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Samsung overtakes Motorola
Posted: 01-Dec-2004 [Source: Gartner]

[Nokia gains ground and Samsung moves ahead of Motorola as Gartner reports Q3 worldwide mobile phone sales.]

Egham, UK -- Worldwide mobile phone sales surpassed 167 million units in the third quarter of 2004, a 26 percent increase from the third quarter of 2003, according to Gartner, Inc.

"Historically, the third quarter is seldom strong," said Carolina Milanesi, analyst for mobile terminals research at Gartner. "The industry expected sales to be flat in preparation for Christmas demand. However, all regions apart from Japan registered year on year growth."

Ms Milanesi added, "New handset models and decreasing prices fueled replacement sales in mature markets such as Western Europe and North America. In Asia, Central Europe and the Middle East, emerging markets continued to add new subscribers."

Market leader Nokia regained ground and lifted its market share above 30 percent for the first time in two quarters.

Principal analyst Ben Wood at Gartner said: "For Nokia, breaking back through the 30 percent market share barrier will be an important psychological boost after a disappointing start to the year. Now Nokia must maintain this positive momentum and address shortcomings in the code division multiple access (CDMA) market to ensure it sustains its position."

Q3 2004 Market Share (%)

Nokia 30.9

Samsung 13.8

Motorola 13.4

Siemens 7.6

LG 6.7

Sony Ericsson 6.4

Others 21.2

Total 100.0

Samsung had a strong quarter and overtook Motorola to become the second biggest mobile terminal vendor worldwide.

"Samsung's move into second place was a result of strong global performance, delivering an increasing spectrum of products based on multiple technologies," Mr Wood said. "It performed particularly well in North America. Despite this, it remains neck and neck between Motorola and Samsung for second place as 2004 comes to an end."

Motorola slipped to third position, but remained the market leader in North America, boosted by the strength of the Integrated Digital Enhanced Network (Iden) market. Gartner believes the inventory Motorola built in the channel at the end of this quarter puts it in a good position to fight back for second position in the fourth quarter.

Siemens recovered from a slip in the second quarter and grew its market share to 7.6 percent. It surprised the market with a particularly good quarter in the Americas, nearly doubling its market share in North America.

LG had a positive quarter and regained fifth place from Sony Ericsson. Sales were mainly driven by strong results in North America, strong performance in the 3G market in Western Europe and solid sales in the remaining regions.

Regional Analysis

In Western Europe, replacement sales were fueled by availability of new models and decreasing pricing.

North America experienced another record quarter, growing 22.6 percent over the same quarter in 2003. Operators continued to aggressively add subscribers through handset and service promotions, and several vendors launched new products during the quarter.

Asia Pacific saw healthy growth driven by countries such as India, the Philippines and China. Operator promotions to encourage both new and replacement subscribers, such as free SIM-cards swaps in countries without Mobile Number Portability (MNP) and price cuts by handset vendors, contributed to the results. In Hong Kong and Australia, operators offered heavy subsidies on wideband code division multiple access (WCDMA) handsets to encourage service adoption.

In Japan, sales dropped 12.8 percent compared to the same quarter last year, when sales peaked driven by new demand for camera phones. Vendors are struggling to maintain profitability due to lower margins on 3G handsets compared with 2G.

Brazil and Mexico continued to be the driving forces in Latin America. Mobile phones are becoming more affordable and the total sales of mobile phones reached an all time high with 17.2 million units, a 66 percent growth year on year.

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