Second Quarter 2003 Worldwide Handset Shipments Increased More Than 19% Year-Over-Year, IDC Says

FRAMINGHAM, MA – July 31, 2003 – The worldwide market for handsets grew in the second quarter of 2003, reflecting continued consumer demand for mobile telephony. According to IDC's Worldwide Handset QView, worldwide handset shipments grew by 19.2% year-over-year in 2Q03 and increased sequentially by 6.7% to 118.3 million units. Nokia maintained its top position in the market while SonyEricsson regained the No. 5 spot from LG Electronics.

"Despite continued economic uncertainty worldwide, the threat of SARS, and concerns of terrorism, the mobile phone market recorded impressive results this past quarter," said Ross Sealfon, research analyst in IDC's mobile device program. "After remarkablesuccess in Japan, cameraphones are attracting worldwide interest, and coupled with color displays and subsidized pricing, the overall mobile phone market is seeing significant growth in 2003."

Within the volume of worldwide handset shipments, the market for converged handheld devices, or 'smartphones,' continues to accelerate. In the second quarter of 2003, the worldwide converged handheld device market grew 330.7% year-over-year and 12.0% sequentially to 1.97 million units. The converged device market now makes up 1.7% of the total mobile phone market, compared with only 0.5% in the same quarter one year ago. During the quarter, a number of new devices were shipped as vendors attempt to determine which combination of functionality, form factor, and price will attract the mass market.

"Integrating wireless voice and data capabilities, the converged device market continues to draw broader consumer and enterprise interest, expanding its core customer base," said Sealfon. "With form factors and operating systems improving, this market is poised for continued growth."

QView Highlights

Nokia. Nokia maintained its market share this quarter and is strengthening its presence in the U.S. and global CDMA markets. In addition, close to one-third of all Nokia phones shipped in the quarter had color screens, multimedia capabilities and a growing number included digital cameras.

Motorola. Motorola's market share dropped in 2Q03 to 13.4% from 17.4% one year ago due mainly to stiff competition in Europe and Asia. Motorola has shipped just 9 new models so far in 2003 and is only just beginning to ship cameraphones.

Samsung. Through an aggressive product strategy, its success in the CDMA market, and a growing GSM presence, Samsung increased its market share to 10.1% and continued to close the gap on Motorola.

Sony Ericsson. Buoyed by the success of its T610 in Europe and its cameraphone efforts in Japan, Sony Ericsson re-entered IDC's top 5 list as it grew its market share to 5.7%.

Converged Handheld Devices. With 61.0% share, Nokia continued to dominate the converged handheld device market in 2Q03. Handspring relinquished its position among the top 5 vendors due to an aging product line, while RIM and Kyocera established themselves as the No. 4 and No. 5 converged device vendors.

Top 5 Vendors, Worldwide Handset Shipments and Market Share,

2Q 2003 (Preliminary)

Vendor 2Q 2003 Shipments 2Q 2003 Market Share

1. Nokia 40,906,111 34.6%

2. Motorola 15,800,000 13.4%

3. Samsung 12,000,000 10.1%

4. Siemens 8,100,000 6.8%

5. SonyEricsson 6,700,000 5.7%

Other 34,814,136 29.4%

Total 118,320,247

Notes: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Handsets — These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text-messaging capability. Handsets may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Handsets exist at all points along the form factor, price point, and feature set continua. Handsets that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category.

Source: IDC, July 31, 2003

Top 5 Vendors, Worldwide Converged Device Shipments and Market Share, 2Q 2003 (Preliminary)

Vendor 2Q 2003 Shipments 2Q 2003 Market Share

1. Nokia 1,200,000 61.0%

2. Sony Ericsson200,000 10.2%

3. Motorola 115,000 5.8%

4. RIM 89,964 4.6%

5. Kyocera 51,000 2.6%

6. Other 310,741 15.8%

Total 1,966,705

Notes: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Converged Handheld Devices — These mobile devices are either voice or data centric and are capable of synchronizing personal information and/or email with server, desktop, or laptop computers. Positioned to solve the "multiple device question" and replacing the need to carry a mobile phone and a pen-based handheld or a mobile phone and a pager, for example, these devices may also include an expanding list of features, such as multimedia or email. These devices must match wireless telephony capability to evolved operating systems or application environments, such as the Palm OS, Microsoft Pocket PC Phone Edition 2002, Microsoft Windows Smartphone, and the Symbian platform. These devices must include the ability to download data to local storage, run applications, and store user data beyond their required PIM capabilities. Converged handheld devices must also offer the full extent of their application processing capability to the user, regardless of network availability

Source: IDC, July 31, 2003

IDC's Worldwide Handset QView provides device vendors, software developers, service providers, and component suppliers with timely and accurate information on the worldwide handset market. The program provides quarterly measurements of worldwide unit shipments and vendor market shares.

About IDC

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