienced brisk growth due to falling prices and more Android-powered devices.

• The United States mobile phone market closed out the year with more vendors becoming more active in this space. Market leaders RIM and Apple maintained a healthy lead, while newcomers Dell, Huawei, Kyocera, and Sanyo launched their first smartphones to the U.S. market. In addition, 4G took another step forward with the commercial launch of Verizon Wireless’ LTE network. Similarly, in Canada, the focus was on smartphones. Android-powered devices from multiple players, along with incumbent vendors RIM and Apple, pushed shipment volumes to a new record level.

• In Latin America, sustained user interest in smartphones drove the market, resulting in strong results for Nokia, RIM, and Samsung as well as relative newcomer Huawei. Smartphones, as well as QWERTY-enabled feature phones, helped boost social networking and messaging, two fast-growing trends in the market. Finally, Alcatel and ZTE once again thrived in the inexpensive entry-level device market.

Top Five Mobile Phone Vendors

Nokia overall unit volume slipped 2.4% in the fourth quarter, which the vendor attributed to the “intense competitive” environment and component shortages. The result was lower feature phone shipments. The company did, however, grow smartphone volume by 38% compared to the same prior-year quarter. Nokia launched the C7 and the C6-01 touchscreen smartphones as well as the C3 combination touchscreen & QWERTY device in the fourth quarter. Still, smartphone ASPs dropped 16% on a year-over-year basis.

Samsung reached a new milestone in 4Q10, pushing through the 80 million unit threshold for the first time in the company’s history and improving its profit margins for the second straight quarter. Driving shipment volumes was the continued success of its Galaxy S smartphones, of which the company sold nearly ten million units worldwide for the year. Similarly, Samsung’s mass-market and touch-screen phones earned a strong following in emerging markets.

LG crossed the 30 million unit mark for the quarter, due in part to the success of Optimus One smartphone sales across multiple regions. LG’s smartphone strategy is paying off; the company sold more than a million units in the first month of availability, and newer versions (Optimus 2X, Optimus Black) are expected later this year. Meanwhile, LG’s feature phones comprised the majority of shipments, but an aging portfolio and lower prices within emerging markets left the company vulnerable to the competition.

ZTE finished the quarter in the number four position with shipments steadily spreading from its home country of China to developing regions such as Africa and Latin America. ZTE has also recently made inroads in developed markets such as Western Europe and the U.S. as well as Japan. While most of its shipments have historically concentrated on entry-level and mid-range devices, some of its recent success is directly attributable to its rapidly expanding smartphone line, such as the Android-based Blade and Racer devices. Meanwhile, its S- and C-series entry-level feature phones provided additional competition within emerging markets.

Apple The iPhone maker slipped to the number 5 position despite a record quarter for unit shipments and the departure soon thereafter of CEO Steve Jobs on medical leave. It was the company’s second straight quarter on IDC’s Top 5 list. The iPhone sold particularly well in developed regions of the world, such as North America and Western Europe. Apple, which said it could have sold more iPhones last quarter had it been able to make more, is set to introduce the touchscreen device on Verizon next month.

Top Five Mobile Phone Vendors, Shipments, and Market Share, Q4 2010 (Units in Millions)

Top Five Mobile Phone Vendors, Shipments, and Market Share, 2010 (Units in Millions)