’03 record year for handset sales

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BOSTON-New research shows the mobile-phone market shattered all records by selling more than half a billion units last year. Numbers from research firms Strategy Analytics, Gartner Inc. and IDC all confirm massive gains in the industry, and all predict continuing advances this year.

Such numbers are a far cry from predictions at the beginning of 2003, which held the mobile-phone market would grow only slightly. However, phone shipments caught steam in the second half of last year and continued to gain momentum in the fourth quarter. Indeed, the critical fourth-quarter holiday season registered as the industry’s most successful ever.

According to metrics from Strategy Analytics, mobile-phone makers shipped 159 million devices in the fourth quarter, a 24-percent annual growth rate and an industry record. In 2003, Strategy Analytics found the world’s mobile-phone makers shipped a record 516 million units. This year the firm said the industry is on track to sell 585 million phones.

“In mature markets, replacement sales were the strongest driver of growth in 2003,” said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. “Color screens and camera phones were high on consumers’ shopping lists, but there was also a high level of demand for inexpensive voice-centric handsets.”

Nokia Corp. came out on top, with a total market share of 34.8 percent for the full year, according to Strategy Analytics. However, the company’s command over the market slipped slightly from its 35.1-percent market share in 2002 due to overall growth in the industry.

“Nokia’s growth stemmed from an ongoing push in both established GSM and CDMA markets throughout the world, as well as an accelerating uptake in low-penetration markets such as India, Brazil, and Russia,” wrote research firm IDC.

Motorola Inc. clocked in with a market share of 14.5 percent in 2003, according to Strategy Analytics. Motorola’s market share was down from the 16.3 percent it controlled in 2002, but the company promised to score more gains this year with new handset introductions. However, Motorola rival Samsung Electronics Co. Ltd. continued to gain momentum with its 2003 market share of 10.8 percent, according to Strategy Analytics.

Sony Ericsson Mobile Communications and LG Electronics Co. Ltd. continued their battle for the No. 5 slot, and both claimed total market share of 5.3 percent for the full year 2003. However, according to Strategy Analytics, LG beat out Sony Ericsson in the fourth quarter of last year with a market share of 5.7 percent. LG will report on its fourth-quarter results Friday.

Sales of smart phones and converged wireless devices also grew with the overall phone market, according to IDC. The firm found 3.7 million smart phones sold in the fourth quarter, and 9.6 million in the full year. The firm said Nokia commanded the vast majority of the smart-phone market, followed by Motorola and Sony Ericsson.

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