Global cellphone sales up 21.5%

By Staff Writer for Gartner

Johannesburg, 27 Nov 2006

Worldwide mobile phone sales totalled 251 million units in the third quarter of 2006, with Nokia, Motorola and Samsung accounting for 68%, says Gartner.

This is a 21.5% jump in total units sold from the same period last year, the research firm says in a new report.

Gartner says as a result of the strong quarter, it raised its mobile phone sales forecast to reach 986 million units in 2006, with 281 million units expected to be sold in the fourth quarter of 2006.

Carolina Milanesi, principal analyst for mobile terminals research at Gartner, notes that while the sales of replacement handsets were not as buoyant in the more mature markets, they were offset by continuing momentum in sales to first-time buyers in emerging markets.

"We have also started to see increasing sales of replacement models in some emerging markets, which helped push up total sales in the third quarter," she says.

Regional analysis shows that phone sales in Europe, the Middle East and Africa (EMEA) grew 19%, to nearly 48 million units, over the same quarter in 2005.

Russia, which remains one of the key contributors to the EMEA region, seemed to return to normal after a crackdown on illegal imports, which caused a significant increase in average selling prices, the report says.

Other countries that contributed to the strong performance were Ukraine, Turkey, Egypt, Saudi Arabia, SA and Nigeria.

Stiff competition

Milanesi notes that competition is getting stiff among manufacturers and, as a result, life is much tougher for smaller vendors.

Nokia retained its worldwide number one position, with 35.1% market share, gaining 2.6% compared to the same period last year, she says.

She adds that while Motorola increased its worldwide market share in the third quarter of 2006, the company experienced challenges in some regions, losing its number one spot in Latin American and its number two positions in Western and Eastern Europe, Middle East and Africa.

"Christmas might not be so jolly for Motorola in some markets," says Gartner.

Samsung, however, recorded a healthy third quarter, with handset sales of more than 30 million units. It also regained its second place ranking in Western and Eastern Europe, the Middle East and Africa.

"Samsung has won consumers back thanks to finding a more personal approach to design and features, and by embracing the trend for slim devices," Milanesi says.

Sony Ericsson had an exceptional third quarter, she adds, selling 19.4 million units and gaining one percentage point year-on-year.

"The company's success was a result of building a wider portfolio of successful products rather than counting on a single product. It also focused on better planning to avoid the supply problems that have limited its potential in the past," she says.

Milanesi notes that the success of LG's KG800 Chocolate started to melt away this quarter, leaving the manufacturer further behind Sony Ericsson in the worldwide ranking. LG needs to expand its portfolio quickly to move up from fifth place, she adds.