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Mobile Phone Boom Set to Continue in 2006: Survey

Posted on: Friday, 27 January 2006, 00:35 CST

LONDON -- Global shipments of mobile phones soared in 2005 and will continue to grow in 2006 on the back of strong demand from emerging economies, which snapped up half of all handsets last year, a survey showed on Thursday.

Mobile phone shipments grew 19 percent to 810 million units in 2005 and are expected to rise by 15 percent to 930 million units in 2006, market research group Strategy Analytics predicted after the top five mobile phone vendors had published quarterly earnings.

"Booming demand in the southern hemisphere, in India and Africa, drove global mobile phone sales," said analyst Neil Mawston.

Sales are set to break through the 1 billion mark in 2007.

Finland's Nokia, which reported earnings earlier on Thursday, kept the lead and ended the year with a 34.2 percent market share in the fourth quarter, up slightly from the 33.6 percent in the year-ago quarter.

The mobile phone behemoth introduced new models at both the low and high end of the market, but the market share gain came at the cost of lower average selling prices and profit margins -- the popularity of phones in emerging markets is a direct result of much cheaper models that cost as little as $40.

Second-largest Motorola closed the gap with Nokia somewhat, taking a larger 18.3 percent market share in the fourth quarter versus 16.2 percent the year before on the back of its thin RAZR phone, which made up one in every three of its phone sales.

The U.S.-based firm was the clear winner with quarterly shipments up 41 percent, while most of the others increased shipments by around 28 percent. But Strategy Analytics warned that the company may be relying too much on the success of the RAZR.

Samsung Electronics's market share rose slightly to 11.1 percent from 10.7 percent. Its fellow South Korean handset maker, LG Electronics, was the weakest link in the top five, with quarterly shipments up 17 percent.

The Swedish-Japanese venture Sony Ericsson is breathing down LG's neck due to a comeback based on the Walkman phones it introduced last year.

Both firms now have 6.6 percent global market share, with LG only a whisker ahead of Sony Ericsson.

All top five handset makers now produce more than 50 million handsets a year each.

The really big losers remained the vendors outside the top five. Their combined market share slipped to 23.3 percent in the fourth quarter from 26 percent the year before.

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