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Strong Q4 Sales Led Worldwide Mobile Phone Sales to 30 Percent Growth in 2004
Posted: 02-Mar-2005 [Source: Gartner]

[Gartner reorts total mobile phone sales surpassed 674 million units in 2004 and forecasts worldwide mobile phone sales to exceed 730 million units in 2005.]

Egham, England -- Driven by strong fourth quarter growth, worldwide mobile phone sales surpassed 674 million units in 2004, a 30 percent increase from 2003 according to Gartner Inc. Worldwide mobile phone sales grew 24 percent in quarter four compared to the same quarter in 2003. "The market exceeded even the most optimistic forecasts in 2004. Strong replacement sales, seasonal dynamics and continued growth in emerging markets, especially Latin America, delivered the highest sales volume ever recorded," said Ben Wood, principal analyst for mobile terminals research at Gartner.

After a tough start to the year, Nokia rebounded with a fourth quarter 2004 market share of 33 percent.

"Nokia stabilized its market share at the end of 2004 after the challenges of the first two quarters where it dropped to 28.8 percent," Mr. Wood said. "Its broad portfolio of devices combined with its profitable high volume low-tier products will help sustain this position in 2005, but it must regain the initiative in terms of brand and technology leadership in the face of strong competition from other top 5 vendors."

In the fourth quarter, Motorola regained its second position ahead of Samsung with higher than expected growth.

Motorola's revitalized brand, due largely to the positive reviews of the RAZR V3, helped lead strong sales in Europe and North America. This was combined with aggressive pricing in emerging markets, particularly in Asia Pacific and Latin America. Samsung increased its brand awareness in 2004, particularly in China, and it also demonstrated market leadership in some areas such as multi-mega pixel camera phones. To challenge Motorola and Nokia Gartner analysts said Samsung will need to change its strategy and expand its product portfolio into the high volume, lower margin segment.

In Western Europe, strong Christmas sales combined with aggressive pricing (both on hardware and promotional contracts / calling plans) helped sustain sales momentum. Other than price, color screens, cameras and fashion / design remain the key sales drivers in this region.

The North America market has been led by replacement sales. Generous promotions offering multiple "free" handsets on family price plans and declining prices for color / camera phones fueled growth.

In Asia/Pacific, replacement sales played a significant role in more mature markets like Australia, Hong Kong and Singapore remained buoyant with competition in Hong Kong intensifying further. In China, mobile phones with color displays and camera phones continued to grow. GSM sales accounted for 85 percent of total sales due to competitive pricing and focus on low-tier market by China Mobile. Overall mobile phone sales in Japan declined in 2004.

Latin America ended 2004 with strong sales in the fourth quarter. Almost 19 million new subscribers were added in the fourth quarter, with more than 7 million subscribers in Brazil.

The momentum built in 2004 will continue into 2005 as Gartner forecasts worldwide mobile phone sales to exceed 730 million units. While the mobile phone market will continue to grow, Gartner analysts said vendors will face challenges in 2005.

"In mature markets, it remains to be seen whether the record breaking levels of replacement sales can be sustained," said Hugues De La Vergne, principal analyst for mobile terminals research (Americas) at Gartner. "In emerging markets the major battle ground in 2005 will be the sub $50 handset arena."

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