Global sales of handsets in the first quarter jumped 13.6% from the year-ago quarter, reaching 294 million units, according to a recent report from Gartner.
Nokia Corp., Samsung Electronics Co. Ltd. and LG Electronics Co. accounted for most of that surge, with LG propelling itself into the No. 4 global ranking over Sony Ericsson Mobile Communications.
Various parties, from analysts to handset vendors, have given cautious forecasts for year-on-year growth in handset volumes this year that range from 4% to 10%. In April, Nokia reiterated its forecast for 10% growth in global handset shipments this year. Thus, the Gartner data appeared to suggest that global sales remain strong in the face of macroeconomic conditions.
Western Europe slowing
Gartner found, however, that mobile-phone sales in Western Europe actually dropped 16% in the first quarter from the year-ago quarter – a factor that worked against Sony Ericsson.
“LG capitalized on the attention the market has given to touchscreen devices since the launch of the Apple iPhone,” said Carolina Milanesi, a Gartner analyst. “(But) LG must remember that touchscreen phones do not appeal to everyone (and it) needs to build a stronger smartphone portfolio.”
LG shipped 23.6 million units in the first quarter, up from 16 million in the year-ago quarter, while Sony Ericsson shipped 22 million units, barely up from the 21.8 million it shipped in the year-ago quarter.
Sony Ericsson’s flat results caused it to lose nearly a point of market share, while LG gained nearly two points. Sony Ericsson attributed its weak results to the softness in Western European markets.
“With new products for the second half of 2008, and with a stronger mid-tier portfolio, Sony Ericsson is in a good position to win back its fourth place in the market-share rankings,” said Milanesi.
Nokia, Samsung up, Moto suffers
Gartner found that Nokia gained nearly four market share points from the year-ago quarter, Samsung gained two points, while Motorola Inc. lost more than eight points of share on a steep decline in shipments. Motorola shipped 29.9 million units in the first quarter, down from the 47.6 million it shipped in the year-ago quarter.
The “other” category, which accounts for scores of second-tier handset vendors, actually gained 1.7%, according to Gartner’s data – perhaps a small sign that smartphone vendors and regional handset makers found opportunity in a market that in the past two years had been increasingly dominated by the top-tier vendors.
Emerging markets remain hot
Regionally, shipment growth in the Asia/Pacific (APAC) region, in Eastern Europe, the Middle East and Africa (EMEA) and Latin American were about 26% to 28% over the year-ago quarter – double the global figure, according to Gartner.
North American shipment growth was only 2.4% greater than the year-ago quarter, on volume of 42 million units. In addition to Western Europe, Japan also experienced negative growth, of 10%.
“Operators (in Western Europe) have been driving sales of higher-end devices by offering higher subsidies but with longer contract periods, which is having a negative impact on replacement cycles,” Milanesi said. “Sales of high-end devices were also adversely affected by the economic slowdown that many countries are experiencing. Consumers pressured by a higher cost of living continued to replace their phones, but chose devices from the mid-tier, which tends to be offered for free and with shorter or less expensive service contracts.”
Milanesi said that Gartner stood by its forecast of 10% to 15% unit shipment growth worldwide for 2008, though the overall value of handset sales globally would be impacted by higher fuel and food costs.
