DJ Gartner/1Q/Handset -2: Demand Seen Across All Regions
Edited Press Release
BERLIN (Dow Jones)--Gartner Inc. (IT) said the mobile phone industry experienced better than expected sales in the first quarter, as worldwide mobile phone unit sales totaled 112.7 million units, an 18% increase from the first quarter of 2002.
"The mobile handset industry rode the crest of a wave of robust replacement demand to realize record levels of sales to end-users for the first quarter," said Bryan Prohm, senior analyst with the mobile communications worldwide research group for Gartner.
"Significant demand was recorded across all geographical regions during the quarter, and annualized sales trends based on these results suggest the market could be on pace for a double-digit rate increase for the full calendar year."
Nokia Corp. (NOK), with a 35% market share in the first quarter of 2003, continued to have more than double the market share of its nearest competitor. Despite market share of more than 50% in almost all GSM markets in Europe and Asia/Pacific, Gartner analysts said Nokia is still positioned to grow market share in these core markets through the remainder of the year.
Worldwide mobile terminal sales to end-users estimates for 1Q 2003 (thousands of units):
Company 1Q 2003 1Q 2003 1Q 2002 1Q 2002 Mkt share Mkt share Nokia 39,479 35.0% 32,649 34.2% Motorola 16,561 14.7% 16,804 17.6% Samsung 11,879 10.5% 8,890 9.3% Siemens 8,585 7.6% 8,121 8.5% Sony Ericsson 5,385 4.8% 6,001 6.3% Others 30,786 27.3% 22,867 24.0% Total Market 112,674 100.0% 95,333 100.0%
Note: Table includes iDEN shipments, but excludes mobile WLL and ODM to original equipment manufacturer (OEM) shipments. Source: Gartner Dataquest (June 2003).
The remainder of 2003 will see Motorola (MOT) and Samsung Electronics (Q.SSE) battle for the No. 2 position, while Sony Ericsson and LG Electronics (Q.LGE) will try to hold the No. 5 position. Both South Korean vendors are solidly entrenched in leadership positions in the CDMA segment, and both continue to make inroads into GSM markets across the globe.
"In 2003, an explosion in the availability of color screen and camera phones is expected in mature markets, such as Western Europe, and we predict that many customers will be tempted to replace their existing mobile terminals," said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. "Photo messaging, which Gartner terms 'disposable photography,' is expected to be the cornerstone service in mobile network operators' marketing campaigns throughout the year."
"The mobile terminals market in 2003 will be characterised by 'device diversity' as mobile terminal manufacturers launch a wide range of new handsets with features such as gaming, music and video. However, the majority of worldwide sales will remain in the low-tier, low-function segment," said Wood.
While the worldwide mobile phone industry has reason to be excited by 1Q 2003 results, Gartner analysts said there are several risks unique to 2003 market supply and demand dynamics that could impact the industry during the second quarter, as well as the rest of the year.
"There is a deepening inventory predicament in China, and there is the economic impact of severe acute respiratory syndrome (SARS) in the Asia/Pacific region and beyond," said Ann Liang, industry analyst with the mobile communications group for Gartner in Asia/Pacific. "Clearly, then, any optimism should be met with an equal measure of prudence."
Gartner analysts have also expressed concern over the number of vendors trying to compete in the mobile phone industry. There are more than 100 manufacturers now competing in the global market, and this will result in downward pressure on average prices for mobile terminals as companies struggle to survive and resort to competing almost solely on price.
(END) Dow Jones Newswires
06-02-03 0745ET
