Nokia Takes the Lead as Wireless Makers Sell 162.9 Million Phones in '98, Up 51%
By QUENTIN HARDY AND GAUTAM NAIK
Staff Reporters of THE WALL STREET JOURNAL
The fight goes to the Finnish.
Makers of wireless phones sold a record 162.9 million units world-wide last year, a 51% increase from 107.8 million units in 1997, according to a closely watched industry think tank. Finland's Nokia Corp. scored the biggest gains, the report said, taking the top market-share position from Motorola Inc.
The report from Dataquest Inc. didn't include the dollar value of those sales, but analysts say a typical wireless phone has a wholesale price of slightly more than $170, valuing the market at more than $27.7 billion last year. Service providers often discount the phones to sign on people to their service contracts, making these phones seem cheaper at retail.
"There was some really explosive growth in the market," said Peter Richardson, who wrote the report. Among the key markets, he said, European service providers did well through sales of prepaid wireless services, and Japanese consumers bought new styles of phones despite that country's economic troubles. In the U.S., new plans offering cheaper calls over more of the country led to massive fourth-quarter purchases.
The report comes as Nokia prepares to launch a digital-cellular phone intended to improve coverage for customers in the U.S. The "tri-mode" phone works on older analog networks, as well as two versions of a digital standard known as CDMA, or code-division multiple access.
The Dataquest report said Nokia sold 37.4 million handsets last year, or 23% of the market, up 82% from 20.6 million units, a 19% share, in 1997. Motorola sold 32.3 million units for a 20% share, up 28% from 25.3 million units, or a 23.5% share, in 1997. Sweden's Telefon AB L.M. Ericsson was third, with 23.8 million wireless handsets sold, a 15% share, up 50% from 15.9 million units, or 15% of the market.
Officials at several of the companies in the report confirmed its general outlines. "It might be at the high end, but it is not far off," said Jan Ahrenbring, vice president of marketing at Ericsson. "About 15% would be right" for Ericsson's market share, he said, adding that his company expects more than 200 million wireless phones to be sold this year.
Nokia says it shipped 40.8 million phones to its distributors in 1998, about in line with Dataquest's count of phones actually sold.
Motorola disputed the Dataquest numbers. "They are light" on the actual number of Motorola phones sold, said James Caile, the company's vice president of marketing. Motorola doesn't disclose the number of phones it sells or its market share, but Mr. Caile acknowledged, "We gave up some share, particularly in the early part of the year."
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