Subject: [NEXTEL-1] Despite Seasonal Drop, Worldwide Mobile Phone Market Grows

From: [email-masked]
Date: Mon, 10 May 2004 01:30:48 -0400

Despite Seasonal Drop, Worldwide Mobile Phone Market Grows
29% Year Over Year, Says IDC
Source: Business Wire
Publication date: 2004-05-06

The worldwide market for mobile phones slowed slightly in the first
quarter of 2004 due to expected seasonal effects, but still managed to
post impressive growth year-on-year. According to IDC's Worldwide Mobile
Phone QView, worldwide mobile phone shipments decreased sequentially by
5.9% in 1Q04 and increased by 29.3% year-over-year to 152.7 million
units. Additionally, the nascent market for converged mobile devices, or
"smartphones," posted a sequential decrease of 5.5% but a year-over-year
increase of 85.8%.

Among the top vendors, Nokia experienced the sharpest sequential drop
with a decrease of 19.2% resulting largely from a lack of mid-range
handsets. As carriers looked for alternative sources to fill consumer
demand, vendors such as Motorola and Samsung were able to gain
significant market share at Nokia's expense. However, despite the loss
in market share, Nokia remains firmly positioned as the market leader in
both the mobile phone market and the converged mobile device market.
"Despite the anticipated seasonal effects of the post-holiday first
quarter, worldwide mobile phone manufacturers were able to produce
significant year-on-year growth on the strength of mid-range handsets
featuring color screens and cameras," said David Linsalata, analyst in
IDC's Mobile Devices program. "

Additionally, the market for converged mobile devices, or 'smartphones,"
demonstrated strong growth potential as both enterprises and consumers
continue to show interest in improved devices combining data and
telephony capabilities."  With 1.5 billion wireless subscribers expected
worldwide by the end of the year, IDC expects the worldwide mobile phone
market to surpass 595 million units shipped in 2004. Through 2008, the
market will continue to expand until it reaches nearly an
all-replacement sales scenario towards the end of the decade with over
800 million mobile phones shipping annually. According to IDC's
Worldwide Mobile Phone 2004-2008 Forecast and Analysis (IDC #31080,
April 2004), sales of 2.5G mobile phones will drive market growth for
the next several years with sales of 3G mobile phones finally surpassing
the 100 million annual unit mark in 2007.

The converged mobile device market, surpassing 20 million units shipped
worldwide in 2004, will be dominated throughout the decade by
Symbian-powered devices - Microsoft and PalmSource are expected to mount
a long-term challenge, but will have greater difficulty gaining exposure
to mainstream mobile phone market volume.  "A compelling case for 3G
adoption by consumers has yet to be made. Simply put, there are very few
reasons to drive the vast majority of consumers to buy a new 3G mobile
phone," said Alex Slawsby, senior analyst in IDC's Mobile Devices
program. "As a result, we expect converged mobile devices, powered by
Symbian and Microsoft, as well as 2.5G color screen and camera phones to
be the core of the overall market for several years."

 Vendor Highlights

 -- Nokia - Although Nokia was able to post 17.2% year-over-year
growth, shipments dropped 19.2% sequentially, resulting in a
drop in market share of 4.8% to 29.3%. The decrease came as a
result of a product mix weighted towards entry-level phones
and lacking in midrange color and camera phones, areas that
proved to be growth catalysts for other companies. Nokia plans
to regain its market share through a combination of price
discounts and the launch of approximately 40 new handsets this
year.

 -- Motorola - Motorola posted record shipments in 1Q04, bringing
its formerly slumping market share up 2.7% to 16.6% in 1Q04.
On the strength of a 51.5% year-over-year shipment increase
driven by sales of GSM camera phones, Motorola boosted its
market share to 16.6% of the worldwide mobile phone market.
Going forward, the company hopes to extend its recent momentum
with a range of new mobile phones focusing on mobile music,
broadband, and productivity, scheduled to come to market this
year.

 -- Samsung - Samsung continued its steady march to overtake
Motorola with a year-on-year shipment increase of 88% in 1Q04,
increasing Samsung's market share to 13.1%. Samsung's rise
came on volume sales of its premium products such as its
camera phones and camcorder phones.

 -- Siemens - Despite a year-over-year shipment increase of 60%,
Siemens fell 16% sequentially, resulting in a 1% drop in
market share to 8.4%.

