The European mobile device market suffered a disappointing performance in the second quarter of 2006 as the total market declined 3pc year on year to total 3.3 million units.
Although sales of converged voice and data phones were up 10pc they failed to offset the negative growth in the handheld segment.
In particular, the handheld computing market continued its downward spiral as sales declined 49pc year on year, new figures from IDC reveal. It was the worst performance of this particular end of the market since the fourth quarter of 2005.
All handheld computer vendors, with the exception of Fujitsu Siemens, suffered double-digit negative growth in the second quarter as the handheld market declined beyond expectations.
Factors contributing to falling phone and pocket computer sales included large volumes of channel inventory as a result of comparatively high sell and low demand in recent years. This was coupled with the intensification of competition from competitively priced GPS (global positioning system) devices.
“Although converged devices continue to exhibit healthy growth at the worldwide level, growth of 23pc for western Europe in the first quarter is indicative of a leading market that is falling short of expectations this year,” said Andrew Brown, program manager, European mobile devices and computing, IDC.
“Delayed product launches and portfolio transitioning for key vendors such as Motorola and Sony Ericsson has been a leading cause, further exacerbated by heightened competition from the feature phone segment in the first quarter as carefully positioned multimedia solutions served to counter the advance of converged devices into the consumer space,” Brown said.
Consequently, the second quarter saw the onus on Nokia to drive market growth continue to increase, with shipments for the Finnish vendor growing by 13pc year on year to account for 74pc of the converged device market compared to 72pc in 2Q05.
Canadian vendor RIM also maintained steady growth year on year of 34pc, consolidating second position in the total mobile devices market, while the absence of any significant traction in the first half of the year for alternative Symbian licensees to Nokia meant the market-leading operating system suffered flat growth of 2pc year on year.
In contrast, substantial growth of 210pc for Qtek contributed to converged device growth of 84pc for the rival Windows Mobile platform, as Microsoft’s rollout of MSFP (Messaging and Security Features Pack) and modest growth in OEM/ODM support served to increase its share of the converged device operating system landscape to 17pc.
“Mobile device market performance in the second quarter is indicative of a market in the midst of a significant transition,” said Geoff Blaber, senior research analyst, European mobile devices, IDC.
“Although handheld vendors are steadily migrating product lines towards a higher mix of converged devices, the complexities and challenges inherent in executing such a shift in strategy at a time when the handheld market is suffering sequential declines means converged devices are struggling to compensate for shrinking handheld volumes and margins.
“Microsoft is proving to be the biggest victim of this scenario, with comprehensive growth of 84pc for Windows Mobile converged devices failing to offset substantial negative handheld growth, resulting in an overall decline of 7pc in Windows Mobile device shipments from the second quarter of 2005,” Blaber said.
By John Kennedy
