Nokia and Motorola benefit from soaring handset sales

25 Aug 2005

Despite growing competition from Asian manufacturers such as Samsung and LG, Nokia and Motorola between them still accounted for nearly half of global mobile phone sales during the second quarter (Q2) of 2005, research from Gartner shows.

Worldwide mobile phone sales totaled 190.5 million units in Q2, a 21.6pc increase from the same period last year. This is second strongest quarter on record after the fourth quarter of 2004 when worldwide sales reached 195.3 million units.

“All the regions recorded growth this quarter apart from Japan, which saw a small decline in demand compared to Q2 in 2004,” said Carolina Milanesi, principal analyst for mobile terminals research at Gartner.

As expected, sales in the mature markets of Western Europe and North America were driven primarily by replacement phones while in emerging markets it was first-time users that generated sales momentum.

Nokia and Motorola accounted for 49.8pc of worldwide mobile phone sales, with Nokia’s market share growing 2.3pc to 31.9pc – equivalent to 60.8 million units. The firm regained its top position in Latin America and moved up to third position in North America benefiting from the successful launch of its Virgin Mobile which has helped its lagging code division multiple access sales.

US vendor Motorola moved from fifth to second place in Europe behind Nokia and was also second to the Finnish firm in Latin America with 31.9pc of the market. It retained its top ranking in North America with 33.5pc share. It lagged well behind Nokia globally with a 17.9pc share or unit sales of 34 million.

Korea’s Samsung and LG took third and fourth places, respectively, with 12.8pc and 6.5pc market share, while Japanese-Europe joint venture Sony Ericsson took fifth spot with 6.2pc.

In Western Europe, mobile phone sales reached 37.4 million units, 9.9pc up on the same time last year. While vendors did well in selling replacement phones, Gartner said the transition to 3G services was slow. “Users’ lack of interest in 3G services such as video calling meant that users preferred 2.5G GSM phones to 3G handsets,” Milanesi said.

Mobile phone sales in North America totalled nearly 35.5 million units in Q2 of 2005, a 9.4pc jump from Q2 2004. Meanwhile, at 25.6 million units, Latin American handset sales were up by half on the same period last year fuelled by strong sales in Brazil and Mexico.

In Asia/Pacific (excluding Japan), sales reached approximately 48.3 million units in Q2, up 27.5pc from Q2 of 2004, helped by strong demand in emerging markets such as China, India, Bangladesh and Vietnam.
In Japan and South Korea, however, demand was sluggish.

Based on these robust Q2 figures, Gartner stuck to its forecast that worldwide handset sales would top 780 million units by the end of the year.

By Brian Skelly