Western Europe mobile sales decline for first time

28 May 2008

Mobile phone sales globally grew almost 14pc in the first quarter of 2008 over the same quarter a year ago, analyst firm Gartner has said. However, western Europe showed a decline in sales for the first time.

Gartner’s research found that 294.3 million phones were sold in Q108, a 13.5pc increase over Q107.

The increase was driven by sales in emerging markets as western Europe showed a decline in sales for the first time since Gartner began tracking sales in 2001. In total, western Europe sales declined by 16.4pc over Q107.

“While sales in emerging markets continued to be driven by strong net new subscribers’ growth, mature markets felt the pressure of an uncertain economic environment,” said Carolina Milanesi, research director for mobile devices at Gartner.

“Sales of high-end devices in particular were lower as consumers turned to mid-tier devices when looking to upgrade their old phones. Phone manufacturers should strengthen their mid-tier offerings in order to cater for those users who might be reticent to invest too much money in replacing their old phones when the economic environment remains challenging.”

Nokia remained the top manufacturer with 39.1pc while Samsung overtook the troubled Motorola for the No 2 position. Samsung had a 14.4pc market share in Q108, up from 12.4pc in Q107. Motorola plummeted from an 18.4pc market share in Q107 to 10.2pc in Q108.

Gartner said Motorola was struggling in finding a successor to the popular Razr phone.

“Motorola is unlikely to introduce many products in the second half of 2008, a time when most competitors will bring new additions to the market, so it stands little chance of winning back its No 2 position. It may even have to watch out for a threat from current No 4 player LG,” said Milanesi.

She added: “We remain confident that 2008 will be a growth year for the mobile phone industry. Sales, driven in particular by emerging markets, will continue to rise in the range of 10-15pc. However, the value of the market will be lower than we stated in our forecast update published in December 2007. This is because the current economic slowdown and higher fuel costs will force consumers to defer phone purchases in mature markets, while higher food prices will lead to longer replacement cycles in emerging ones.”

By Niall Byrne