Slowdown impacts global mobile sales

25 Aug 2006

Global sales of mobile phones are slowing, new research from Gartner reveals. Sales increased 18.3pc in the second quarter, compared with a 23.8pc increase in the first quarter.

The analyst firm claimed, however, that despite the slight slowdown it forecasts mobile phone sales are still on track to reach 960 million units in 2006 with sales of 238 million units forecast for the third quarter.

Carolina Milanesi, principal analyst for mobile terminals research at Gartner, said mobile operators in the mature markets of western Europe and North America struggled to maintain the customer acquisition growth levels seen in previous quarters.

“But mobile operators in emerging markets continued to sign new customers driving handsets sales,” she observed.

Leading vendors Nokia and Motorola both grew their market share and accounted for more than half of the worldwide mobile phone sales in the second quarter of 2006.

Nokia maintained its No 1 position with a 33.6pc market share, gaining two percentage points compared to the same period last year. Gartner stated that as Nokia starts to ship more feature-rich phones, such as the N72 and N73, in the third quarter of 2006 it needs to ensure that it can also cater for users who put fashion ahead of functionality and are looking for thin products.

“Motorola is the big winner this quarter,” Milanesi said. “The company achieved a market share of 21.9pc, growing its market share by 4.2pc year on year, the highest growth this quarter. Motorola maintained its lead in North America and latin America and its No 2 position in other markets.”

With the MotoFone, KRZR and RIZR mobile phones due to ship from the third quarter of this year, Gartner said Motorola should be able to continue to gain market share in both emerging and mature markets.

Samsung retained its No 3 position but lost market share compared to the top two players. Sales reached 25.5 million units in the second quarter, approximately half of Motorola’s total sales this quarter. Lower sales in the home market coupled with weaker-than-expected demand in some key markets in Asia Pacific explained Samsung’s weaker performance. To grow market share in mature markets such as western Europe and North America, Gartner said Samsung needs to match its high feature set with a more distinctive design.

Sony Ericsson regained the No 4 position with sales reaching 15.3 million units. “Sony Ericsson’s bet on music and imaging continued to pay back. One quarter of its sales came from the Walkman branded devices and the first Cybershot phone k800 was also well received by consumers,” said Milanesi.

Despite the success of the KG800 Chocolate phone, LG lost 0.4pc market share year on year and slipped into fifth place.

“Although The Chocolate phone sold very well and helped to increase LG’s brand awareness globally, ‘one swallow does not a summer make’. LG needs to bring to market more products from the Black Label series, including a 3G offering, to win back and hold the fourth position,” Milanesi added.

By John Kennedy