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Global Mobile Phone Sales Up 26% In 3Q - Gartner



Wednesday December 1, 8:44 AM EST


LONDON -(Dow Jones)- Global mobile handset sales rose 26% to over 167 million units in the third quarter according to the latest data from research company Gartner Inc. (ITB).

The results were surprisingly strong as historically, the third quarter is slow in the lead-up to the Christmas sales period in some key markets.

All regions registered growth apart from Japan, Gartner said.

Carolina Milanesi, Gartner analyst for mobile terminals, said: "New handset models and decreasing prices fueled replacement sales in mature markets such as Western Europe and North America. In Asia, Central Europe and the Middle East, emerging markets continued to add new subscribers."

The big news amongst the vendors was that market leader Nokia Corp. (NOK) lifted its market share above 30% after two consecutive quarters of market share declines, while Samsung Corp. (000830.SE) overtook Motorola Inc. (MOT) as the second-largest global handset maker for the first time.



Ben Wood, a principal analyst at Garner, said; "For Nokia, breaking back through the 30% market share barrier will be an important psychological boost after a disappointing start to the year. Now Nokia must maintain this positive momentum and address shortcomings in the code division multiple access, or CDMA, market to ensure it sustains its position."

Wood told Dow Jones Newswires that Nokia has raised its market share by price cutting, but its big challenge is innovation. He said the company needs to add new handset styles to its portfolio as well as making up for lost ground in the U.S. CDMA market.

"It's like turning around a supertanker," he said.

Regarding Samsung and Motorola's fight for the number two spot, Wood said: " The fourth quarter is neck and neck. Motorola can fight back." He noted that Gartner figures are based on end-user sales, not handsets manufactured.

Wood remained confident that the unexpected strength in the third quarter wouldn't affect the traditionally strong Christmas quarter. He maintained his forecast for 650 million handset sales in 2004, although he said it may be a little higher.

However, Wood said that he expects sales growth to fall to around 10% in 2005 from the 20% levels during 2004. He said although emerging market growth will continue to be strong, the replacement cycle in North America and Western Europe is likely to slow.

Following is a table of the worldwide mobile terminal sales to end-users as provided by Gartner (thousands of units):

Company 3Q 2004 3Q 2004 3Q 2003 3Q 2003
Mkt share Mkt share
Nokia 51,695 30.9% 45,381 34.2%
Samsung 22,981 13.8% 14,837 11.2%
Motorola 22,393 13.4% 19,484 14.7%
Siemens 12,758 7.6% 12,110 9.1%
LG 11,142 6.7% 7,082 5.3%
Sony Ericsson 10,683 6.4% 7,065 5.3%
Others 35,417 21.2% 26,884 20.2%
Total Market 167,070 100% 132,844 100%

Company Web site: Http://www.gartner.com
-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@
dowjones.com

Dow Jones Newswires
12-01-04 0844ET


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