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=DJ Mobile Phone Makers Sell 112.7M Handsets In 1Q - Gartner
By Taska Manzaroli Of DOW JONES NEWSWIRES
BERLIN (Dow Jones)--Mobile phone makers beat expectations by selling 112.7 million handsets in the first quarter, with Nokia Corp. (NOK) strengthening its market leadership, figures from research firm Gartner Inc. (IT) showed Monday.
The results represent an increase of 18% from the year-earlier quarter and were driven by consumers upgrading handsets to models that offer color screens or cameras.
"We don't know if this is an anomaly or an ongoing trend for 2003," said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. "If this does carry on, a market in excess of 470 million units is possible" in 2003, he said.
Of the top players, Nokia and Samsung Electronics Co. (Q.SSE) managed to improve their share of the increasingly competitive mobile phone market. Motorola Inc. (MOT), Siemens AG (SI) and SonyEricsson, the venture of Sony Corp. (SNE) and Telefon AB LM Ericsson (ERICY), all lost market share in the period.
Nokia, with a first-quarter market share of 35%, continued to have more than double the share of its nearest rival. And even with more than 50% of almost all global system for mobile communications, or GSM, markets in Europe and Asia, the Finnish manufacturer will grow in these regions during the year, Gartner said.
Nokia sold 39.5 million handsets in the first quarter, according to Gartner.
Consumers are being drawn by phones that can send color photographs, pictures and sound. Vodafone Group PLC (VOD), the world's largest wireless operator, said last week that its customers had activated, by the end of March, 413,000 handsets capable of sending multimedia messages.
"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," Wood said.
Analysts at AG Edwards & Sons told clients last month that Nokia's new 3650 camera-phone has become one of the firm's best-selling models shortly after its launch.
Nokia's continuing strength leaves Motorola and Samsung battling it out for the number two position. Further down the rankings, SonyEricsson and LG Electronics Inc. (Q.LGE) are vying for the fifth slot, having both sold more than 5 million handsets in the first three months, according to Gartner.
South Korean manufacturers Samsung and LG Electronics are solidly entrenched in the code division multiple access, or the CDMA standard used widely in Asia and the U.S., and both continue to make inroads into GSM, according to Gartner.
Motorola, plagued by delivery problems last year, has gone from bearing down on Nokia to "looking over its shoulder at Samsung," Wood said. The U.S. firm offloaded 16.6 million handsets compared with Samsung's 11.9 million in the first quarter.
Gartner warned that there are several risks that could impact the industry in the second quarter and beyond. The analysts highlighted inventory problems in China and the economic impact of the severe acute respiratory syndrome, or SARS in Asia.
Moreover, with more than 100 manufacturers competing in the market, there's likely to be pressure to lower prices as companies struggle to survive.

Following is a table of the worldwide mobile terminal sales to end-users as provided by Gartner (in 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%
Company Web site: http://www.gartner.com

-By Taska Manzaroli, Dow Jones Newswires; 49 30 2888 410; [e-mail]

(END) Dow Jones Newswires
06-02-03 0914ET