Global mobile sales soar

9 Mar 2005

A traditionally strong fourth quarter drove a 30pc increase in global mobile phone sales during 2004, with a total of 674 million units sold during the year, according to market analyst Gartner.

“The market exceeded even the most optimistic forecasts in 2004. Strong replacement sales, seasonal dynamics and continued growth in emerging markets, especially Latin America, delivered the highest sales volume ever recorded,” said Ben Wood, principal analyst for mobile terminals research at the market watcher.

After a tough start to the year, Nokia rebounded with a fourth quarter 2004 market share of 33pc but Gartner warned that the mobile firm needed to regain the initiative in terms of brand and technology leadership in the face of strong competition from other top five vendors.

In the fourth quarter, Motorola regained its second position ahead of Samsung with higher-than-expected growth. Motorola’s revitalised brand, due largely to the positive reviews of the RAZR V3, helped lead strong sales in Europe and North America. This was combined with aggressive pricing in emerging markets, particularly in Asia Pacific and Latin America.

Samsung increased its brand awareness in 2004, particularly in China and it also demonstrated market leadership in some areas such as multi-megapixel camera phones. Gartner analysts said Samsung would need to change its strategy and expand its product portfolio into the high volume, lower margin segment if it is to challenge Motorola and Nokia.

In western Europe, strong Christmas sales combined with aggressive pricing (both on hardware and promotional contracts/calling plans) helped sustain sales momentum. Other than price, colour screens, cameras and fashion/design remain the key sales drivers in the region.

The momentum built in 2004 will continue into 2005 as Gartner forecasts worldwide mobile phone sales to exceed 730 million units. While the mobile phone market will continue to grow, Gartner analysts said vendors would face challenges on a number of fronts in 2005.

“In mature markets, it remains to be seen whether the record-breaking levels of replacement sales can be sustained,” said Hugues de la Vergne, principal analyst for mobile terminals research at Gartner. “In emerging markets the major battle ground in 2005 will be the sub US$50 handset arena.”

By John Kennedy