Fashion and features drive mobile sales
06-11-2003
by Ciaran Buckley

The demand for mobile phones has moved into the middle market, both in mature and developing markets, as fashion and features drive the current upgrade cycle.

According to IDC's quarterly review, worldwide mobile phone shipments are up over 21 percent year-on-year. Mobile phone shipments have also grown 14 percent since the last quarter, to 130 million units.

"It's no surprise that shipments have risen to this degree, because we're in a renewal cycle, it's time for people to update their devices," said Tim Mui, senior analyst at IDC speaking to ElectricNews.Net. "We are at the beginning of the upgrade cycle and we expect it to continue in 2004."

According to Mui, people who are primarily interested in mobile phones as a means to making voice calls have been drawn into the upgrade cycle as traditionally low-end phone providers such as Siemens, Sony Ericsson and Trium have released more full-featured phones.

The demand for full-featured phones is affecting all global markets, including China, which had previously been seen as a destination for low-end phones. According to Mui, Chinese consumers have become quite fashion conscious and he expected the regional demand to be driven by mid-market phones. China and South America are two regions expected to drive demand in 2004, while demand in Western Europe is expected to be flat.

Market leaders Nokia, best known for its high-end phone offerings, have retained their number one slot. Nokia is followed by Motorola, Samsung, Siemens and LG Electronics. Sony Ericsson came in behind LG Electronics.

The top five mobile phone vendors continued to gain back market share after a dip in the first quarter of 2003. After dropping from 77 percent at the end of 2002 to 71 percent in the first quarter of 2003, the top five vendors now have almost 77 percent of the market.