Mobile Phone Sales Up 21% In 2005: Gartner - InformationWeek

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Mobile Phone Sales Up 21% In 2005: Gartner

The top six vendors accounted for 79%of worldwide mobile phone sales in 2005, to the detriment of smaller providers.

LONDON — Worldwide mobile phone sales totaled 816.6 million units in 2005, a 21 percent increase from 2004, as the leading six vendors increased their share of the market at the detriment of smaller vendors, according to market research company Gartner Inc.

The fourth quarter was strong at 235.1 million units shipped. “Based on preliminary data for the first two months we expect to see a similar trend as in the first quarter of 2005 with a drop over the previous quarter in the region of five to eight percent,” said Carolina Milanesi, principal analyst for mobile terminals research at Gartner, in a statement.

Nokia remained the top vendor in 2005 with 32.5 percent of all mobile phone sales, followed by Motorola on 17.7 percent, Samsung on 12.7 percent, LG on 6.7 percent, Sony Ericsson on 6.3 percent and Siemens on 3.5 percent. Other makers captured 20.6 percent of 2005 unit sales but saw their market share eroded to 16.3 percent by Q4 2005.

The top six vendors accounted for 79.4 percent of worldwide mobile phone sales in 2005. The leaders’ market share increased from 78 percent in the first quarter to 84 percent in the fourth quarter of 2005. However, Siemens was beaten out of sixth place by a fast rising BenQ, which had 4.7 percent of unit shipments in Q4, according to Gartner.

“As competition continues to drive price pressure in the low-end, and a design and technology ‘arms race’ in the high-end, the survival of the fittest depends more and more on economies of scale, or very carefully cut out niche markets,” said Milanesi.

“The industry experienced record sales due to continued strong growth in emerging markets, where falling prices for cellular connectivity — phones and subscriptions — resulted in higher-than-expected sales. In more mature markets, such as Western Europe and North America, replacement sales were driven by users that gave into the charm of highly fashionable devices,” Milanesi said in the same statement.

Market leader Nokia has a market share that is more than double that of its nearest competitor in Europe and Asia, and more than three times its nearest competitor in Eastern Europe, the Middle East and Africa. After a difficult 2004, Nokia was able to introduce popular products and bounce back. It took the lead in the Wideband Code Division Multiple Access (WCDMA) market with products such as the n70.

Samsung’s static performance in third place was because it preferred to favor margins over market share and a decision not to enter price wars in the emerging markets, Gartner said.

In Western Europe, sales of mobile phones totaled 49.1 million units in the fourth quarter of 2005 and 164 million units in 2005.

In Central Eastern Europe, the Middle East and Africa (CEMEA), as first time subscribers continued to join networks, mobile phone sales for the year reached 153.5 million units. In North America fourth quarter mobile phone sales reached 41.3 million units and 2005 sales reached 148.4 million units. Sales of mobile phones in Latin America reached nearly 102 million units in 2005, a 40 percent increase from 2004.

In Asia/Pacific, mobile phone sales reached 56.4 million units in the fourth quarter of 2005 and 204 million units in 2005. Sales in the region were fuelled by key markets such as China and India. Mobile phone sales in Japan totaled 11.7 million units in the fourth quarter of 2005, and totaled 45 million units for the year. Music player functionality fuelled replacement sales especially by young users.

Looking ahead to results for the first quarter of 2006 Ms Milanesi said, “Chinese New Year, prolonged Christmas and New Year sales promotions in Western Europe and North America, as well as continued growth in emerging markets, will all contribute to strong sales in the first quarter of 2006.

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