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Worldwide Mobile Phone Market Breaks 200 Million Unit Mark in 3Q05, According to IDC

Posted on: Thursday, 20 October 2005, 15:00 CDT

New product introductions, portfolio refreshes, and exciting new form factors helped spur growth in the worldwide mobile phone market during the third quarter of 2005. According to IDC's Worldwide Quarterly Mobile Phone Tracker, worldwide mobile phone shipments rose 19.1% year over year and increased sequentially 8.8% in 3Q05 to reach 208.3 million units. Year-over-year growth increased substantially over the prior two quarters, signaling a balance against slower growth during the first half of the year. Each of the top 5 vendors within the industry reached all-time-high shipment levels and maintained the same rankings from the previous quarter.

"Last year, quarterly mobile phone shipments didn't reach 200 million units until the end of the fourth quarter when vendors were keeping the channels' shelves stocked for the holiday rush. As vendors announced new products earlier this year and accelerated their time to market, we've already reached this milestone," said Ramon Llamas, research analyst for IDC's Mobile Devices team.

The extensive introduction of new devices from a number of vendors in markets worldwide to fit the full spectrum of market segments fueled healthy growth in 3Q and ensured comprehensive early visibility and availability of devices for 4Q to meet the seasonal increase in demand and spending. As in previous quarters, Western Europe was a leading region with regard to new device launches.

"The dominance of the handset subsidy model and 12-month upgrade cycles in Western Europe combined with the introduction of a number of highly publicized, multimedia-oriented high-end handsets to drive demand in a mature market that is witnessing saturation of subscriber growth," said Andrew Brown, program manager, European Mobile Devices, IDC.

However, despite sustained growth in the region fueled by the volume of new device releases quarter on quarter, IDC emphasizes the challenge facing vendors.

"As the mobile phone market becomes increasingly segmented in Western Europe, vendors are under pressure to expand their portfolios in order to comprehensively fulfill market demands with regard to air interface, form factor, technical specifications, multimedia capability, software, and ASP. Although new handsets will substantially assist market volume growth, the challenge for vendors is to meet differing segment requirements without over-extending the portfolio and adversely affecting margins," said Geoff Blaber, research analyst for European Mobile Devices, IDC.

Vendor Highlights

-- Nokia - With shipments of 66.6 million units worldwide

representing year-on-year growth of 29.6% and an increase in

market share to 32%, the Finnish vendor reinforced its

dominance of the mobile phone market, buoyed by particularly

strong growth in China and Asia/Pacific and despite a

year-on-year shipment decline in North America. Nokia's Series

60 multimedia-oriented devices such as the 6630 and 6680

continued to enjoy solid demand, the 6680 becoming the world's

best-selling WCDMA device. However, despite growth of the

high-end segment, ASPs declined slightly both sequentially and

year on year due to strong volume growth in emerging markets.

-- Motorola - Touting itself as the company of "wickedly cool

products," Motorola finished the quarter as the clear number 2

vendor in the industry, claiming leadership in the Americas

and gaining ground in Europe and developing markets. Like

Nokia, much of Motorola's shipments focused on growth within

developing regions, thanks to its ultra-low-priced phones.

Helping to propel the brand is the continued success of the

RAZR series, and other impressive devices, most recently its

iTunes ROKR phone and a series of other devices built on the

RAZR platform.

-- Samsung - After a slow second quarter, Samsung picked up the

pace with increased shipments to Europe, North America, and

its home country of Korea. Samsung delivered on its promise to

improve revenues and profits this quarter via the introduction

of high-end and premium devices featuring EV-DO and W-CDMA,

DMB, and Bluetooth. Recent announcements after the close of

the quarter highlight Samsung's commitment to even more

high-end devices, as a device designed in conjunction with

Bang & Olufsen is expected to hit the market in early 2006.

-- LG Electronics - Holding steady in the number 4 position is LG

Electronics. The company improved its CDMA and GSM lineups

with new phones, particularly in the U.S. and Korea, but also

faced a decrease in WCDMA and other high-end phones, resulting

in a slight decrease in average selling prices. Finally,

whereas only 300,000 units separated LG Electronics from Sony

Ericsson in 2Q05, the difference grew to 1.6 million units

during the third quarter.

-- Sony Ericsson - Rounding out the top 5 vendors is Sony

Ericsson. In addition to the introduction of several

Walkman-branded phones, the company rolled out several

mid-tier and entry-level phones to balance its portfolio.

High-end devices still rule the company's portfolio as the

company's average selling price rose from the previous

quarter. Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share (Unit shipments are in millions) Rank Vendor 3Q05 3Q05 3Q04 3Q04 Growth ------------ --------- ---------- --------- ---------- ----------- Shipments Market Shipments Market Share Share ------------ --------- ---------- --------- ---------- ----------- 1 Nokia 66.6 32.0% 51.4 29.4% 29.6% ------------ --------- ---------- --------- ---------- ----------- 2 Motorola 38.7 18.6% 23.3 13.3% 66.1% ------------ --------- ---------- --------- ---------- ----------- 3 Samsung 26.8 12.9% 22.7 13.0% 18.1% ------------ --------- ---------- --------- ---------- ----------- LG 4 Electronics 15.5 7.4% 11.8 6.7% 31.4% ------------ --------- ---------- --------- ---------- ----------- Sony 5 Ericsson 13.8 6.6% 10.7 6.1% 29.0% ------------ --------- ---------- --------- ---------- ----------- Others 46.9 22.5% 55.0 31.4% -14.7% ------------ --------- ---------- --------- ---------- ----------- Total 208.3 100.0% 174.9 100.0% 19.1% ------------ --------- ---------- --------- ---------- ----------- Source: IDC, 2005 Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Mobile Phones - These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text-messaging capability. Mobile phones may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Mobile phones exist at all points along the form factor, price point, and feature set continua. Mobile phones that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category.

To purchase this document, please contact your local IDC office or visit www.idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

All product and company names may be trademarks or registered trademarks of their respective holders.

Source: Business Wire

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