Worldwide Mobile Phone Sales Surge

Driven by strong replacement demand, the worldwide market for mobile phones saw higher than expected growth in 2003, according to a study released today by research firm Gartner .

Worldwide handset sales in 2003 totaled 520 million units, a hefty 20.5 percent increase over 2002.

“This unprecedented demand is set to continue in 2004, with the first quarter already looking strong,” said Ben Wood, principal analyst at Gartner. “We’ve increased our market estimate for 2004 to 580 million units.”

In terms of market share, Nokia held on to the top slot, with 180.7 million units sold in 2003 for a 34.7 percent slice of the market. Nokia’s unit sales were up 19 percent from the 151.4 million units sold in 2002, though its market share declined slightly from 35.1 percent.

The number two vendor, Motorola, had a tough year. Though its overall figures were an impressive 75.2 million units sold for a 14.5 percent market share, the company was hit with declining sales in the fourth quarter. However, a recent sales rise could result in a resurgence for the company in 2004.

“Motorola paid a heavy price for the problems it had delivering some products on time throughout 2003, particularly in CDMA where both LG and Nokia made gains at its expense,” said Wood. “Motorola has started off this year well, and its outlook for 2004 is increasingly positive.”

Indeed, in a separate announcement, Motorola tipped its hope of propelling its mobile sales by making its phones more multimedia capable. This week Motorola unveiled three new handsets: the E398, E680 and C650, which feature MP3 audio, surround sound or camera features in various models. The introductions follow Motorola’s aggressive roll out of smartphones in recent months.

Motorola chief brand manager Geoffrey Frost said the device formerly known as the cellphone is now our wireless entertainment portal.

Motorola also linked up with the video cable channel MTV, which will provide mobile content to European users of the Motorola handsets. Motorola officials weren’t immediately available for additional comment.

In Gartner’s worldwide rankings, Motorola was followed by Samsung. As the number three vendor, Samsung toted up sales of 54.5 million handsets in 2003 for a 10.5 percent share.

Samsung was singled out by Gartner for implementing a savvy strategy, which focused on higher-tier products rather than on the intensely competitive, low-margin product segment.

Rounding out the top six were Siemens, with 43.8 million units sold for an 8.4 percent share; Sony Ericsson with 26.7 million units and a 5.1 percent share; and LG with 26.2 million units and a 5.0 percent share.

Minor vendors grouped into the “other” category accounted for 113 million units and a 21.7 percent share.

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