Big six dominate expanding mobile phone market

28-02-2006

by The Register

Mobile phone sales totalled 816.6 million units in 2005, a 21 percent increase from 2004.

The big six mobile vendors -- Nokia, Motorola, Samsung, LG, Sony Ericsson and Siemens -- increased their share as a group during the year to control 79.4 percent of the market at the expense of smaller suppliers, according to market analyst firm Gartner Dataquest.

The big six experienced a steady increase in market share during 2005, with their dominance increasing from 78 percent in the first quarter of 2005 to 84 percent in the fourth quarter of 2005.

"As competition continues to drive price pressure in the low-end, and a design and technology 'arms race' in the high-end, the survival of the fittest depends more and more on economies of scales, or very carefully cut-out niche markets," Carolina Milanesi, principal analyst for mobile terminals research at Gartner said.

During the last three months of 2005, more than 235 million mobile phone units were sold, the biggest quarter on record since 2001. Demand in emerging markets and falling subscription rates in more developed economies helped boost sales. In more mature markets, such as Western Europe and North America, replacement sales were also a significant growth factor.

Nokia upped its share to 35 percent in the fourth quarter of 2005 from 33 percent in the fourth quarter of 2004. Motorola consolidated its position in second spot by moving up from 16.3 percent to 17.8 percent while Samsung sales were flat at 12.1 percent (12.2 percent, fourth quarter of 2004). LG (7.2 percent) and Sony Ericsson (6.9 percent) both increased their slice of the market. BenQ dropped back from 6.5 percent in the fourth quarter of 2004 to 4.7 percent in the fourth quarter of 2005.

After a difficult 2004, Nokia rebounded with products such as the 6680, the 8800 and the N70 3G handset to achieve a market share in Europe and Asia that's more than double that of its nearest competitor. Motorola also did well with just under 42 million units in the fourth quarter of 2005, allowing it to retain the number two spot in Western Europe and worldwide, while displacing Samsung from second berth in Asia Pacific.

Samsung remained in the third position in the fourth quarter of 2005 with sales totalling 28.4 million units. For 2005, its market share remained static at 12.7 percent. This is mainly due to Samsung favouring margins over market share and the decision not to enter the price war in emerging markets.

Closer to home, sales of mobile phones in Western Europe hit 49.1 million units in the fourth quarter of 2005 and 164 million units in 2005. Many consumers took advantage of Christmas promotions and upgraded their phones to newer, trendier varieties.

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