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2003 Worldwide Mobile Phone Shipments up 29.7% in Fourth Quarter and 23.3% for the Year, According to IDC

Posted on: Thursday, 12 February 2004, 06:00 CST

IDC David Linsalata, 508-988-6772 dlinsalata@idc.com Michael Shirer, 508-935-4200 press@idc.com

The worldwide market for mobile phones continued to expand in the fourth quarter of 2003, spurred to a record high by strong sales in all regions. According to IDC's Worldwide Mobile Phone QView, worldwide mobile phone shipments grew by 29.7% year-over-year in 4Q03 and increased sequentially by 21.8% to 167.8 million units.

The fourth quarter of 2003 closed out a particularly strong year for the worldwide mobile phone market as handset sales topped half a billion units shipped for the first time in the market's history. Shipments grew 23.3% from 432.7 million devices shipped worldwide in 2002 to 533.4 million handsets in 2003.

"Worldwide mobile phone manufacturers grew their sales by tapping into robust demand in emerging markets in Asia and Eastern Europe. In addition to driving increased sales, first-time buyers' preference for more expensive midrange and high-end mobile phones helped to drive additional revenue to phone manufacturers," said David Linsalata, analyst in IDC's Mobile Devices program. "Additionally, North American and Western European consumers elected to replace their existing handsets with new 2.5G models as the need for 3G remains unproven."

Contained within the volume of worldwide mobile phone shipments, the market for converged mobile devices, or "smartphones," showed significant growth and future promise. In the fourth quarter of 2003, the worldwide converged mobile device market grew 182.3% year- over-year and 77.4% sequentially to 3.7 million units. Strong sales during the fourth quarter drove worldwide shipments for 2003 up 181.6% year-over-year to 9.6 million devices.

"As new devices from Research in Motion (RIM) and newly-reformed palmOne reach market, consumers and enterprises alike are experiencing a fresh take on data-centric converged mobile devices," said Linsalata. "Simultaneously, voice-centric converged mobile devices based on a range of software platforms and available in variety of form factors are seeing significant growth as vendors such as Nokia and Motorola weave imaging and data capabilities with proven telephony experience to form significantly improved devices."

Vendor Highlights

--Nokia - Nokia slightly outpaced the market with sequential quarterly growth of 22.3% and year-over-year quarterly growth of 19.8%, easily maintaining its position as the top mobile phone manufacturer. Nokia's growth stemmed from an ongoing push in both established GSM and CDMA markets throughout the world, as well as an accelerating uptake in low penetration markets such as India, Brazil, and Russia. However, as the overall market grew during 2003, Nokia experienced a drop in annual market share from 35.0% in 2002 to 33.6% in 2003, despite an 18.3% year-over-year growth in shipments.

--Motorola - Motorola's market share fell from 14.9% in 3Q03 to 13.4% in 4Q03 due to modest quarterly shipment increases of 9.6% sequentially and 1.1% year-over-year. This slowdown in shipments was also reflected in the vendor's year-over-year annual growth of only 1.5%, leading Motorola to a lower yet solid position as the number 2 vendor with a 14.1% market share for 2003. With over 20 new handsets launched in the third quarter, Motorola plans to increase its shipments in 1Q04.

--Samsung - Samsung set a new internal shipment record in 4Q03, producing a sequential quarterly gain of 6.5% and year-over-year growth of 26.1%. Sales were driven mainly by strong demand for high- end handsets with imaging capabilities, pushing Samsung to 22.7% year-over-year growth for 2003. However, like the other leading vendors, the growing market pushed down Samsung's share from 10.9% in 3Q03 to 9.5% in 4Q03 and from 10.0% in 2002 to 9.9% in 2003.

--Siemens - Siemens' market share grew from 8.7% in 3Q03 to 9.1% in 4Q03 as the company posted a sequential gain of 27% and a year- over-year gain of 38%. The vendor's additional shipments resulted in a year-over-year annual change of 24.8% and growth of 0.1% to an 8.5% market share in 2003.

--LG Electronics - Despite continued growth by close challenger Sony Ericsson, LG Electronics maintained its number 5 spot in IDC's Top 5 Vendor List with 5.3% of the market in 4Q03, down slightly from 5.5% in 3Q03. LG experienced 17.4% sequential quarterly growth and 81.9% year-over-year quarterly growth. LG's continued push to increase shipments led to a solid 69.1% year-over-year improvement in annual shipments, placing the company at 5.2% of the market in 2003, up from 3.8% in 2002.

Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share, 4Q 2003 (Preliminary) RankVendor 4Q 2003 Shipments4Q 2003 Market Share -------------------------------------------------------------------- -- 1 Nokia 55,342,43233.0% -------------------------------------------------------------------- -- 2 Motorola22,447,81913.4% -------------------------------------------------------------------- -- 3 Samsung 15,986,310 9.5% -------------------------------------------------------------------- -- 4 Siemens 15,241,956 9.1% -------------------------------------------------------------------- -- 5 LG Electronics 8,933,545 5.3% -------------------------------------------------------------------- -- Other 49,837,86529.7% -------------------------------------------------------------------- -- Total167,789,927 100.0% -------------------------------------------------------------------- -- Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share, 2003 (Preliminary) RankVendor2003 Shipments2003 Market Share -------------------------------------------------------------------- -- 1 Nokia 179,339,21033.6% -------------------------------------------------------------------- -- 2 Motorola 75,439,17614.1% -------------------------------------------------------------------- -- 3 Samsung53,004,233 9.9% -------------------------------------------------------------------- -- 4 Siemens45,344,920 8.5% -------------------------------------------------------------------- -- 5 LG Electronics 27,496,720 5.2% -------------------------------------------------------------------- -- Other 152,732,26328.6% -------------------------------------------------------------------- -- Total 533,356,522 100.0% -------------------------------------------------------------------- --

Notes: 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.

Source: IDC, February 3, 2003

Top 5 Vendors, Worldwide Converged Mobile Device Shipments and Market Share, 4Q 2003 (Preliminary) Rank Vendor 4Q 2003 Shipments 4Q 2003 Market Share -------------------------------------------------------------------- -- 1 Nokia2,164,24259.3% -------------------------------------------------------------------- -- 2 Motorola 425,36911.6% -------------------------------------------------------------------- -- 3 Sony Ericsson272,943 7.5% -------------------------------------------------------------------- -- 4 RIM243,957 6.7% -------------------------------------------------------------------- -- 5 Samsung109,898 3.0% -------------------------------------------------------------------- -- Other435,56511.9% -------------------------------------------------------------------- -- Total3,651,974 100.0% -------------------------------------------------------------------- -- Top 5 Vendors, Worldwide Converged Mobile Device Shipments and Market Share, 2003 (Preliminary) Rank Vendor2003 Shipments2003 Market Share -------------------------------------------------------------------- -- 1 Nokia 5,445,307 56.9% -------------------------------------------------------------------- -- 2 Motorola778,2878.1% -------------------------------------------------------------------- -- 3 Sony Ericsson 815,0478.5% -------------------------------------------------------------------- -- 4 RIM 490,2635.1% -------------------------------------------------------------------- -- 5 Samsung 284,8033.0% -------------------------------------------------------------------- -- Other 1,757,473 18.4% -------------------------------------------------------------------- -- Total 9,571,180100.0% -------------------------------------------------------------------- --

Notes: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Converged Mobile Devices -- These mobile devices are either voice or data centric and are capable of synchronizing personal information and/or email with server, desktop, or laptop computers. Positioned to solve the "multiple device question" and replacing the need to carry a mobile phone and a pen-based handheld or a mobile phone and a pager, for example, these devices may also include an expanding list of features, such as multimedia or email. These devices must match wireless telephony capability to evolved operating systems or application environments, such as the Palm OS, Microsoft Pocket PC Phone Edition 2002, Microsoft Windows Smartphone, and the Symbian platform. These devices must include the ability to download data to local storage, run applications, and store user data beyond their required PIM capabilities. Converged handheld devices must also offer the full extent of their application processing capability to the user, regardless of network availability

Source: IDC, February 3, 2003

IDC's Worldwide Mobile Phone QView provides device vendors, software developers, service providers, and component suppliers with timely and accurate information on the worldwide handset market. The program provides quarterly measurements of worldwide mobile phone and converged mobile device unit shipments and vendor market shares.

For more information about IDC's Worldwide Mobile Phone Qview program, please contact Demetrios Louloudes at 508-935-4356 or dlouloudes@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

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