Emerging mobile markets growing strongly

28-07-2005

by Charlie Taylor

The number of mobile phones shipped during the second quarter of 2005 came to 188 million, representing an annual growth rate of 18 percent.

That's according to new data released by Strategy Analytics which revealed that the second quarter out-performed the previous three-month period when growth was 10 percent. However, back in the second quarter of 2004 annual growth was 40 percent.

A total of 361 million handsets were shipped during the first half of 2005 and, Strategy Analytics is now forecasting that full-year shipments will total 775 million.

South America saw a swell in demand for handsets during the quarter with Central and Eastern Europe, as well as Africa also seeing strong growth in shipments. Japan stood out as a weak link during the three-month period; it experienced negative single-digit growth during the quarter.

Between them mobile phone giants Nokia and Motorola now control 50 percent of the market, which means that more than 60 other mobile manufacturers are left to battle for the remaining 50 percent share.

Motorola had an impressive quarter, growing shipments 41 percent year-over-year and widening its lead over Samsung for the third consecutive quarter.

Finnish giant Nokia continued its recovery from a relatively unstable 2004, due to continued dominance in developing GSM markets such as Africa. The company grew shipments by approximately 34 percent compared to the same period last year.

Samsung posted a disappointing 7 percent year-over-year growth. The mobile maker has a narrow range of entry-level handsets which is limiting its ability to target expanding countries such as Brazil and India.

Meanwhile, LG increased volume by an above-average 22 percent year-over-year; however, this was someway below the 88 percent rate seen in the second quarter of 2004. Slow-moving CDMA and UMTS markets worldwide, where LG is traditionally strong, stunted its overall growth during the first half of 2005. Despite this, LG continued to hold its fourth place in the global market for the fourth consecutive quarter.

Sony Ericsson experienced healthy demand for high-end models such as the K750 multi-megapixel camera phone. A range of new handsets targeting the high-end market helped it to stabilise market share at 6 percent following a poor first quarter.

Siemens' sell-in fell 19 percent annually during the second quarter, as it came under continued pressure from Nokia, Motorola and others in the EMEA region.

Strategy Analytics says that with growth concentrated in emerging markets, where low handset prices are a critical driver, handset makers without a wide product range are facing difficult times.

This effect has been most profound on LG and Samsung in the second quarter, with each suffering significant negative impact on their profits as they attempt to establish and maintain an effective balance of handsets across the various price-tiers.