Mobile shipments continue to flourish
20-07-2006
by Maxim Kelly

On average, more than 2.5 million mobile phones were shipped every day during the second quarter of 2006.

Figures from researchers at Strategy Analytics show an annual industry growth rate of 26 percent based on 235 million handsets shipped during the three-month period.

Market leaders Nokia, Motorola and Sony Ericsson all reported that new products played a critical role in driving volumes and profits during the quarter, and Strategy Analytics is maintaining its forecast of 1 billion units to be shipped for the full year. The prediction relies on the fact that so far no phone vendors are reporting noticeable inventory build-ups or slackening demand across a broad number of markets.

Nokia shipped a third of all handsets during the quarter: 78 million units. This is a 29 percent year-on-year increase in shipments for the Finnish company.

Motorola grew its shipments 53 percent year-on-year, selling 52 million units. Its global market share of 22 percent is at its highest level since 1998. Researchers at Strategy Analytics predict Motorola could overtake Nokia as the world's largest mobile phone company by 2007 if the two firms continue growing at their present pace.

Third-placed Sony Ericsson saw improvements in shipments, revenues and profits, and benefited from marked improvements in getting its new line of Walkman-branded models onto the market during the second quarter.

In contrast, Samsung launched its new products late in the last quarter, leading it to register its market share at half that of Motorola's. The manufacturer's 8 percent annual growth is marginal; analysts reported that Samsung is continuing to miss out on the boom in low-spec handsets in developing markets, which could offset losses in the high-tech sphere to the Motorola Razr and Sony Ericsson Walkman line.

LG increased volume by an above-average 26 percent year-over-year during the second quarter of 2006, due in part to strong demand for its new Chocolate range of products. Strategy Analytics reckons LG faces a breakeven-to-negative operating-margin reality over the next four to six quarters as it races to build scale in export markets. Overall, LG recorded its second consecutive quarterly operating loss with noted weaknesses in Korea and North America, according to Strategy Analytics.