e-business: ‘On fire’ mobile market is set to break the half a billion barrier

Mobile phone sales could reach half a billion this year -but Finland’s Nokia and US-based Motorola are under pressure from German rival Siemens and Korea’s Samsung and LG.

Ben Wood, analyst at research firm Gartner Dataquest, said: ‘The mobile market is on fire -we’re seeing phenomenal growth.

At the start of the year we expected to reach 460 million to 470 million unit sales, but now it could be half a billion when we close the year. The market is growing on two fronts -we’ve hit a sweet spot for replacement sales in mature markets while emerging markets such as Asia/Pacific and Eastern Europe continue to sign up new subscribers at a phenomenal pace.’

His comments follow new sales statistics for the mobile handset market, which show that a total of 133 million phones were bought by consumers in the third quarter of the year alone. Manufacturers have benefited from a double boost of demand for cheap phones from emerging markets such as Russia, India and China as well as an increased appetite for more sophisticated colour screen and camera phones in saturated markets where consumers have traded in their old models.

The biggest sales gain during the quarter was notched up by German firm Siemens, which saw its market share rise from seven per cent to 9.1 per cent.

The company’s relatively cheap products did well in Europe, but Siemens’ success eroded the position of the world’s biggest handset maker, Nokia, whose global strength is based on its position on the Continent.

Nokia saw its market share drop from 35.9 per cent to 34.2 per cent. The Finnish firm had been hoping to reach a 40 per cent global market share.

Gartner confirmed a trend spotted by rivals Strategy Analytics, showing Nokia’s European market share dwindling to 42.1 per cent in the third quarter from 48.8 per cent in the second.