The mobile phone industry had a record first quarter with worldwide sales totaling 180.6 million units, a 17 percent increase from the first quarter of 2004, according to Gartner, Inc. The previous high for mobile phone sales was 153.7 million units in the first quarter of 2004. Gartner analysts said mobile phone sales grew in all regions.
“In the mature markets of Western Europe and North America replacement sales ensured a buoyant performance,” said Ben Wood, research vice president for mobile terminals research at Gartner.
“The Asia/Pacific region reflected seasonal trends by virtue of strong sales associated with Chinese New Year and other festivals.” In addition, rapid growth in emerging markets, notably Eastern Europe, Middle East and Africa and Latin America, further bolstered global sales, he said.
Nokia’s market share grew (see Table) despite poor performance in North America. “The company did particularly well in Asia/Pacific, especially in mainland China where aggressive pricing, significant investments in marketing and its distribution network delivered sales of more than 5.6 million units,” said Ann Liang, principal analyst for mobile terminals in Asia Pacific at Gartner.
Motorola continued its strong performance with global mobile phone sales of 30.3 million units. Gartner analysts said the company’s success was based on a strengthening brand (built largely on the success of its RAZR V3 phone) and improved relationships with network operators.
“Motorola must now work hard in 2005 to grow its market share further without sacrificing margins too dramatically, particularly given its commitment to supply ultra low-tier products,” Mr. Wood said.
Samsung increased its sales, doing especially well in Western Europe. Samsung also recorded strong sales in Russia, while price reductions helped it elsewhere in the region. Rival LG did well in North America thanks to sales of its code division multiple access (CDMA) phones.
Table 1
Worldwide Mobile Terminal Sales to End-Users in 1Q05 (thousands of units)
1Q05 Market 1Q04 Market Company 1Q05 Sales Share (%) 1Q04 Sales Share (%) Nokia 54.943.1 30.4 44,259.1 28.8 Motorola 30,293.6 16.8 25,111.0 16.3 Samsung 24,099.0 13.3 19,362.5 12.6 LG 11,138.6 6.2 8,210.0 5.3 Siemens 9,942.7 5.5 12,285.8 8.0 Sony Ericsson 9,900.0 5.5 8,638.6 5.6 Others 40,293.0 22.3 35,879.9 23.4 Total 180,610.0 100.0 153,746.9 100.0 Note* This table excludes ODM to OEM shipments. source: Gartner Dataset (May 2005)
Siemens had a difficult quarter, as its market share slipped to its lowest level since 1999. “The uncertainty about the future of Siemens’ business has hurt it as network operators and key channels lose confidence in the company and its products,” Mr. Wood said.
Based on the first quarter results, Gartner has increased its estimates for worldwide sales. Gartner now projects worldwide mobile phone sales in 2005 will approach 750 million units, a 13 percent increase from 2004. Gartner had previously forecast sales of 720 million units.
“More phones are being sold, but profit margins are shrinking,” Mr. Wood said. “This is because consumers in emerging markets want cheap handsets, and competition in more-developed markets keeps prices low. Smaller manufacturers will feel the pressure, and many of them are already struggling to stay profitable. We expect some of them to be bought out, and a few will choose to leave the mobile phone market completely.”
source: http://news.softpedia.com/news/Gartner-Says-Mobile-Phone-Sales-Rose-17-Percent-in-Q1-2005-2276.shtml 5jun2005
Sales of mobile phones broke records in the first quarter of 2005, with the likes of Motorola and Nokia enjoying the ride. But the period also put a strain on some of the smaller manufacturers.
According to the latest statistics from Gartner, sales grew by 17 percent to a record total of 180.6 million units on a year-over-year basis. The previous high came during the first quarter of 2004 when sales hit 153.7 million units.
As a result of the 2005 first-quarter total, Gartner has upped its forecast estimates for total 2005 sales from 720 million to 750 million units. The revised total represents a 13 percent increase over the 2004 total.
