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Mobile Handset Market Could Reach Half a Billion Units in 2003
Posted: 13-Dec-2003 [Source: Gartner]

[Gartner research data shows Nokia's lead dropping in total handset sales with strong competition from Siemens and Samsung while LG squeezed out SonyEricsson to make the top five.]

Stamford, CT -- The mobile terminal industry exceeded expectations in the third quarter of 2003, as worldwide mobile phone sales totaled 132.8 million units, a 22 percent increase from the same period last year, according to Gartner, Inc.

"The mobile terminals market is exhibiting extraordinarily strong growth in 2003, and we believe it could reach half a billion units this year," said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe.

The competition among the top tier vendors is heating up, and industry leader Nokia's market share decreased in the third quarter as it faced strong competition from Siemens and Samsung. LG moved into the top five, narrowly pushing Sony Ericsson into the sixth position (see Table 1).

"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," Wood said.

In the mature markets, color mobile terminals are a growing proportion of total sales, with the volume of camera phones also increasing. Gartner analysts said demand for low-cost terminals has also continued.

Table 1 (edited)

Worldwide Mobile Terminal Sales in Percentages

Company.....3Q03%.......3Q02%

Nokia............34.2..........35.5

Motorola.......14.7..........15.8

Samsung........11.2..........10.5

Siemens...........9.1............7.4

LG..................5.3............3.7

SonyEricsson...5.3............4.7

Others............20.2..........22.4

Note: The table includes sales of Integrated Digital Enhanced Network (iDEN) and wireless local loop terminals.

It excludes shipments from original design manufacturers (ODMs) to OEMs.

Source: Gartner Dataquest (December 2003)

All regions of the world experienced at least 18 percent growth in the third quarter of 2003.

The North America market was driven by replacement sales, as users replaced their handsets in favor of new smaller and in many cases, color terminals. With the introduction of mobile number portability on November 24, Gartner analysts believe this will further drive replacement sales for the region.

"The Europe, Middle East and Africa (EMEA) region accounted for 35.5 percent of the world's mobile phone sales, fueled by strong replacement buying in Western Europe," said Carolina Milanesi, industry analyst for the EMEA mobile communications group for Gartner. "This was combined with strong sales in emerging markets such as Eastern Europe, in particular Russia, which saw sales reach 5 million units."

"The Asia/Pacific region bounced back from SARS and was further buoyed by phenomenal growth in India," said Ann Liang, industry analyst with the mobile communications group for Gartner in Asia/Pacific. "Success in China remains crucial in the region with Motorola holding onto the top spot in the face of strong competition from Nokia."

Additional information is available in the Gartner Alert Mobile Terminal Market Shares: Worldwide, 3Q03. This Alert provides analysis on how the global mobile phone industry performed in the quarter. This Alert is available on Gartner's Web site.

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