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To: Johnny Canuck who wrote (38086)	8/27/2002 11:43:04 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68065

Nokia gains in slack cell-phone market By Reuters August 27, 2002, 7:44 AM PT Nokia expanded its share of the world's mobile phone market, which grew just slightly in the second quarter, new research shows. Mobile phone makers sold 98.7 million units to consumers in the second quarter, up 0.8 percent from 97.9 million in the same quarter a year earlier, market researcher Gartner Dataquest said Tuesday. Gartner added that it expects the global market to grow about 5 percent this year as phone prices fall and color-screen models hit the market. Finland-based Nokia extended its lead to 35.6 percent global market share from 34.2 percent in the same quarter a year ago, though that was markedly lower than Nokia's own estimates of more than 38 percent. Nokia, which aims to reach a 40 percent share of the global market, said its second-quarter estimate was higher was because it believed that fewer phones were sold overall in the global market. Gartner noted that Nokia had also improved its position from the first quarter when it had 34.7 percent from the global market. No. 2 Motorola, based in the United States, remained steady at 15.7 percent market share, while South Korea's Samsung Electronics rose to 9.5 percent from 6.5 percent a year ago. Samsung achieved its dramatic increase in the first months of the year; the market share for both Motorola and Samsung remained virtually flat from the first quarter. Germany's Siemens, which in the first quarter was overtaken by Samsung as the third largest cell phone producer, increased its market share to 8.4 percent from 7.4 percent last year. Sony Ericsson , the joint venture between Sony and Ericsson's cell phone units, was the only top five loser at 5.4 percent, down from 7.7 percent in the second quarter last year. The big question now is whether the market as a whole will accelerate in the second half. Gartner's estimate of meager 0.8 percent unit sales growth reflects that the once-sizzling industry is struggling to avoid its second consecutive year of falling sales. Unit sales dropped 3 percent to 399 million units in 2001, compared with 2000. Gartner said it expects 5 percent growth for the full year because manufacturers Nokia, Siemens, Motorola and others will launch extremely low-cost models in the second half, which could spur consumer demand. Cheaper handsets will help the operators to cut mobile phone subsidies on prepaid packages, which do not carry the monthly fee often used to recover the subsidies, allowing operators to preserve cash to cut their massive debts. With the new series of phones, which are cheaper to assemble because they contain fewer components, operators will again be able to come out with attractive offers to target cost-sensitive consumers, particularly in Eastern Europe, Latin America and Asia. In the saturated European market, where seven out of 10 people already carry a cell phone, Gartner said, new color-screen phones and picture phones have started to create a buzz and could convince people to trade up. Market research group Strategy Analytics, like its peer Gartner Dataquest, also expects unit sales of around 420 million this year, but investment banks remain skeptical. Merrill Lynch is forecasting that 385 million handsets will be sold in 2002.