Record First Quarter For Mobile Providers

The US-based research firm calculates that sales totalled 112.7 million units, up from 93.8 million units in Q1 2002 (see Worldwide Mobile Phone Sales Dipped in Q1). This reflected high replacement demand in the three months to March 31 and follows the encouraging 6% rise recorded in 2002 (see Forecasts). The latest figures exceeded the expectations of handset manufacturers and have raised hopes of double-digit growth for the full year.

“The mobile handset industry rode the crest of a wave of robust replacement demand to realise record levels of sales to end-users for the first quarter,” said Bryan Prohm, senior analyst with the mobile communications worldwide research group for Gartner. “Significant demand was recorded across all geographical regions during the quarter, and annualised sales trends based on these results suggests the market could be on pace for a double-digit rate increase for the full calendar year.”

The industry leader Nokia saw sales increase by over a fifth to 39.5 million and its share of the market remains steady at 34%. Meanwhile, Samsung saw the most significant growth with unit sales up by more than a third to 11.9 million. However, Gartner has expressed concern at the sheer number of suppliers trying to compete in the mobile sector.

There are now more than 100 manufacturers vying for customers in the global market and fears abound that a price war will lead to downward pressure on average costs for mobile terminals.

Worldwide Mobile Terminal Sales Estimates
	Q1 2002		Q1 2003
Company	Units (m)	Market Share (%)	Units (m)	Market Share (%)	Growth (%)
Nokia	32.6	34.2	39.5	35.0	20.9
Motorola	16.8	17.6	16.6	14.7	-2.4
Samsung	8.9	9.3	11.9	10.5	33.6
Siemens	8.1	8.5	8.6	7.6	5.7
Sony Ericsson	6.0	6.3	5.4	4.8	-20.3
Others	22.9	24.0	30.8	27.3	34.6
Total	95.3	100.0	112.7	100.0	18.2
Source: Gartner Dataquest, June 2003

Year-end prognosis The outlook for the rest of the year looks bright given that state-of-the art devices are due on the market with a variety of features including gaming, music and video (see ‘Smart’ Phones To Shake Up Mobile Sector, Says Analysys).

In 2003, an explosion in the availability of colour screen and camera phones is expected in mature markets, such as Western Europe, and we predict that many customers will be tempted to replace their existing mobile terminals,” said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. “Photo messaging, which Gartner terms disposable photography, is expected to be the cornerstone service in mobile network operators’ marketing campaigns throughout the year.

Wood does warn that the majority of worldwide sales will remain in the low-tier, low-function segment and the latest results could be overtaken by events in the Far East.

“There is a deepening inventory predicament in China, and there is the economic impact of severe acute respiratory syndrome (SARS) in the Asia/Pacific region and beyond,” said Ann Liang, industry analyst with the mobile communications group for Gartner in Asia/Pacific. “Clearly, then, any optimism should be met with an equal measure of prudence.”