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Gartner Says Worldwide Mobile Phone Sales Up 21 Percent
Mar 11, 2004
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Strong replacement demand in mature markets coupled with higher than expected growth in emerging markets combined to deliver a record number of units sold in the mobile phone industry in 2003, according to market research firm Gartner, Inc. Worldwide mobile phone sales totaled 520 million units, a 20.5 percent increase from 2002 sales, it reports.

"2003 sales surpassed industry expectations with the fourth quarter presenting a challenge to many vendors as they struggled to meet supply," said Ben Wood, principal analyst at Gartner. "This unprecedented demand is set to continue in 2004, with the first quarter already looking strong. We've increased our market estimate for 2004 to 580 million units."

Nokia continued to lead the worldwide mobile phone industry, and it became the market leader in North America. However, on a worldwide basis, it suffered a decline in market share, Gartner reports. "Sustained competition and aggressive pricing from existing players, loss of share in Western Europe and an increasing number of small players, particularly in Asia/Pacific, presented challenges to Nokia," Mr. Wood said.

Motorola's market share declined in the fourth quarter of 2003. However, rising sales this quarter of new products could result in resurgence in Motorola's market share in 2004. Despite success late in the year, Gartner says that Motorola lost the leadership position in the home market in North America, even with strong sales of integrated digital enhanced network (iDEN) products.

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

Samsung consistently held a global market share of approximately 10 percent during 2003. Its strategy of focusing on higher tier products rather than the intensely competitive, lower-tier, low-margin segment has been reflected in its high average selling prices and double-digit margins, Gartner says.
"The majority of the sales for Siemens were in low tier, low-cost, low-margin products, but it recorded very strong growth in the second half of 2003," said Carolina Milanesi, analyst for Gartner. "Siemens' products were ideally suited to emerging Eastern European markets, especially Russia. Its sales further strengthened as it took full advantage when some competitors were unable to meet market demand."

LG was the number-five vendor in worldwide mobile phone sales in the fourth quarter of 2003, and its success in the Indian market was instrumental in its strong growth. The company also had robust sales in the fourth quarter of 2003, some of which was attributed to strength in North America.

"The Asia/Pacific market remained strong in the fourth quarter, fully recovering from the impact of SARS earlier in the year," commented Ann Liang, analyst for Gartner. "The vendor competition in China remained as fierce as ever as local vendors fought for market share while the market continued to surge in India."

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