Emerging markets boost mobile phone market, IDC says

Emerging markets boost mobile phone market, IDC says

First-time buyers in emerging markets helped drive the still-growing mobile phone market in the third quarter of this year, IDC said Wednesday.

Markets like China, India and Central Europe are seeing first-time sales growing, according to Andrew Brown, IDC program manager for mobile devices in Europe, the Middle East and Africa (EMEA).

"Elsewhere, it's mainly a replacement market, but some emerging markets are extremely significant," he said.

Worldwide shipments of mobile phones rose 21.2 per cent compared to the third quarter of last year, reaching 130.1 million units, IDC said. Nokia Corp. remained the leader with 35 per cent of the market, while LG Electronics Inc. pushed Sony Ericsson Mobile Communications AB out of the number-five spot, with 5.8 per cent compared to Sony Ericsson's 5.5 per cent, the report said.

Motorola Inc. was in second place, boasting a market share of 15.5 per cent, ahead of Samsung Electronics Co. Ltd. with 11.5 per cent and Siemens AG with 8.7 per cent.

The top five vendors have started to regain their market share after slipping slightly at the start of the year, IDC said. Between the fourth quarter of 2002 and the first quarter of 2003, the share of the top vendors fell from 77.3 per cent to 71.4 percent. They have fought back and now have 76.6 per cent of the market, but IDC points out that the growing number of Asian vendors will challenge the top five companies to their share.

LG Electronics and Samsung have taken market share from other companies, which have found it hard to compete with their stylish handsets and low costs, Brown said. The European operators are beginning to recognize the need for Japanese-driven design, he said, citing new handsets from Sony Ericsson.

"If you look at their T610, T300, you can see the Asian design there," he said.

Compal Electronics Inc. and Mitac International Corp. are two Asian companies to watch, he said. "Mitac is very interesting, with its move into the (Microsoft Corp.) Windows Smartphone market, and there are other Asian players capable of making commoditized handsets, nice sleek designs at low cost."

While Asian players will have difficulty competing with Nokia's dominance in Europe, "Nokia's not that important in the U.S., because it's not taking CDMA (Code Division Multiple Access) very seriously, and there's a huge Chinese market where an understanding of the culture will help," he said.

However, "you can never underestimate Nokia, with its ability to change and evolve," he said.

Replacement sales in mature markets have been sparked by camera phones and color screens, IDC said.

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