Worldwide Mobile Phone Market Exhibits Strong Year-Over-Year Growth on Continued Strength of Developing Markets, IDC Finds
FRAMINGHAM, MA – APRIL 20, 2006 – The worldwide mobile phone market showed continued strength in the first quarter of 2006 with total shipments of 226.7 million units, representing 26.0% growth over the same quarter in 2005, according to IDC's Worldwide Quarterly Mobile Phone Tracker. Although the market experienced a sequential decline of 7.3% when compared to the record fourth quarter of 2005, much of this was due to expected seasonality.
"The year-over-year increase indicates that consumer demand in mature markets is still high enough to drive replacement handset purchases. At the same time, continued growth in developing markets around the world is being fueled by both new subscriptions and replacement purchases," said Ramon Llamas, research analyst for IDC's Mobile Markets group. "The fact that the market is starting the year above the two hundred million unit mark in the historically slower first quarter is a good indicator of where the market may be by the end of the year. It also gives vendors some early indications of consumer preferences, which will need to be translated into feature sets and form factors."
Much of the worldwide growth has been attributed to developing markets, which have not only seen an influx of entry-level devices for first-time users, but an increasing interest in mid-range and higher end devices. Simon Baker, research analyst in Russia, explains: "The headlong expansion of the Russian handset market has, over the last few years, been driven mainly by first time mobile users in the provinces, who tended to buy cheap phones, though in Russia's post-Communist society of huge income disparities, there has always been demand from the new rich for the latest upmarket models. Replacement purchases in the mass market are now becoming much more significant, and with this trend the average retail price of a handset is increasing.
"The pace of change continues to be rapid: despite the continuing Russian economic boom, the handset market started to slow markedly after the middle of 2005," Baker adds. "The slowdown can partly be attributed to increased retail prices following a series of crackdowns on import tax evasion, but saturation in demand for mobile services in most big conurbations must also play a part.
"Now established as one of the most important handset markets in Europe, Russia is fast beginning to mirror other large European markets in an unexpected way – maturity."
1Q06 Vendor Highlights:
— Nokia. The Finnish giant started 2006 much in the same way it closed out 2006 – as the undisputed leader of the worldwide mobile phone market. Growing 39.6% year over year, Nokia marked yet another quarter having wrapped up more than thirty percent of the worldwide market. Thanks to the success of its higher-priced models, average selling prices increased, stemming the trend of steady decline for the past several quarters.
— Motorola. The U.S.-based company continued its string of quarters of year-over-year growth, this time posting a 60.6% gain to begin 2006. Motorola continues to leverage its tremendously popular RAZR model with different colors and form factors in the PEBL and SLVR, and its sustained shipments into developing markets helped propel sales and shipments even further.
— Samsung. With shipments increasing 18.4% year over year, Samsung remained firmly in place as the number three worldwide vendor. With shipment improvement to Latin America and Asia/Pacific, the company pushed even closer to the thirty million unit mark. At the same time, while Samsung increased its shipments from a year ago, sales had a slight decrease.
— LG Electronics. Standing pat in the number four position is LG Electronics, whose first quarter shipments resulted in a 40.5% increase from a year ago. This was the first post-holiday quarter during which LG Electronics' shipments stayed solidly above the ten million unit mark. The combination of a decrease in shipments, higher marketing expenses, and product mix deterioration led to a decrease in sales this quarter for the company, which ultimately resulted in an operating loss.
— Sony Ericsson. The 50/50 venture began the year with an impressive 41.5% year-over-year improvement, and also marked the first time that Sony Ericsson's post-holiday shipments remained firmly above the ten million unit mark. At the same time, after trailing LG Electronics by just a hundred thousand units last quarter, Sony Ericsson saw the difference increase to 2.3 million units. Three new flagship models were announced for music, imaging, and enterprise-focused consumers, and spanned the full spectrum of price points.
Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share
Vendor Q1 2006 Shipments Q1 2006 Market Share Q1 2005 Shipments Q1 2005 Market Share 1Q06/1Q05 Growth
Nokia 75,100,000 33.1% 53,800,000 29.9% 39.6%
Motorola 46,100,000 20.3% 28,700,000 16.0% 60.6%
Samsung 29,000,000 12.8% 24,500,000 13.6% 18.4%
LG Electronics 15,600,000 6.9% 11,100,000 6.2% 40.5%
Sony Ericsson 13,300,000 5.9% 9,400,000 5.2% 41.5%
Others 47,600,000 21.0% 52,400,000 29.1% -9.2%
TOTAL 226,700,000 100.0% 179,900,000 100.0% 26.0%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, 20 April 2006
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Mobile Phones – 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. Mobile phones 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. Mobile phones exist at all points along the form factor, price point, and feature set continua. Mobile phones that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category.
For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or firstname.lastname@example.org.
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