 -- Sony Ericsson - After two quarters at the number 6 position,
Sony Ericsson re-entered the top 5 with a 63% year-over-year
shipment increase on increasing momentum from its mid and
entry level products. However, Sony Ericsson beat LG
Electronics by only 250,000 units, and LG's increasing focus
on GSM phones may threaten Sony Ericsson's stay in the top 5. -0- *T
Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share, 1Q
2004 (Preliminary)
Rank Vendor 1Q 2004 Shipments (000s) 1Q 2004 Market Share

1 Nokia 44,700 29.3%
---------------------------------------------------------------------
2 Motorola 25,300 16.6%
---------------------------------------------------------------------
3 Samsung 20,000 13.1%
---------------------------------------------------------------------
4 Siemens 12,800 8.4%
---------------------------------------------------------------------
5 Sony Ericsson 8,800 5.8%

Other 41,100 26.9%
---------------------------------------------------------------------
Total 152,700 100.0%
---------------------------------------------------------------------

Notes: Vendor shipments are branded shipments and exclude OEM sales for
all vendors.

Mobile Phones -- These small, battery-powered, voice-centric devices
utilize operator-provided cellular/PCS air interfaces for voice
communication. They are designed primarily, in both form factor and
feature set, for a compelling mobile telephony experience, but may also
include text-messaging capability. Mobile phones may include a headset
jack for hands-free operation as well as a variety of features, such as
personal information management, multimedia, games, or office
applications. Mobile phones exist at all points along the form factor,
price point, and feature set continua. Mobile phones that combine voice
communications capabilities with pen or keypad handheld data features
are tracked within the Converged Devices category.

Source: IDC, May 6, 2004

Top 5 Vendors, Worldwide Converged Mobile Device Shipments and Market
Share, 1Q 2004 (Preliminary)
Rank Vendor 1Q 2004 Shipments (000s) 1Q 2004 Market Share

1 Nokia 1,400 41.7%
----------------------------------------------------------------------
2 RIM 426 12.7%
----------------------------------------------------------------------
3 Motorola 411 12.2%
----------------------------------------------------------------------
4 Fujitsu 350 10.4%
----------------------------------------------------------------------
5 Sony Ericsson 197 5.9%

Other 575 17.1%
----------------------------------------------------------------------
Total 3,358 100.0%
----------------------------------------------------------------------

Notes: Vendor shipments are branded shipments and exclude OEM sales for
all vendors.
Converged Mobile Devices -- These mobile devices are either voice or
data
centric and are capable of synchronizing personal information and/or
email
with server, desktop, or laptop computers. Positioned to solve the
"multiple device question" and replacing the need to carry a mobile
phone
and a pen-based handheld or a mobile phone and a pager, for example,
these devices may also include an expanding list of features, such as
multimedia or email. These devices must match wireless telephony
capability to evolved operating systems or application environments,
such
as the Palm OS, Microsoft Pocket PC Phone Edition 2002, Microsoft
Windows Smartphone, and the Symbian platform. These devices must
include the ability to download data to local storage, run applications,
and
store user data beyond their required PIM capabilities. Converged
handheld devices must also offer the full extent of their application
processing capability to the user, regardless of network availability

Source: IDC, May 6, 2004 *T

 IDC's Worldwide Mobile Phone QView provides device vendors, software
developers, service providers, and component suppliers with timely and
accurate information on the worldwide handset market. The program
provides quarterly measurements of worldwide mobile phone and converged
mobile device unit shipments and vendor market shares.  For more
information about IDC's Worldwide Mobile Phone Qview program, please
contact Patrick Gorman at 508-935-4369 or [email-masked].  To purchase
this document, call IDC's sales hotline at 508-988-7988 or email
[email-masked].

 About IDC

 IDC is the premier global market intelligence and advisory firm in the
information technology and telecommunications industries. We analyze and
predict technology trends so that our clients can make strategic,
fact-based decisions on IT purchases and business strategy. Over 700 IDC
analysts in 50 countries provide local expertise and insights on
technology markets. Business executives and IT managers have relied for
40 years on our advice to make decisions that contribute to the success
of their organizations.

 IDC is a subsidiary of IDG, the world's leading technology media,
research, and events company. Additional information can be found at
www.idc.com

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