Sony Ericsson Outlook Grim Despite Overall Handset Market Growth Sony
RELATED SYMBOLS: (SNE)(ERICD)
Feb 12, 2003 (Wireless Data News/PBI Media via COMTEX) -- 150 million euros
($162 million) each of its two parent companies are investing in it. The joint
venture of Ericsson [Nasdaq: ERICY] and Sony [NYSE: SNE] lost handset market
share in 2002 not only to the companies who were already ahead of it, but to
companies who previously trailed its numbers.
Overall, the handset market grew at a rate of 6.6 percent, from 380 million
units shipped in 2001 to 405 units shipped in 2002, according to research by
Falls Church, Va.-based Telecom Trends International.
Among the top four handset companies, Samsung grew the fastest in 2002 with
growth of 35.1 percent, increasing its market share lead over Siemens [NYSE:
SI]. Siemens, however, didn't lose ground overall in 2002. The German company's
mobile phone sales grew at a rate of 24.3 percent.
Nokia [NYSE: NOK] maintained its commanding lead in handset sales, growing its
market share at a rate of 8.6 percent. Although its annual growth rate was
slower than No. 2 Motorola [NYSE: MOT] as well as Samsung and Siemens, Nokia
sold a record number of units--46 million--in the fourth quarter, good for its
best-ever market share of 39 percent.
Motorola increased its share by 13.1 percent primarily because of its portfolio
of low-end handset models. Its fourth-quarter market share increased by 19
percent, with major gains in North America and Latin America. Motorola continued
to be the market share leader in China, while gaining co-leadership in U.S.
market share in the with Nokia.
Meanwhile, Sony Ericsson's numbers dropped 17.9 percent from 27.9 million units
shipped in 2001 to 22.9 million in 2002. Research by Strategy Analytics'
Wireless Device Strategies Services indicates that Sony Ericsson doesn't rate
among the top mobile phone vendors for profitability strategies in U.S. sales.
The company offers fewer models than most of its competitors in the United
States because it is focusing instead on offering models for all digital
interfaces. In addition, the venture has been slow in getting new products to
market.
The latest funding from the parent companies came after each hinted in the
second half of 2002 that they were unlikely to target additional funding for
their venture. Sony Ericsson needs another 16 months to 20 months "to achieve
profitability with this strategy, and it is doubtful whether both partners of
the joint venture have the commitment and resources to endure," Strategy
Analytics predicts.
>>Naqi Jaffery, Telecom Trends International, njaffery@telecomtrends.net; Chris
Ambrosio, Strategy Analytics, cambrosio@strategyanalytics.com.<<
2002 Worldwide Handset Sales (millions of units)
Company 2002 Market 2001 Market Growth
Sales Share Sales Share Rate
Nokia 152 37.50% 139.9 36.80% 8.60%
Motorola 70.9 17.50% 62.7 16.50% 13.10%
Samsung 40 9.90% 29.6 7.80% 35.10%
Siemens 35.3 8.70% 28.4 7.50% 24.30%
Sony Ericsson 22.9 5.70% 27.9 7.30% -17.90%
Others 83.9 20.70% 91.5 24.10% -8.30%
Total 405 100% 380 100% 6.60%
Source: Telecom Trends International
[Copyright 2003 PBI Media, LLC. All rights reserved.]
Wireless Data News, Vol. 11, No. 3 [Copyright 2003 PBI Media, LLC. All rights
reserved.]
Copyright 2003 PBI Media, LLC. All rights reserved.
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