Gartner says sales of cellphone handsets could exceed 510 million units in 2003, making it a phenomenal year for the cellular industry, which had seen a slump in preceding years.
According to the international research firm, this estimate is based on manufacturers` shipments to the distribution channel (sell-in) in the fourth quarter of 2003. It is now raising its 2004 handset sales forecast to 560 million units.
"2003 was a phenomenal year for the mobile phone industry, with an average growth rate of nearly 20%," says Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. "The SARS virus had a significant effect on sales in Asia/Pacific during the second quarter, but sales picked up remarkably in the last two quarters."
Gartner says sales exceeded expectations around the world. The mature markets, including the US, Western Europe and Japan, saw a surge in replacement sales. In Japan, wideband code division multiple access and cdma2000 phones sold particularly well, especially those featuring built-in cameras.
Wood says that in mature markets, replacement sales were the strongest driver of growth in 2003. "Colour screens and camera phones were high on consumers` shopping lists, but there was also a high level of demand for inexpensive voice-centric handsets."
In the emerging markets, such as China, India, Russia and Brazil, sales continued to surpass expectations due to availability of very low-cost phones and aggressive operator strategies to win subscribers.
Gartner cites India as an example where stronger than expected demand resulted in at least 18 million handsets being sold in 2003.
"As we enter 2004, the emerging markets will play an increasingly important role and we expect manufacturers to continue developing low-cost products specifically for these markets."
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