Worldwide mobile phone market grows 23%, Nokia re-enters 30% share bracket, says IDC

Nokia showed renewed strength and expanded vendor portfolios continued to gain traction with consumers as the worldwide mobile phone market posted a second consecutive quarter of sequential growth in the third quarter of 2004.

According to IDC's Worldwide Mobile Phone QView, worldwide mobile phone shipments rose 23% year over year and increased sequentially 7% in 3Q04 to 164.1 million units.

The third quarter marked the first time that Nokia has achieved greater than 30% market share since the company's drop during the first quarter of 2004. Although initially faulted for a lack of mid-range handsets, Nokia has responded by reinforcing its portfolio with a number of new mid-range and high-end handsets, including fashion, camera, and enterprise-focused mobile phones and converged mobile devices. As a result, the company finds itself firmly at the top of the market; conversely, the next four spots are more in flux than ever. Only 0.4% separates number 2 Motorola and number 3 Samsung, while the same amount separates number 4 Siemens and number 5 LG Electronics. Even LG Electronics is not completely safe, with Sony Ericsson less than 1% behind.

"During the third quarter of 2004, the mobile phone market continued to grow thanks to strong replacement trends in established markets and increased shipments into regions with low mobile penetration rates. Key to this growth has been the continued effort by mobile phone vendors to engage in a constant cycle of innovation, improvement, and renewal throughout their product portfolios," said David Linsalata, analyst in IDC's Mobile Devices program. "With many of the top market spots in close contention and the holiday season looming, those vendors who put forth well-positioned and comprehensive portfolios of entry, mid-, and high-end devices and can execute in meeting demand will be most rewarded by consumers with potential market share increases."

Vendor Highlights

- Nokia - Reflecting Nokia's continuing efforts to offer a broader range of products across all price points, market leader Nokia posted a year-over-year shipment increase of 13.6% and a sequential gain of 13.2%. Nokia's continued recovery boosted the company's market share back into the 30% range, from 29.6% in the second quarter to 31.3% in the third quarter.

- Motorola - Motorola's refreshed product portfolio helped to push the company to 15.3% year-over-year growth but was unable to prevent a 3.3% slip in sequential shipments. This drop led to a corresponding decline of 1.5% in market share, shrinking the distance between itself and challenger Samsung.

- Samsung - Despite rising 51.2% year over year, Samsung's shipments remained relatively flat sequentially as the company coped with sluggish demand in the domestic market and increased competition internationally. Samsung's lack of shipment growth in the face of a growing market resulted in a 1% drop in market share, placing the company solidly in the number 3 spot and within 0.5% of the number 2 position.

- Siemens - After a dramatic sequential drop in shipments during the second quarter, Siemens was able to rebound significantly with a 20.2% sequential gain in the third quarter. While Siemens' recovery allowed the company to retain its position in the top 5, LGE remains only 0.4% behind and poised to threaten the number 4 spot.

- LG Electronics - LGE posted a 55.1% year-over-year increase in shipments on the strength of increased CDMA and GSM sales in North America and Europe. This rise in shipments was also reflected in an 18.7% sequential shipment gain, allowing LGE to move past Sony Ericsson and claim the number 5 spot.

Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share, 3Q 2004 (Preliminary)
  

Rank	Vendor	3Q 2004 Shipments	3Q 2004 Market Share
1	Nokia	51,400,000	31.3%
2	Motorola	23,300,000	14.2%
3	Samsung	22,700,000	13.8%
4	Siemens	12,500,000	7.6%
5	LG Electronics	11,800,000	7.2%
	Other	42,400,000	25.8%
	Total	161,100,000	100.0%

Notes: Vendor shipments are branded shipments and exclude OEM sales for all vendors.

Mobile Phones -- These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text-messaging capability. Mobile phones may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Mobile phones exist at all points along the form factor, price point, and feature set continua. Mobile phones that combine voice communications capabilities with pen or keypad handheld data features are tracked within the Converged Devices category.

Source: IDC, November 4, 2004

IDC's Worldwide Mobile Phone QView provides device vendors, software developers, service providers, and component suppliers with timely and accurate information on the worldwide handset market. The program provides quarterly measurements of worldwide mobile phone and converged mobile device unit shipments and vendor market shares.

For more information about IDC's Worldwide Mobile Phone QView program, please contact Jonathan Guloyan at 508-935-4296 508-935-4369 or jguloyan@idc.com.

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