The big winners are Nokia, Motorola, Samsung and LG, all of which grew their respective shares of the market.
Nokia remains the global leader, with 30.4 percent market share in the first quarter this year, up from 28.8 percent the year before. Gartner noted that Nokia's share grew despite its poor performance in North America.
"More phones are being sold, but profit margins are shrinking," Ben Wood, research vice president for mobile terminals research at Gartner, said in a statement. "This is because consumers in emerging markets want cheap handsets, and competition in more developed markets keeps prices low.
Motorola increased its share from 16.3 percent a year ago to 16.8 percent; Samsung grew to 13.3 percent from 12.6 percent; and LG hit 6.2 percent up from 5.3 percent a year ago.
The picture wasn't rosy for everyone, though, with Siemens and Sony Ericsson losing market share. According to Gartner, Siemens' first-quarter 2005 result of 5.5 percent market share, down from 8 percent, was the lowest level reported for Siemens since 1999.
"Smaller manufacturers will feel the pressure, and many of them are already struggling to stay profitable," said Wood. "We expect some of them to be bought out, and a few will choose to leave the mobile phone market completely."
source: http://www.internetnews.com/stats/article.php/3507711 5jun2005
Mobile-phone sales continued at a torrid pace in the first quarter as consumers worldwide latched on to camera phones and cheap deals, according to a new report.
The industry reported that 180.6 million units were sold in the first quarter of this year, a 17 percent increase from the same period a year ago. That continued a buying boom that began two years ago and really took hold last year, according to market research firm Gartner Inc. The new figures prompted Gartner to revise its mobile-phone sales estimates up to 750 million units from 720 million for 2005.
Still, industry analysts predict a cooling-off trend as some of the emerging markets in China and elsewhere stabilize while existing mature markets in North America and Europe slow down after a recent frenzy in phone replacement sales.
"We saw a big upgrade cycle in 2004 and now a lot of people have the latest and greatest phone, so it will take some real new features to stimulate demand again," said Chris Sessing, an analyst with Crowell, Weedon & Co. "It's not going to happen over night, but we really will have slower growth by the end of this year."
As the pace of growth slows, profit margins are also shrinking, said Ben Wood, Gartner's vice president for mobile gear, in a statement. He said emerging markets are demanding cheaper phones while competition in existing markets are keeping prices low.
The lower profit margins will affect smaller players the most and have little impact on large cell phone manufacturers.
Finland's Nokia remains the world's largest manufacturer with an estimated 30.4 percent of the market in the first quarter. Motorola was second with 16.8 percent, Samsung third at 13.3 percent and LG fourth at 6.2 percent. Fifth-place Siemens, which has been losing market share, captured just 5.5 percent of the market.
Most companies enjoyed a banner year in 2004, in which 674 million units were sold, a surge of 30 percent over the previous year. Industry watchers attributed the spike to a host of factors.
Analysts said phone operators were eager to cut deals to get customers on to their newly expanded networks. Additional phone features like cameras and color screens became must-haves for users, prompting many to upgrade their aging phones. And increased demand in emerging markets from Russia, Latin America and Asia helped spur on an unprecedented period of growth.
"Last year was just remarkable," said John Jackson, an analyst with the Yankee Group. "Virtually every industry watcher had their expectations and the market proved us conservative."
Jackson agrees the industry will not be able to keep up the pace it set recently. Cell phone companies will be looking to increase profitability and perhaps roll back phone subsidies after years of practically giving away phones to establish market share. And some markets like the large cities in China are nearly saturated and are quickly becoming markets for replacement phones.
"We expect this to continue to slow down through the end of 2005," said Sessing. "You will still have emerging markets growing rapidly, but it's still relatively small numbers compared to the larger markets."
Cell phone sales
Year 2001 2002 2003 2004 2005
Units sold in millions 400 423 520 674 750*
% change from previous year -3.2 6 20.5 30 13*.
*estimated
source: http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/05/28/BUGV4CVUVP1.DTL&type=printable 5jun2005
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