Gartner: Mobile sales grow, Nokia's share slips

Replacement demand in mature markets, in addition to higher-than-expected growth in emerging markets, saw mobile phone unit sales rise by 20.5 per cent in 2003, according to a study published by Gartner.

Worldwide unit sales reached 520 million in 2003. The strength of the pick-up in sales, after a sluggish 2002, was amazing, Gartner principal analyst Ben Wood said.

"In the mature markets, a lot of people last bought phones in 2000 or 2001, and so we're reaching the sweet spot for replacement. People want smaller, sexier, colour products," he said.

People also wanted options such as cameras in their phones, and new purchases were as much about fashion as technology, Wood said.

In emerging markets, just having a phone was a status sign, and so the markets were more cost driven but were still growing fast, he said. Nokia lost a little of its market share, slipping to 34.7 per cent from 35.1 per cent, "but it's still spectacularly successful," Wood said.

"Every competitor is out to beat Nokia," he said. "They operate in every area of the market and face competition at all ends. Nokia is also to be applauded for its innovation, as it often leads the market with new technologies."

Motorola also saw its share fall, to 14.5 per cent from 16.9 per cent. Samsung Electronics' share grew 0.8 per cent to 10.5 per cent. Siemens' share rose from 8.0 per cent to 8.4 per cent. Sony Ericsson Mobile Communications followed at 5.1 per cent, down from 5.4 per cent in 2002, and was almost matched by LG Electronics' 5.0 per cent share - a marked improvement on its 3.2 per cent in 2002.

Motorola lost share in 2003 due to problems with delivering products on time, but sales had shown signs of picking up since the beginning of 2004, Gartner said.

The majority of Siemens' sales had been in low-tier, low-cost and low-margin products, which were ideally suited to cost-conscious emerging markets, the company said.

All manufacturers were having to take bets on what technologies to add to their phones, because it wasn't clear what the market would want, Wood said.

There was a possibility that the primary function of mobile devices would shift, so that they became gaming devices or music devices with phone functions, rather than primarily a phone, he said.

Growth was set to continue in 2004, with the first quarter already looking strong, Gartner said.

The research company estimated that 580 million units would be sold this year.