Handset shipments rising steadily: IDC
16-05-2006
by Ciara O'Brien

Mobile phone shipments are keeping up their steady growth in Western Europe, growing 11 percent year-on-year in the first quarter of 2006.

According to new figures from research house IDC, shipments in Western Europe reached 40.7 million units in the quarter, compared with 36.8 million in the same period a year earlier.

"Although mounting saturation in subscriber growth across Europe is increasingly inhibiting handset shipment growth, the market in Q1 2006 matched the growth rate exhibited in the opening quarter of 2005, despite a lack of impetus commonly provided by new handset launches," said Geoff Blaber, senior research analyst, European Mobile Devices, IDC.

However, mobile handset vendors are seeing their profit margins squeezed as competition heats up. According to IDC, the top three vendors -- Nokia, Motorola and Samsung -- now account for almost 70 percent of all traditional mobile phones shipped; this compares with 62 percent in 2005. This increase can be partly attributed to an increasing scrutiny of handset portfolios by operators, certain demands for software and hardware customisation, and design across a range of handsets.

"Such vendors need to focus R&D towards operator requirements by integrating such components to produce closely positioned products that serve very specific segments," said Andrew Brown, program manager, European Mobile Devices, IDC.

Converged devices are also rising in popularity, increasing their share of the total market to 7 percent during the quarter, up from 5 percent in the same quarter of 2005. However, IDC also noted "disappointing" converged device market growth of 43 percent year-on-year as a number of vendors went through portfolio transitions and a general lack of new device releases impacted the market.

IDC is expecting things to improve during 2006, however, as technology and design improve. "Consequently, IDC forecasts total mobile phone market growth of just under 10 percent, with shipments expected to exceed 185 million units," said Jean-Philippe Bouchard, senior research analyst, European Mobile Devices, IDC.

In April, Strategy Analytics said that the number of mobile phones shipped worldwide rose by 31 percent during the first quarter of 2006. On a global scale, 229 million mobile phones were shipped during the quarter, the first time that sales have passed the 200 million mark in the opening quarter of the year.

Strategy Analytics estimated that shipments for the year would reach 1 billion, up 22 percent on the previous year.