Reuters Technology Report
Global Cellphone Sales Fall Four Percent - Survey
By Lucas van Grinsven and Paul de Bendern
LONDON/HELSINKI (Reuters) - Global mobile phone sales dipped in the first quarter, while South Korea's Samsung remained the fastest growing mobile phone maker, research group Gartner Dataquest said on Wednesday.
Overall sales to consumers declined by 3.8 percent to 93.76 million mobile phones in the first three months, as cellphone makers and wireless operators had difficulty in producing new designs and applications to excite consumers.
The figures stand in stark contrast to the 60 percent average growth rate between 1996 and 2000.
Shares in leading European cellular phone makers were largely unmoved by the report, instead falling on generally weak sentiment and on Deutsche Telekom's poor results.
Nokia, the world's largest mobile phone maker, closed 7.4 percent lower at 15.95 euros, while Siemens was off 2.2 percent at 69.25 euros and Ericsson was 7.1 percent lower at 23.50 crowns. The Dow Jones Europe Technology Index was five percent lower.
Nokia's market share in mobile phones was little changed year-on-year at 34.7 percent but was down against the fourth quarter as rivals increasingly shipped more popular models such as color screen and clam-shell phones to consumers.
"Nokia is going for profits over market share, but there's pressure from rivals like Samsung," Gartner Dataquest senior analyst Ben Wood told Reuters.
The big surprise was Samsung Electronics, which overtook Germany's Siemens as the world's third-largest mobile phone maker. Its market share rose to 9.6 percent from 6.2 percent in the same quarter last year.
Last year Samsung emerged against the odds as the world's fastest growing mobile phone maker.
"The message is Samsung. They're consistent in providing good products and they're strong in every region as they support multiple technologies," Wood said.
Motorola from the United States, recovered from a fourth-quarter dip to defend its number-two slot with a first quarter market share of 15.5 percent, versus 13.6 percent in the first quarter of last year. It was helped by its China sales.
But the fight for the third, fourth and fifth places continued, with three players not far apart.
Siemens fell to fourth position, but its market share rose to 8.8 percent against 6.8 percent in the same period last year as it benefited from its strong European position in current GSM technology.
Siemens targets both ends of the market with expensive and cheap models and is now expected to expand into Latin America.
Sony Ericsson was the world's fifth mobile phone maker with a 6.4 percent market share. But the venture, featuring for the first time as the combined handset company of Japan's Sony and Sweden's Ericsson, has ambitions of becoming the world's leader.
OVERALL SALES DECLINE
Overall sales were hurt by saturated markets in Europe, the removal of subsidies by telecoms operators and weak global economies, Gartner's Wood said.
"The weakness in Western Europe and Latin America had a major effect," he added.
Demand for phones powered with so-called General Packet Radio Service, seen as a stepping stone to high-speed third-generation multimedia services, improved, but the failure to get consumers to actually use the data services offered hurt the market.
Telecoms operators failed to convince end-users of the benefits of this new network, which offers slightly faster access to mobile Internet services, Gartner said.
Gartner said saturated European mobile phone markets meant future growth would be challenging for handset makers.
Nokia's goal of grabbing 40 percent of the market now looks even more unlikely, especially given the lack of growth in the whole sector and the emergence of more competitive rivals.
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