King Nokia and the Handset Game
Handsets constitute the largest consumer electronics market, both in unit sales and revenue dollars.
Gartner Dataquest recently reported 2002 handset sell through (sales to end users). According to Dataquest over 423 million mobile phones were sold worldwide in 2002, 6% more than the previous year. The industry benefited from a strong Christmas season, selling nearly 123 million mobile phones worldwide in the fourth quarter - a 14% increase from 2001. Nokia sold over 45 million phones in the fourth quarter, more than its three nearest competitors combined.
Overall, the top four handset manufacturers increased their stranglehold over the market, with their combined market share rising to 69.3% in 2002 from 64.3% the previous year.
Despite the fact that at the beginning of 2002 most analysts expressed concerns about Nokia being able to grow or maintain market share, Nokia's 2002 market share reached 35.8 percent, almost a full percentage point gain in market share vs. the fourth quarter of 2001. Nokia did even better in the fourth quarter of 2002 when its market share approached 37 percent.
Gorilla Gamers should note that King Nokia's unit sales are 2.34x their next closest competitor (Motorola).
Nokia surpassed Motorola as the worlds largest producer of handsets in 1998 and in 2000 their market share exceeded Motorola's by >2x for the first time.
In 2002 Nokia unit sales exceed the total unit sales of #2 Motorola, #3 Samsung, and #4 Siemens combined.
In 2002 Nokia unit sales also exceed the total unit sales of all other handset manufacturers combined.
Dataquest analysts say Nokia will face challenges in 2003, but Dataquest's Ben Wood says:
""All you can do is take your hats off to them [Nokia]. ... Multiple opportunities exist for Nokia to maintain and even increase its market share in 2003, particularly in code division multiple access (CDMA) markets in Asia/Pacific and the Americas."
While 4 of the top 5 manufacturers posted strong 4th quarters Samsung slipped and its market share fell to 9.5% from 10.6% in the third quarter. samsung did however have a spectacular year.
2002 Worldwide Mobile Terminal Sales to End-User Estimates
2002 2002 2001 2001 YOY
Sales Market Sales Market Growth
Company Units Share Units Share %
Nokia 151,421.800 35.8% 139,672.2 35.0% 8.4
Motorola 64,640.100 15.3% 59,092.2 14.8% 9.4
Samsung 41,684.400 9.8% 28,233.5 7.1% 47.6
Siemens 34,618.000 8.2% 29,752.8 7.4% 16.4
SonyEricsson 23,112.900 5.5% 26,955.9 6.7% -14.3
Others 107,941.400 25.5% 115,876.6 29.0% -6.8
Total 423,418.500 100.0% 399,583.2 100.0% 6.0
Note: Ericsson sales only in 2001. Sony 2001 sales included in Others.
This table does not include iDEN sales to end-users.
Source: Gartner Dataquest (March 2003)
Nokia Mobile Phones sales of Euro 23.2 Billion accounted for 77% of Nokia's Euro 30.01 Billion (USD $31.5 Billion) total sales in 2002 and provided a reported IAS (not pro forma) operating profit of Euro 5.2 Billion (22.4%) up from Euro 4.5 Billion (19.5%) in 2001.
>> Gartner Dataquest Says Fourth Quarter Sales Lead Mobile Phone Market to 6 Percent Growth in 2002
Press Release
Gartner Dataquest
San Jose, CA
March 10, 2003
www3.gartner.com
Worldwide mobile phone unit sales totaled 423.4 million units in 2002, a 6 percent increase from 2001, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). Fourth quarter worldwide mobile phone sales totaled 122.6 million units, an increase of 14 percent vs. the same period last year.
Gartner Dataquest analysts noted that fourth quarter mobile operator connection growth came in well above industry expectations in almost every region of the world, helping to drive fourth quarter sales up almost 15 percent sequentially.
"Consumers embraced a variety of innovative handsets, especially those with color screens, rather than delaying replacement purchases because of an ongoing lack of compelling mobile data services," said Bryan Prohm, senior analyst with the Mobile Communications Worldwide research group for Gartner Dataquest. "This is an encouraging trend, because as carriers and manufacturers determine how to better align devices with applications and services, the market may again prove stronger than expected during 2003."
Once again, the largest vendors realized much better results than the smaller and regional vendors in 2002. Four of the top five vendors gained market share vs. 2001 (see Table 1), while Samsung led all vendors with a 47.6 percent increase in sales to end-users.
Table 1
2002 Worldwide Mobile Terminal Sales to End-User Estimates
2002 2002 2001 2001 YOY
Sales Market Sales Market Growth
Company Units Share Units Share %
Nokia 151,421.8m 35.8% 139,672.2 35.0% 8.4
Motorola 64,640.1m 15.3% 59,092.2 14.8% 9.4
Samsung 41,684.4m 9.8% 28,233.5 7.1% 47.6
Siemens 34,618.0m 8.2% 29,752.8 7.4% 16.4
SonyEricsson 23,112.9m 5.5% 26,955.9 6.7% -14.3
Others 107,941.4m 25.5% 115,876.6 29.0% -6.8
Total 423,418.5m 100.0% 399,583.2 100.0% 6.0
This table does not include iDEN sales to end-users.
Nokia
Nokia's 2002 market share reached 35.8 percent, almost a full percentage point gain in market share vs. the fourth quarter of 2001. Nokia did even better in the fourth quarter of 2002 when its market share approached 37 percent. However, Gartner Dataquest analysts said the vendor will face challenges in 2003.
"Some large Global System for Mobile Communications (GSM) carriers will actively promote other manufacturers' products during 2003 in an attempt to restrain Nokia's growth in major markets," said Ben Wood, senior analyst with the Mobile Communications Group for Gartner Dataquest in Europe. "Nevertheless, multiple opportunities exist for Nokia to maintain and even increase its market share in 2003, particularly in code division multiple access (CDMA) markets in Asia/Pacific and the Americas."
Motorola
Some key product delays hampered Motorola's recovery during 2002, and the company netted only a small year-over-year increase in market share, but prospects for 2003 remain bright. "During 2003, look for Motorola to again vie for leadership of the global CDMA market, consolidate an emerging leadership position in the Americas and move to defend share in China. Motorola's greatest challenge however, remains how to address an enduring weakness in the Europe, Middle East and Africa (EMEA) region Prohm said.
Samsung
Samsung, the world's third-largest vendor of mobile phones during 2002, is positioned for continued success in 2003. "Samsung has a mature and innovative handset portfolio encompassing CDMA, GSM, time division multiple access (TDMA), and it maintains a strong presence in all major markets except Japan. It has become almost universally regarded as the industry's most significant threat to incumbent mobile terminal manufacturers," said Ann Liang, industry analyst with the Mobile Communications Group for Gartner Dataquest in Asia/Pacific.
This research is published by Gartner Dataquest's Mobile Communications Worldwide research group. This group examines the opportunities in mobile communications with detailed coverage of the entire value chain of mobile services and equipment that are enabling the creation of a new wire-free networked economy. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at:
gartner.com.
Gartner Dataquest, a unit of Gartner, Inc., is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.
About Gartner:
Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit gartner.com. <<
Disclaimer: I am a Nokia investor. My long position in NOK currently constitutes 10.2% of the tech equities held in my combined portfolios. I have on several occasions over the last 2 years indulged short term, but long, NOK trades of a 1 week to 2 months duration and each has been successful to the tune of 25% to 105% appreciation in value. I am currently not looking to either increase or decrease my long position in NOK. Were I looking to add I would wait for a share price several dollars lower than Friday's close of $14.31 simply because of the uncertainty associated with the wireless sector at the moment.
- Eric - |
