Mobile Phone Market Grows 29%, IDC Says
Online staff -- Electronic News, 5/6/2004
The worldwide market for mobile phones slowed slightly in Q1 due to expected seasonal effects, but still posted impressive growth year-on-year with a boost from smartphones, IDC reported today.
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According to the firm, worldwide mobile phone shipments decreased sequentially by 5.9 percent in the March quarter and increased by 29.3 percent year-over-year to 152.7 million units. Additionally, the nascent market for converged mobile devices, or smartphones, posted a sequential decrease of 5.5 percent but a striking year-over-year increase of 85.8 percent.
Nokia was hit hardest with a sequential decrease of 19.2 percent resulting largely from a lack of mid-range handsets. As carriers looked for alternative sources to fill consumer demand, vendors such as Motorola and Samsung were able to gain significant market share at Nokia's expense, IDC said. But despite the loss in market share, Nokia remains firmly positioned as the market leader in both the mobile phone and the smartphone markets, the firm said.
"Despite the anticipated seasonal effects of the post-holiday first quarter, worldwide mobile phone manufacturers were able to produce significant year-on-year growth on the strength of mid-range handsets featuring color screens and cameras," said David Linsalata, an IDC analyst, in a statement. "Additionally, the market for converged mobile devices, or smartphones, demonstrated strong growth potential as both enterprises and consumers continue to show interest in improved devices combining data and telephony capabilities."
With 1.5 billion wireless subscribers expected by the end of the year, IDC expects the worldwide mobile phone market to surpass 595 million units shipped in 2004. Through 2008, the market will continue to expand until it reaches nearly an all-replacement sales scenario toward the end of the decade with more than 800 million mobile phones shipping annually.
Broken down, IDC said that sales of 2.5G mobile phones will drive market growth for the next several years with sales of 3G mobile phones finally surpassing the 100 million annual unit mark in 2007. The converged mobile device market, surpassing 20 million units shipped worldwide in 2004, will be dominated throughout the decade by Symbian-powered devices -- Microsoft and PalmSource are expected to mount a long-term challenge, but will have greater difficulty gaining exposure to mainstream mobile phone market volume, IDC reported.
"A compelling case for 3G adoption by consumers has yet to be made. Simply put, there are very few reasons to drive the vast majority of consumers to buy a new 3G mobile phone," said Alex Slawsby, a senior analyst with IDC, in a statement. "As a result, we expect converged mobile devices, powered by Symbian and Microsoft, as well as 2.5G color screen and camera phones to be the core of the overall market for several years." |
