Mobile handset sales shake off SARS

Mobile handset sales shake off SARS

Changing fashions and maturing markets continued to drive mobile phone sales in the second quarter of the year, pushing worldwide unit sales up 12 per cent over the year-ago period, according to market researcher, Gartner.

Worldwide mobile phone unit sales amounted to 114.9 million units during the second quarter, 2 per cent higher than the previous quarter, Gartner said.

Unit sales also grew year-over-year in the first quarter.

The two consecutive quarters of year-over-year growth were a laudable achievement, the company said, given that the market had stagnated during the past couple of years.

Additionally, the industry managed increased unit sales during the quarter despite the outbreak of severe acute respiratory syndrome (SARS) in the Asia-Pacific region.

Sales in Japan, Latin America and the developing markets of Central and Eastern Europe, the Middle East and Africa showed strong growth, exceeding expectations.

More mature markets in Europe also fuelled sales with their demand for more expensive and feature-rich upgrades, Gartner said.

“We are in a replacement cycle in North America and western Europe,” principal analyst of mobile terminals at Gartner, Ben Wood, said.

“It’s definitely about fashion [in North America and western Europe]. People who bought phones at the end of 2001 and in 2002 find they look a bit big and old, and they are now being barraged with new phones that have games, cameras and colour,” he said.

Finnish handset maker, Nokia, continued to lead the pack in terms of units sold, taking 35.9 per cent of the market for the second quarter, up from 34.2 per cent during the same period last year.

Nokia was aided by heightened demand in emerging markets and its success with Code Division Multiple Access (CDMA) handsets, Gartner said.

Indeed, Nokia announced in April that it would begin producing CDMA phones in China in an effort to drum up more sales in that country, although it has not said when production would begin.

China spelled trouble for number-two manufacturer Motorola during the quarter, however, as it lost share due to the SARS outbreak, Gartner said.

Motorola’s market share of unit sales fell from 17 per cent in the second quarter of 2002 to 14.6 per cent in this year’s second quarter.

Motorola was the leading manufacturer in China, but when SARS hit in April and May people abruptly stopped shopping, Wood said, and handset production quickly outpaced demand. It would take a while to distribute the excess handsets.

Meanwhile, Samsung came in third with 9.9 per cent of worldwide unit sales. Siemens took 7 per cent during the second quarter. Sony Ericsson landed with 5.5 per cent of unit sales.

Looking ahead, Wood predicted the mobile handset market would continue to post strong growth and competition would heat up even further.

He said that the fourth-quarter holiday season would result in the biggest sales boom.

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