Worldwide mobile phone sales exceeded 520 million units in 2003, a 20.5% increase over the previous year, says international research firm Gartner.
Gartner expects cellphone demand to top 580 million units this year.
The research house attributes the growth in mobile phone sales to strong replacement demand in mature markets, coupled with higher than expected growth in emerging markets.
"2003 sales surpassed industry expectations, with the fourth quarter presenting a challenge to many vendors as they struggled to meet supply," says Ben Wood, principal analyst at Gartner. "This unprecedented demand is set to continue in 2004, with the first quarter already looking strong."
[Table]Nokia continued to lead the worldwide mobile phone industry, and became the market leader in North America. However, on a worldwide basis, it suffered a decline in market share.
"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," says Wood.
Motorola`s market share declined in the fourth quarter of 2003. However, Gartner says rising sales in the first quarter of 2004 of new products could result in a resurgence in Motorola`s market share in 2004. Despite success late in the year, Motorola lost the leadership position in its home market in North America, even with strong sales of integrated digital enhanced network products.
"Motorola paid a heavy price for the problems it had in delivering some products on time throughout 2003, particularly in CDMA handsets 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," Wood says.
Samsung consistently held a global market share of approximately 10% 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.
"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," says Carolina Milanesi, Gartner analyst.
"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 took fifth place 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," says Ann Liang, Gartner analyst. "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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