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Double-digit growth for mobile phones

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Worldwide sales of mobile phones reached 294-3-million units in the first quarter of 2008, a 13,6% increase over the first quarter of 2007, despite a European slump. 

According to Gartner, sales of mobile phones in Western Europe decreased 16,4% from the first quarter of 2007, the first decline in this region since Gartner began tracking the mobile devices market in 2001.
"While sales in emerging markets continued to be driven by strong net new subscribers' growth, mature markets felt the pressure of an uncertain economic environment," says Carolina Milanesi, research director for mobile devices at Gartner. "Sales of high-end devices in particular were lower as consumers turned to mid-tier devices when looking to upgrade their old phones.
"Phone manufacturers should strengthen their mid-tier offerings in order to cater to those users that might be reticent to invest too much money in replacing their old phones when the economic environment remains challenging."
Nokia sold 115,2-million mobile phones in the first quarter of 2008, as its market share slipped slightly to 39,1%. Nokia was able to maintain market leadership thanks to the richness of its portfolio, which appeals to users in both emerging and mature markets. Sales in the ultra-low-cost segment remained strong due to Nokia's distribution strategy, economies of scale and brand power.
However, competition in this segment and at the high end is increasing. To stay ahead, Nokia will have to continue to integrate new technologies in its handsets and improve usability and design.
Samsung maintained its momentum in the first quarter of 2008 with sales reaching 42,4-million units. The South Korean vendor not only held on to its number two position worldwide, but it also widened the gap from third-placed Motorola as its market share grew to 14,4%. Samsung is reacting quickly to the focus on touch-screen devices.
"Samsung's choice to be a quick follower has paid off so far, but it needs to focus on diversifying its designs and strengthening its lower-end portfolio to increase sales in emerging markets," says Milanesi.
Motorola carried the problems it had in 2007 through to the first quarter of 2008 and sales fell to 29,9-million units. The US manufacturer continues to struggle in finding the successor to its popular Razr. Although it introduced new models, its portfolio is simply not competitive enough.
Milanesi comments: "Motorola is unlikely to introduce many products in the second half of 2008, a time when most competitors will bring new additions to the market, so it stands little chance of winning back its number two position. It may even have to watch out for a threat from current number four player LG."
LG had an excellent start to 2008 with sales reaching 23,6-million units and a market share of 8%. As a result, LG overtook Sony Ericsson to become the number four vendor worldwide. With a strengthened portfolio, LG capitalised on the attention the market has given to touch-screen devices since the launch of the Apple iPhone.
Although the LG Prada, Shine and KF600 models have proved popular, LG must remember that touch-screen phones do not appeal to everyone. The South Korean vendor needs to build a stronger smartphone portfolio, as consumers and operators have started to place more emphasis on this market segment.
Sony Ericsson was another vendor that had a difficult start to 2008. Its sales reached 22,1-million units, but this was not enough to hold on to the number four spot. Sony Ericsson attributed these weak results to the difficult conditions in the Western European market, which experienced some softness in the high-end segment.
With new products for the second half of 2008 and with a stronger mid-tier portfolio, Sony Ericsson is in a good position to win back its fourth place in the market share rankings.
Sales in the Eastern Europe, the Middle East and Africa region reached 56,4-million units, which represented a 25,8% increase year-on-year.