Nokia Corp. hit the second-quarter finish line (pun intended) with strong year-over-year growth in handset shipment volumes, a key metric for Wall Street and those given to horse-race analogies.
The company’s performance established that, despite global macro-economic woes, growth in shipments remains possible.
Indeed, Nokia shipped 122 million handsets in the second quarter, up 21% over the year-ago period, and showed growth in nearly all regions of the world, except its home base in Europe. It claimed 40% of the market.
In contrast, Nokia’s three top-tier rivals combined shipped far fewer handsets. Indeed, if analysts’ estimates of flat to negative growth for Motorola Inc.’s shipments are correct – the vendor is set to report July 31 – the “other four” shipped about as many together as did Nokia alone.
Nokia’s strength was evident in the critical Asia-Pacific region (up 45% over the year-ago quarter), Latin American (39%) and the Middle East-Africa (23%). Growth in China slowed (11%), yet in North America (10%) – Nokia’s albatross – the vendor reversed its previously steady decline. One analyst attributed that gain to a surge at T-Mobile USA Inc. Europe, however, remained flat, which analysts said reflected a slowdown in high-tier replacement sales and a lag in product launches.
Nokia spun its overall industry forecast for the year upward slightly above the 10% mantra it has repeated of late.
Sammy, LG up, SE down
On a year-on-year basis, Samsung Electronics Co. Ltd.’s shipments were up 22% to 45.7 million, based on strength in emerging markets and despite “sluggish demand” in developed markets. The company did not give a regional breakdown, but its shipments were nearly double its nearest rival, LG Electronics Co.
LG reported shipping 27.7 million handsets, up a whopping 45% year-over-year. Fully one-third of LG’s handsets are shipped into North America. With Nokia and LG making gains in North America, that share must come from someone else’s hide – more on that in a moment.
The fourth top-tier vendor to report so far is Sony Ericsson Mobile Communications, which reported shipments of 24.4 million handsets, down 2% year-on-year. SEMC said it would cut jobs and news reports indicated it may be looking at acquiring Spice, an Indian handset supplier, which could boost the company’s low-end portfolio and shipments, where it is weak.
Two analysts’ estimates for Motorola’s shipments in the quarter range from less than 24 million units – which would take it to No. 5, a new low in its slide – to about 25.8 million units, which nonetheless would also represent a slide, in this case to No. 4.
In either case, LG, Motorola and SEMC now appear tightly grouped, with each shipping little more than half the handsets by Samsung. Market analysts appeared to favor LG as the eventual breakout candidate.
A significant loss of market share in Motorola’s former stronghold of North America is suspected, partly offset by strength in the booming Latin American market. But clearly, overall, further sharp contraction in the vendor’s global fortunes is suspected.
