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Thursday, October 20, 2005 9:04:48 AM
http://www.cellular-news.com/story/14442.php
BERLIN -(Dow Jones)- Market research firm GfK said the European handset market has delivered 10% growth in the third quarter, with a phone from Sony Ericsson proving the hottest sell in the period.
In the third quarter each of the last three years, the European cell phone market was ignited by color, camera, and third-generation wireless technology. But not this year.
The third-quarter's hottest global system for mobile communications, or GSM, phone is a reheated block phone from Sony Ericsson, the K750i. The top third-generation phone based on the WCDMA standard is Nokia Corp.'s (NOK) relatively ancient first-quarter launch, the 6680.
Still, at 10% sequential unit growth, Europe outpaced other big geographies in the quarter, and this global rebalancing generates a positive average selling price vector for the industry.
The third-quarter's only significant technical development is the dominance of 90 nanometer circuitry in WCDMA baseband chipsets, which lengthens battery life by 40%. Tom Dailey, managing director of GfK Equity Research, said Nokia's six-month jump on Qualcomm Inc.'s (QCOM) MSM 6250 chipset paid off: while Qualcomm doubled its WCDMA baseband share to 14%, the Nokia/Texas Instruments Inc. (TXN) team still leads by a wide margin.
In the fourth quarter, the 95 gram Samsung Electronics Co. Ltd. (005930.SE) Z500 (with Qualcomm chipset) is the first 3G phone to feel like a 2G phone - it's a proven form factor and is 50% lighter than leading 3G phones, so we think it will ramp nicely through year-end, Dailey said.
The quarter's other winners include Sony Ericsson, a joint venture of Sweden's Telefon AB LM Ericsson (ERICY) and Japan's Sony Corp. (SNE), which gained over 200 basis points of European GSM share and then late in the quarter launched two segment-killers: the W800 music phone, and its first 3G offering with the new Ericsson mobile platforms chipset, the K600 series. Elsewhere in GSM, Nokia gained 200 basis points of share in the Middle East.
Lackluster WCDMA sales increased 11% sequentially, but GfK was encouraged by what was being sold, and by who was selling it. "Some pivotal 2G operators have warmed to 3G, and at the same time, we've seen less price-driven selling. It means that after 30 months of 3G in Europe, the phones are finally good enough to pull demand," Dailey said.
The decline of the CDMA and PHS standards in China continues to feed GSM sales, which are growing at nearly 30% year-over-year. The biggest beneficiary of the trend is Nokia, which has a tiny position in the former two but has surged in GSM.
Lu Wang, GfK China analyst, said: "Nokia's renewed distribution strategy has revived their fortunes, and they have been on a share-gaining streak all year." Low-end phones did particularly well, which is terrific news for Texas Instruments, which gained significant share by via chipsets in both Nokia and Motorola Inc.'s (MOT) key low-end phones.
(END) Dow Jones Newswires
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