Phone shipments near all-time high

25-08-2005

by Deirdre McArdle

Around 190 million mobile phones were sold worldwide during the second quarter of 2005, making it the second strongest quarter on record.

That's according to research firm Gartner, which said that sales rose by 21.6 percent from the year-ago quarter. Growth was evident in both maturing and emerging markets as demand for replacement handsets, as well as handsets for first-time buyers, continued to rise.

Industry giants Nokia and Motorola continued to strengthen their dominant positions, controlling 49.8 percent of the market between them. Nokia shipped over 60 million handsets worldwide, up from just over 45 million in the year ago quarter. The Finnish giant's market share also increased year-on-year to 31.9 percent from 29.6 percent in 2004.

Meanwhile, Motorola shipped 34 million phones, some 10 million more than it did in the second quarter of 2004. It now controls 17.9 percent of the market, compared to 15.7 percent a year ago. The US mobile phone manufacturer managed to significantly improve its standing in the Western European market claiming the second spot compared to fifth position in the same quarter in 2004. Rounding off the vendor table are Samsung, LG, Sony Ericsson and Siemens.

All regions except Japan performed well during the quarter. In the mature markets of Western Europe and US, sales of mobile phones reached 37.4 million units and 35.5 million respectively. Meanwhile, the developing markets of Eastern Europe, the Middle East and Africa, and Latin America saw phone shipments grow by 37 percent and 50 percent respectively.

"The sales in the mature markets of Western Europe and North America were driven primarily by sales of phones as replacements for older models and, to a lesser extent, by first-time buyers," said Carolina Milanesi, principal analyst for mobile terminals research at Gartner. "In the emerging markets growth was boosted by an uptake in new connections as consumers took advantage of falling average selling prices of mobile phones."

In Asia/Pacific (excluding Japan), sales reached around 48.3 million units in the quarter, up 27.5 percent from the second quarter of 2004. Gartner cited strong demand for handsets in the emerging markets of China, India, Bangladesh and Vietnam as the primary reason for the good performance in the region.

Meanwhile, in Japan sales of mobile phones were down from 10.6 million in the second quarter of 2004 to 10 million in 2005. "Features such as music players and fully fledged Web browsers helped replacement sales, but it wasn't enough for the market's overall performance to match last year's results," said Nahoko Mitsuyama, principal analyst for mobile communications for Gartner.

The strong performance of the global mobile phone market in the second quarter prompted Gartner to reinforce its predictions that 780 million mobile phones will ship by the end of 2005.