Demand for 3G Phones in Western Europe to Rise

9th June , 2004

Europe : Worldwide mobile phone sales totaled 153 million units in the first quarter of 2004, the highest figure for sales in the first quarter of a year, according to Gartner, Inc. Strong sales in all regions resulted in worldwide mobile phone sales growing 34 percent from the first quarter of 2003.

"Another record quarter of mobile phone sales resulted from an Asia/Pacific market buoyed by purchases for the Chinese New Year, healthy growth in emerging markets and surprising numbers of people in mature markets choosing to upgrade their phones," said Ben Wood, principal analyst for mobile terminals research at Gartner. "Based on first quarter results, we believe worldwide mobile phone sales will exceed 600 million units in 2004."

All of the top 5 vendors experienced an increase in sales in the first quarter of 2004 (see Table 1). Nokia's sales increased by nearly 5 million units worldwide, but it suffered a decline in market share because of decreased sales in Western Europe and North America. "Nokia``s dramatic drop in market share resulted from a weak product portfolio and the decision by operators in Western Europe to source more phones from Nokia's competitors," Wood said.

After successive disappointing quarters, Motorola's mobile phone sales rebounded in the first quarter with particularly robust sales in Western Europe. The popularity of new products based on its "triplets" platform (the V300, V500/525 and V600 phones) helped drive sales. "The challenge for Motorola is to maintain this strong performance. Now that it has started to regain the trust of key global operators, it must keep its promises," Wood said. "Given Nokia's recent price cuts and more flexible approach to working with operators, Motorola can't afford to be late with new products in the second half of 2004."

Samsung's mobile phone market share reached 12.5 percent in the first quarter, as its decision to add lower-cost, lower-specification phones to its portfolio paid off. Its ability to offer mobile terminals across multiple technologies - Global System for Mobile Communications (GSM), code division multiple access (CDMA) and time division multiple access (TDMA) - helped drive sales.

On a regional basis, higher-than-expected sales in Western Europe resulted from the continuation of Christmas sales promotions, as well as buoyant replacement sales. Gartner expects demand for 3G phones in Western Europe to rise in the second half of 2004, following the recent launch of 3G offerings by mobile operators Vodafone, T-Mobile and TIM.

Mobile phone sales in North America grew 30 percent in the first quarter.

Healthy competition between operators of CDMA and GSM networks brought attractive products to market. Consumers gravitated toward color phones, often with built-in cameras.

In Asia/Pacific, sales were strong in Australia, China, India and Thailand. In China, the top Western makers continued to improve their distribution strategies to counteract growing competition from local and regional rivals.

More than 11 million units were sold in Japan.

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