Q4 Looks Good for Handset Manufacturers
Dec 27, 2002
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The global handset market was moving ahead in the third quarter (Q3) of 2002, as leading manufacturers reported growing shipments heading into the crucial fourth quarter (Q4), according to research firm In-Stat/MDR.

Finnish handset maker, Nokia, reported a return to growth and strong profitability, bolstered by sales of color-display models, and other vendors such as Samsung and LG Electronics in particular, also came out with strong Q3 shipment figures. Even struggling Sony Ericsson reported sales gaining momentum late in Q3 as the company introduced new mid-tier and entry-level models. Motorola, turning its first quarterly profit since the end of 2000, also had a decent quarter, with shipments up 8 percent compared with a year ago.

Despite the success in Q3, the heady days of strong double-digit percentage growth may not return for a while, if ever, according to In-Stat/MDR. Significant challenges still remain for handset makers, including the reluctance of end users (especially in Western Europe and North America) to spend beyond the U.S. $100-$150 range for replacement models, spotty rollout of high-speed networks, the lack of compelling new mobile applications, high penetration rates in developed countries, struggling economies around the globe, and market uncertainty due to political/terrorist tensions.

In-Stat/MDR has also found that:

  • Overall, unit shipments in the third quarter rose more than 5 percent from the second quarter and are on track for a solid fourth quarter. Shipments are projected to grow more than 11 percent sequentially as newer models, many with color displays, reach end-users at affordable prices.
  • Based on stronger than expected shipments in Asia, the former Eastern Bloc countries and Russia, total shipments are projected to reach 434 million units – that’s a 7.7-percent increase year-over-year.

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