Mobile phone sales have increased by 17% over the past year according to Gartner, Inc. In the first quarter of last year, 153.7 million units were sold. That was the record high for mobile phone sales.
However, that record was shattered in the first quarter of this year. 180.6 million units were sold as sales of mobile phones grew in every region around the world.
“In the mature markets of Western Europe and North America replacement sales ensured a buoyant performance,” said Gartner vice president for mobile terminals research, Ben Wood. “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, said Wood.
Though Nokia’s performance in North America was poor, its market share grew thanks to sales in other regions. “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.
According to a press release issued by 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 sales climbed, especially 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.
Siemens didn’t have the best luck in the first 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.
Gartner has increased its estimates for worldwide sales based on the first quarter results. Gartner now projects worldwide mobile phone sales in 2005 will approach 750 million units, a 13% increase from 2004. Gartner had previously forecast sales of 720 million units.
“More phones are being sold, but profit margins are shrinking,” said Wood. “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.”
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
