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IDC reports mobile phone shipments continue robust growth
Posted: 20-Jul-2006 [Source: IDC]

[Q2 phone shipments fall just short of an all-time high reports IDC with volume reaching 237.8 million units. Motorola RAZR continues cutting into Nokia's lead.]

Framingham, MA -- After an impressive first quarter, worldwide mobile phone shipments fell just short of an all-time high in the second quarter of 2006 with volume of 237.8 million units. The robust quarter was enough to boast a 2.1% increase from the first quarter, and 22.5% more than the same quarter one year ago. According to IDC's Worldwide Mobile Phone Tracker, 470.7 million units have shipped so far in 2006, which suggests that the industry may be close to shipping 1 billion units for the full year.

"The industry has been eyeing the milestone of 1 billion handsets shipped in a single year for some time, and many believe 2006 will be the year it happens. However, while the first half of the year has been impressive, IDC does not see this milestone being surpassed this year," said Ryan Reith, research analyst for IDC's Mobile Phone Tracker. "Although the demand for handsets in emerging markets continues to soar, the market's surging growth rate has been balanced by slowing demand in select mature markets."

While the majority of handset shipments were made up of entry-level devices, the second quarter also witnessed strong growth in handsets capable of utilizing bulked-up, third generation network infrastructure. With EV-DO and UMTS now common in the many regions throughout the world, 3G networks and services are becoming an increasingly significant part of the mobility world. The presence of established high-speed networks has resulted in the introduction of new handsets capable of video conferencing, internet access at broadband speeds, and real-time content sharing, all of which drove increased demand during the second quarter.

"With a number of carriers marketing subscription services that take advantage of 3G's advanced capabilities, all of the major vendors are now offering 3G-compatible devices across multiple regions," added Reith. "There has been much talk about 3G being a standard, but that could only become a reality when carriers were able to market services that were appealing to consumers. With competitive services in place to drive usage on mobile phones for applications beyond voice, handset vendors are putting an increasing amount of resources into 3G handsets. Nevertheless, lower-end devices still make up the majority of the market."

Vendor Highlights

* Nokia. The second quarter proved to be another impressive quarter for Nokia as they posted 4.3% growth from the previous quarter and a 28.9% increase from one year ago, with an industry-leading 78.4 million units shipped. So far in 2006, Nokia has enjoyed the success of both the E-series and N-series device lines. Several product announcements during Q2 show that the E-series and N-series have the longevity to drive Nokia as an industry leader for some time. The worldwide leader in 3G handset shipments has leveraged these high end lines to continue as the leader in the next-generation technology, while not losing site of the important role they play in supplying entry level devices in emerging markets.

* Motorola. The continued popularity of The RAZR produced another record quarter for Moto - the company's fifth straight - with 51.9 million handsets shipped. This was a sequential increase of 12.5% over 1Q06 and 53.1% growth from one year ago. The big surprise came from iDEN shipments, as Motorola announced a record quarter of shipments driven by new product releases in the first half of the year.

* Samsung. The Korean based company took a 9.4% quarter-over-quarter decrease in 2Q06, with the majority of the loss coming from the EMEA region. With a number of 3G UMTS handsets launching across multiple regions in the second quarter, the time required for consumer adoption took a toll on device shipments. Despite the decrease in shipments from last quarter, Samsung did increase shipments into Asia/Pacific and the Americas, and worldwide shipments were up 8.2% from a year ago.

* Sony Ericsson. The second quarter of 2006 proved to be a strong one for Sony Ericsson as it posted 33.1% year-over-year growth, passing LG Electronics to become the number 4 handset vendor worldwide. The company continued to build on the success of its Walkman-branded phones by launching a number of new devices, including the first UMTS Walkman phone (the W900), and announcing the W850, which will also be UMTS capable.

* LG Electronics. A 1.7% decrease from last quarter was felt primarily in LG's CDMA handset shipments. In North America, which has historically been a strong region for LG, shipments dropped from 6.5 million units in Q1 to 4.3 million units in Q2. On a positive note, LG shipments of WCDMA handsets went up 170.0% in Q2, and HSDPA handset shipments into Europe, coupled with newly announced plans to ship into the U.S., accounted for the company's growth. Worldwide shipments were up 26.4% year on year - slightly ahead of total market growth.

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