Worldwide Mobile Phone Sales Declined 4 Percent

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Wireless Developer Network - Daily News

Worldwide Mobile Phone Sales Declined 4 Percent

URL(s): www.gartner.com

SAN JOSE, Calif., May 22, 2002 - Worldwide mobile phone unit sales reached 93.8 million units in the first quarter of 2002, a 3.8 percent decline from the first quarter of 2001, according to Dataquest, Inc., a unit of Gartner, Inc. (NYSE:IT and ITB).

Market-leader Nokia experienced a slight decline in global sales to end-users compared to the same quarter last year. Nokia did manage to register a slight increase in market share versus the same quarter in 2001 (see Table 1), despite very weak market conditions in some of its core markets.

Motorola's market share position continued to grow strongly in the first quarter of 2002, thanks to its continued dominance of the Chinese mobile terminal market and its strength in CDMA markets worldwide. Samsung and Siemens experienced the strongest increase in sales, with growth rates of 48.6 percent and 24.1 percent, respectively, during the quarter.

"Samsung's spectacular growth is a reflection of its ongoing success in delivering compelling products across multiple technologies in disparate markets, said Bryan Prohm, senior analyst with the Mobile Communications Worldwide research group for Gartner Dataquest. "Siemens, meanwhile, continued to build on the success it achieved during the latter half of 2001, and it is positioned to make a competitive push in the North American and Latin American GSM markets in 2002."

Table 1 Worldwide Mobile Terminal Sales to End-User Estimates for 1Q02 (Thousands of Units)


------------- ----------- ------------ ----------- ----------- ------
                          1Q02 Market              1Q01 Market Growth
Company       1Q02 Sales    Share (%)  1Q01 Sales  Share (%)    (%)
------------- ---------   ------------ ----------- ----------- ------
Nokia          32,531        34.7        33,506       34.4      -2.9
Motorola       14,533        15.5        13,225       13.6       9.9
Samsung         9,030         9.6         6,076        6.2      48.6
Siemens         8,229         8.8         6,633        6.8      24.1
Sony Ericsson   6,009         6.4          N/A(a)     N/A(a)    N/A(a)
Others         23,424        25.0        37,987       39.0     -38.3
Total          93,755       100.0        97,427      100.0      -3.8
------------- --------- ------------ ----------- ------------ ------

(a) Note: Sony Ericsson did not exist in 1Q01. The respective sales to end-users were Sony 1.9 million units, Ericsson 6.4

million. Source: Gartner Dataquest (May 2002)

Mobile terminal consumption in several key regional markets was again disappointing in the first quarter of 2002. In particular, both Western Europe and Latin America suffered their second consecutive first-quarter fall in year-over-year sales. The Asia/Pacific region (excluding Japan) however, exceeded expectations, as sales in the first quarter increased by 8 percent versus the first quarter of 2001, and jumped by more than 12 percent sequentially from the fourth quarter of 2001.

"Regional demand was highest in Asia/Pacific, where Chinese Lunar New Year promotions and heavy, unofficial terminal subsidies in the Korean market served as catalysts for a strong sell-through," said Ann Liang, industry analyst with the Mobile Communications Worldwide research group for Gartner Dataquest in Asia/Pacific.

"Saturation levels in Western Europe mean driving new growth remains a challenge," said Ben Wood, senior analyst for Gartner Dataquest in Europe. "The industry is faced with an 'application gap,' which could prove detrimental. Subscribers remain unconvinced about the benefits of owning a data-capable phone without the appropriate applications. However, the advent of color screens will help as subscribers are willing to buy color for the sake of color."

While worldwide mobile phone sales declined in the first quarter of 2002, shipments into the channel (sell-in) totaled 90.3 million units, up 11.8 percent from the first quarter of 2001. "The stronger sell-in during the first quarter of 2002 is undoubtedly a result of a healthier global inventory situation compared to the same period a year ago," Prohm said.

Gartner Dataquest analysts also noted that while a modest amount of inventory did accumulate in the channel at the end of last year, it was not enough to significantly depress shipments into the channel (sell-in), as had occurred in the first quarter of 2001.

"Stronger-than-expected subscriber growth in Russia and other emerging markets in Asia, Eastern Europe and the Middle East during the first quarter helped keep sell-in volumes in line with expectations, and also kindled another quarter of strong gray market movement of mobile terminals," Prohm said. "Overall, sales to end users slightly outpaced sell-in during 1Q02, and global inventory returned to 'normal' levels."

This research is published by Gartner Dataquest's Mobile Communications Worldwide research group. This group examines the opportunities in mobile communications with detailed coverage of the entire value chain of mobile services and equipment that are enabling the creation of a new wirefree networked economy. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/1--researchanalysis/focus/telecom--fa.html.

To subscribe to Gartner Dataquest programs, please call 408-468-8000. Reports can be purchase on the Internet at www.gartner.com.

Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software and services sectors of the global information technology industry.

Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,300 associates, including 1,200 research analysts and consultants in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com.

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