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Mark Peters : April 22th 2006 - 09:07 CET

Worldwide Mobile Phone market still growing

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IDCWorldwide Mobile Phone market still growing : The mobile phone market showed continued strength in the Q1 of 2006 with total shipments of 226.7 million units, representing 26.0% growth over the same Q1 in 2005, according to IDC's Worldwide Quarterly Mobile Phone Tracker. Although the market experienced a decline of 7.3% compared to the record Q4 of 2005, much of this was due to expected seasonality. "The increase indicates that consumer demand in mature markets is still high enough to drive replacement handset purchases. At the same time, continued growth in developing markets around the world is being fueled by both new subscriptions and replacement purchases," said Ramon Llamas, research analyst for IDC's Mobile Markets group.
Worldwide Mobile Phone market still growingMobile Phone market still growing
"The fact that the market is starting the year above the two hundred million unit mark in the historically slower first quarter is a good indicator of where the market may be by the end of the year. It gives vendors some early indications of consumer preferences, which will need to be translated into feature sets and form factors." Much of the worldwide growth has been attributed to developing markets, which have not only seen an influx of entry-level devices for first-time users, but an increasing interest in mid-range and higher end devices. Simon Baker, research analyst in Russia, explains: "The headlong expansion of the Russian handset market has, over the last few years, been driven mainly by first time mobile users in the provinces, who tended to buy cheap phones, though in Russia's post-Communist society of huge income disparities, there has always been demand from the new rich for the latest upmarket models. Replacement purchases in the mass market are now much more significant, with this trend the average retail price of a phone is increasing.

Europe and Russia - Important handset markets
"The pace of change continues to be rapid: despite the continuing Russian economic boom, the handset market started to slow markedly after the middle of 2005," Baker adds. "The slowdown can partly be attributed to increased retail prices following a series of crackdowns on import tax evasion, but saturation in demand for mobile services in most big conurbations must also play a part. "Now established as one of the most important handset markets in Europe, Russia is fast beginning to mirror other large European markets in an unexpected way - maturity."

Nokia Mobile Phones - 2006 Q1 - Vendor Highlights
The Finnish giant started 2006 much in the same way it closed out 2006 - as the undisputed leader of the worldwide mobile phone market. Growing 39.6% year over year, Nokia marked yet another quarter having wrapped up more than thirty percent of the worldwide market. Thanks to the success of its higher-priced models, average selling prices increased, stemming the trend of steady decline for the past several quarters.

Motorola Mobile Phones - 2006 Q1 - Vendor Highlights
The U.S.-based company continued its string of quarters of year-over-year growth, this time posting a 60.6% gain to begin 2006. Motorola continues to leverage its tremendously popular RAZR model with different colors and form factors in the PEBL and SLVR, and its sustained shipments into developing markets helped propel sales and shipments even further.

Samsung Mobile Phones - 2006 Q1 - Vendor Highlights
With shipments increasing 18.4% year over year, Samsung remained firmly in place as the number three worldwide vendor. With shipment improvement to Latin America and Asia/Pacific, the company pushed even closer to the thirty million unit mark. At the same time, while Samsung increased its shipments from a year ago, sales had a slight decrease.

LG Electronics Mobile Phones - 2006 Q1 - Vendor Highlights
Standing pat in the number four position is LG Electronics, whose first quarter shipments resulted in a 40.5% increase from a year ago. This was the first post-holiday quarter during which LG Electronics' shipments stayed solidly above the ten million unit mark. The combination of a decrease in shipments, higher marketing expenses, and product mix deterioration led to a decrease in sales this quarter for the company, which ultimately resulted in an operating loss.

Sony Ericsson Mobile Phones - 2006 Q1 - Vendor Highlights
The 50/50 venture began the year with an impressive 41.5% year-over-year improvement, and also marked the first time that Sony Ericsson's post-holiday shipments remained firmly above the ten million unit mark. At the same time, after trailing LG Electronics by just a hundred thousand units last quarter, Sony Ericsson saw the difference increase to 2.3 million units. Three new flagship models were announced for music, imaging, and enterprise-focused consumers, and spanned the full spectrum of price points.

Mobile Phone Definition
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.

About IDC - Global provider of market intelligence and advisory services
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

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