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Nokia Halts Market Slide Price Cuts Help Keep Company's Share Steady

Posted on: Friday, 30 July 2004, 06:00 CDT

Nokia's decision to cut wholesale prices on its mobile phones appears to have helped the Finnish company to stave off further erosion of its global market share in the second quarter, a new industry study shows.

Worldwide shipments of new phones climbed by 38 percent in the three months to June 30 from a year earlier to a total of 157 million units, according to a report to be published on Friday by Strategy Analytics, a Boston-based researcher. Nokia, the world's No.1 cellphone maker, retained a 29 percent share of that market, unchanged from the first quarter, but still down substantially from its 36 percent share a year earlier.

Nokia's share of the global cellphone market has fallen in 2004 to its lowest level in three years amid competition from rival manufacturers like Samsung and Motorola. Since May 1, it has sought to stem its losses by offering to retailers discounts of up to 25 percent on certain models.

"They have done an impressive job in reacting on price and in adjusting their supply chain," Neil Mawston, the author of the Strategy Analytics report, said of Nokia. "It does seem to have had some stabilization effect so far."

Samsung's market share grew more quickly than any of the other top six manufacturers. The company held a 14.5 percent share of the world market at the end of June, up from just 10.5 percent a year earlier, while another South Korean manufacturer, LG Electronics, saw its sales jump by 88 percent in the period, lifting its market share to 6.3 percent from 4.7 percent.

Motorola, the second-largest cellphone maker in the world, claimed a 15.4 percent share, up from 14 percent in the first quarter of 2003.

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