TELECOMS & MOBILE
Mobile shipments set to grow: IDC
05-09-2003
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Worldwide mobile phone shipments will surpass 500 million units for the first time ever in 2004, according to IDC's latest report.
This year's growth in mobile handset shipments is expected to exceed 460 million units, and 8 percent year-on-year growth in handset sales is expected for 2004, driven by sales of 3G handsets and cameraphones, according to the research company.
IDC's latest report, "Worldwide Mobile Phone Forecast and Analysis Report, 2003 - 2007," estimates that there will be close to 1.4 billion individual mobile phone users worldwide in 2004. With this volume of usage, the company expects 42 percent year-on-year growth in the 2.5G market, translating into shipments of over 241 million units.
Some analysts are sceptical about the extent and impact that 3G handsets will have in the market in the short term, but IDC's predictions are optimistic, forecasting growth in 3G mobile phone shipments of 140 percent, to over 48 million units, in 2004.
"After years of 3G promises, the pieces -- the handsets, the features and applications, the bandwidth, and the networks -- are starting to come together to make next generation wireless a reality," said Alex Slawsby, analyst in IDC's Mobile Devices program.
A key factor driving this growth, according to IDC, is the increasing popularity of cameraphones, expected to grow by 64 percent next year, to almost 100 million units.
Meanwhile, so-called smartphones -- converged mobile devices that combine voice functions with advanced data applications -- are also driving the market. The report predicts that sales of smartphones will grow by 111 percent, to nearly 30 million units, in 2004.
Despite this positive outlook, an examination of mobile phone markets region by region shows that all is not so rosy. Analysis of the past few quarters indicates that the take-up of smartphones in the US is slow, and this could affect growth in that segment.
Problems in China, the biggest mobile phone market, could also set worldwide handset growth back. Gartner, which released second quarter results for the mobile phone market this week, predicted big troubles for China, where over 35 handset makers are competing for the top spot or a strong foothold in the market.
With excessive inventory as a result of the SARS crisis, manufacturers in the region may have to slow production and continue to cut prices. Many local phone makers will be forced to abandon the market altogether, according to Ann Liang, analyst with the mobile communications group for Gartner in Asia/Pacific.
Motorola, the market leader in China, was hardest hit by the crisis, with sales down on last year and its share of the global market falling to 14.6 percent, from 17 percent a year earlier. Reflecting this impact, Motorola lowered its second quarter sales forecasts to between USD6 billion and USD6.2 billion, from earlier estimates of USD6.4 billion to USD6.6 billion. In addition, the mobile phone company said earnings before special items would breakeven, compared to an earlier forecast of earnings of USD0.03 to USD0.05 a share.
Despite the ripple effect that these blips could have into 2004, Slawsby remains convinced of positive growth levels. "Enticed by new form factors, expanded features and capabilities, and falling prices, consumers are poised to begin a prolonged replacement cycle by upgrading to next-generation phones," he said. "This, combined with new demand from emerging markets, will sustain handset growth for much of the forecast period."
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