Mobile phone sales fall for the first time

According to a survey by Dataquest, mobile phone sales fell 3.2% last year, the first-ever decline in an industry that saw a...

According to a survey by Dataquest, mobile phone sales fell 3.2% last year, the first-ever decline in an industry that saw a compound annual growth rate of close to 60% between 1996 and 2000.

Nearly 399.6 million mobile phones were sold in 2001, compared with over 412.7 million in 2000, the survey said.

Handset makers faced a tougher market, especially in Europe and Latin America, as mobile phone operators cut subsidies on handsets and started selling subscriptions and prepaid service without phones, fuelling the market for used handsets. Leftover inventory from the last quarter of 2000 also cut into handset sales in key markets, Dataquest said.

The economic slump and the promise of new high-speed mobile data services, which require special handsets, led buyers to postpone handset replacement plans.

High growth rates in the mobile-phone market will not return as quickly as they disappeared, with grim prospects for the first half of 2002. Colour screens on mobile phones may be a catalyst for replacement sales in the latter half of the year, according to Dataquest.

Market leader Nokia managed to extend its market share and sell 10.5% more phones than in 2000, while the overall market declined. The Finnish handset maker controlled 35% of the market in 2001 with 139,672 units sold, up from 30.6% and 126,369 units a year earlier, Dataquest said.

Motorola saw unit sales dip 1.7%, from 60,094 in 2000 to 59,092 in 2001, but the company remains the world's second-largest handset vendor, with a 14.8% market share, up from 14.6 in 2000, according to the survey.

The difference in market share between the world's third, fourth and fifth-largest handset makers is minimal. Siemens, Samsung Electronics and Ericsson take 7.4%, 7.1% and 6.7% of the pie, respectively, Dataquest said.

Of all the leading vendors Samsung saw the biggest growth, with 2001 unit sales at 28,234, up 36.8% from 20,639 in 2000. Samsung diversifying its product portfolio and profiting from clever marketing, according to Dataquest.

Siemens recorded a 10.2% growth in unit sales, while Ericsson, which in October last year merged its handset business with Japan's Sony, sold 35% fewer handsets. The Sony Ericsson joint venture recently introduced its first phones and might win the third overall market-share position back from its German rival Siemens, Dataquest said.

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