Nokia Extends Lead on Cellphone Rivals,
Increasing Its World Market Share to 35%
Reuters
LONDON -- The world's largest mobile-telephone company, Nokia Corp., extended its lead over its smaller rivals in the first quarter of 2001, according to new research from Gartner Dataquest.
The Finnish company sequentially increased its world market share to 35.3% from 33.9% in the fourth quarter, nearly three times as much as No. 2 Motorola Inc. of Schaumburg, Ill., which had a 13.2% share.
Meanwhile, Sweden's Telefon AB L.M. Ericsson surrendered its No. 3 position to Germany's Siemens AG, which kept its share stable at 6.9% while Ericsson's fell to 6.8% from 8.7%.
Shares of Nokia, which said earlier this year it is shooting for a 40% world market share and has suggested it has about 38%, rose 73 cents to $29.24 at 4 p.m. Thursday in New York Stock Exchange composite trading.
Investors don't think the actual size of its market share makes a big difference. "The 40% target is still achievable. Nokia improved its market share from the fourth quarter. Its market share in Europe certainly exceeds 40%," said Seth Kirkham, a wireless-fund manager at Investec Asset Management.
The position of Ericsson had rapidly become awkward, even after it announced last month it would merge its handset business with Japan's Sony Corp., Mr. Kirkham said, adding, "Even together, they have less than 10%. They have a lot of things to do."
Gartner also said about 96.7 million cellphones were shipped to consumers in the first quarter, on track for total sales to end-users of 500 million units for the year.
However, this didn't mean cellphone makers would ship as many phones to their customers, such as mobile-telecommunications operators, because 30 million to 35 million handsets were sitting in warehouses at the beginning of the year and still waiting to be sold, Gartner said. Also, between five million and 10 million cellphones of nonbranded producers were carried over as factory inventory.
Some producers, such as Siemens, have already said total world-wide sales by manufacturers to operators and cellphone retail chains could be about 400 million handsets in 2001, compared with well more than 410 million phones sold in 2000.
On average, mobile-phone makers expect to ship some 450 million phones this year. Two months ago, Gartner estimated some 507 million phones would be shipped to consumers in all of 2001, and the fact that it now uses a new number of 500 million means business has become slightly tougher.
"The high annual growth rates in global mobile-terminal sales realized during the previous decade will prove unsustainable," said Gartner analyst Bryan Prohm.
The market is going to depend more on sales of new models to existing customers, rather than to new customers, which means growth will slow. Furthermore, developmental problems with new wireless networks, such as GPRS, which offers always-on Internet access for cellphones, will lead to lower growth. In addition, there is a lack of services for these new handsets and therefore little incentive to switch phones. "The unbridled optimism of the past has been superseded by an atmosphere of increasingly reckless pessimism about the prospect for next-generation mobile-phone telephony and services," Mr. Prohm said.
The latest Gartner numbers also suggest that Siemens and South Korea's Samsung Electronics Co., which had a 6.3% market share in the first quarter, were breaking away from the second-tier group of cellphone makers.
"One or both companies are poised to break from their historic designation as 'tier-two' manufacturers," Mr. Prohm said. Siemens spokesman Peter Gottal said the company was glad it had consolidated its market share, even as Nokia powered ahead. "The positive thing from our point of view is that the figures confirm our position as No. 3. The differences are very small, and it remains a very exciting race," he said. |
