by CIO Staff

Worldwide Mobile Phone Sales Increasing

Nov 23, 20053 mins

Worldwide mobile phone sales could climb to 810 million this year, although consumers are not yet buying the sales pitch for high-speed 3G (third-generation) network devices, market analyst Gartner Inc. said on Tuesday.

In the third quarter, manufacturers sold 205.4 million mobile phones, Gartner said, up 22 percent compared to the same period last year.

The strong sales in both emerging and mature markets, coupled with the expectation of continued strong performance in the fourth quarter, prompted the analyst company to increase its full-year market forecast.

However, it warned that consumers are not falling for network operators’ 3G (third generation) sales pitch just yet, and distributors will likely see a build-up in inventory of 3G phones during the fourth quarter.

Finnish manufacturer Nokia Corp. led the pack during the third quarter, with a market share of 32.6 percent, up from 31 percent a year earlier.

Sales of Motorola Inc.’s RAZR phone helped boost that company’s share of the market to 18.7 percent, according to Gartner, putting Motorola in second place ahead of Samsung Electronics Co. Ltd., in third place with 12.5 percent of the market. A year earlier, their positions were reversed, with Samsung at 13.7 percent and Motorola at 13.5 percent.

Samsung’s sales grew slowly because it failed to address emerging markets as effectively as Nokia and Motorola, Gartner said. Motorola, in particular, has made an effort to appeal to customers in emerging markets, introducing a range of very-low-cost phones with basic features.

Geographically, different factors explained the growth in the market.

There were few new customers but plenty of mobile phone sales in North America, where churn — customers switching operators to get a better deal — accounted for the increase in sales, Gartner said. Handset sales there totalled 36.3 million units.

Latin American sales of 26.1 million phones were up 46 percent compared to a year earlier. Growth in Brazil faltered, although it still accounts for over a third of sales in the region.

In Western Europe, sales of 40 million phones were driven by customers upgrading their handsets. Manufacturers have launched new models there to take advantage of new multimedia services.

Gartner groups together sales in Eastern Europe, the Middle East and Africa. Sales there totalled 39.7 million, up 40 percent compared to a year earlier. Growth in this region was driven by sales in Nigeria, Poland, Russia, South Africa, Turkey and Ukraine.

Phone sales grew across Asia, to 52.2 million units, up 27 percent compared to the year-earlier quarter. China and India contributed strongly to the growth, while year-on-year growth in the Japanese market was just 0.6 percent, to 11.3 million phones.

Gartner predicted full-year sales could total 810 million phones, or even 820 million if suppliers and distributors are able to fully satisfy demand.

By Peter Sayer, IDG News Service