Mobile phone market booming

Worldwide mobile phone sales exceeded 156.4 million units in the second quarter of 2004, a 35% increase on the second quarter of...

Worldwide mobile phone sales exceeded 156.4 million units in the second quarter of 2004, a 35% increase on the second quarter of 2003, according to Gartner.

The analyst firm said all regions experienced healthy sales of mobile phones in the second quarter. “In mature markets, such as Western Europe and North America, sales of replacement handsets ensured strong results," said Ben Wood, principal analyst for mobile terminals research at Gartner

Spectacular growth in emerging markets, notably Latin America, further boosted unit sales, he said.

In the second quarter of 2004, Nokia saw a decline of 5.9% in market share compared with the second quarter of last year - from 35.6% down to 29.7%. However, it did increase its market share from its first quarter of 2004 share of 28.9%.

“Nokia’s price cuts gave it a small gain in market share compared to the first quarter, although the average selling price of its handsets fell in the second quarter,” said Wood .

“Motorola maintained its second position based on a strong performance in the Americas, but Gartner expects Samsung to be battling with Motorola for the number two position for the remainder of the year.”

Motorola’s market share slipped slightly in the second quarter compared with the first as it focused on profitability, according to Gartner. Nevertheless, it experienced a solid quarter, with strong performances in North America and Latin America, although it lost share in China.

On a regional basis the Western European market is being driven by consumers who got their first mobile phones in 2000 and 2001 and are upgrading to smaller colour screen phones with built-in cameras that have become available at much lower prices, Gartner said.

Brazil continued to be the driving force in Latin America, although Mexico also contributed strong sales in the region, according to Gartner’s research. Other countries, such as Argentina, are showing signs of recovery from the economic downturn, it said.

The research noted that in North America replacement sales were high as operators subsidised enhanced handsets, and consumers were willing to upgrade to devices with more features, especially camera phones.

Reflecting seasonal trends, Asia/Pacific mobile phone sales were down slightly from the first quarter of 2004.

In China, the government’s efforts to control the economy weakened demand for consumer electronics goods such as mobile phones and in mature markets, such as Taiwan, Singapore and Australia, people held off on buying new phones as they hoped for further price reductions or increases in subsidies.

More than 300 million mobile phones were sold in the first half of 2004, and Gartner analysts project year-end sales will reach about 620 million.

If current momentum is maintained worldwide, sales could reach 650 million units before year-end but, Gartner warned, if that total is exceeded the excess inventory generated could harm sales in the first half of 2005.

Written by Computing SA staff

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