European mobile market struggles, says IDC

8 Sep 2003

Reduced levels of phone renewals and new subscribers have led to a slow second quarter of 2003 for the European mobile market. The mobile industry is facing the reality that a market driven by mobile phone replacements is tougher than one driven by new subscribers, says research house IDC.

During the quarter, Nokia retained the lead and the only European phone manufacturer to grow market share, with a 53.4c market share up 3.7pc, ahead of Siemens with 13.2pc market share, a decline of 3.3pc, and Sony Ericsson with 8.8pc market share, a dramatic 20.4pc drop in growth.

According to IDC, Nokia’s success was ensured by its presence and innovation at all price points and effective targeting of its end-user base. As well as Siemens and Sony Ericsson, Motorola and other manufacturers all reported a fall in growth. The only other phone manufacturer to buck the trend was Samsung, which grew 4.5pc to have a 4.7pc share of the European mobile market.

“Although leading vendors have become increasingly adept at lowering their cost base and targeting end users, increasing saturation means that new technologies are failing to stimulate greater demand among new subscribers for mobile phones in Europe, in what has essentially become a highly competitive renewal market,” commented Andrew Brown, program manager for European mobile devices at IDC.

The volumes of 3G handsets shipping remained relatively low during the second quarter of 2003, accounting for just over 1pc of all mobile phones shipped in western Europe. NEC is the only vendor shipping in significant volumes.

“Since the hype, and subsequent disappointments, of 3G several years ago, the handsets, features, applications, bandwidth and networks have been built up to what can now be considered a realistic platform for next-generation wireless technology to perform on,” said Matthew Dunn, research analyst for European mobile devices at IDC. “Handset growth should be driven by next-generation phones, which feature-hungry consumers are likely to include in their upgrade plans when the benefits are proven to them.”

By John Kennedy