Mobile Handset Market Stays on Track in Q1 PDF Print E-mail
Tuesday, 06 May 2008 09:14
EL SEGUNDO, CA – Shrugging off any hint of a slowdown, first-quarter global mobile handset shipments rose 17% over the same period last year, according to iSuppli Corp.
 
Global shipments reached 296 million units, down 12.4% sequentially but in-line with normal seasonality, says iSuppli. Shipments fell 12.8% on a sequential basis a year ago.
 
Nokia easily maintained its market dominance, with shipments of 115.5 million units, a market share of 39%, says the research firm. Shipments were up 26.8% year-over-year, but down 13.5% sequentially.
 
“Nokia managed to defy the seasonal slowdown in the key strategic territory of China, with its shipments to the nation rising 4% sequentially to 21 million units,” noted Tina Teng, analyst, wireless communications, for iSuppli. “China in the first quarter accounted for 18.2% of Nokia’s worldwide shipments, up from 14.5% during the same quarter in 2007.”
 
Nokia is still struggling in North America, where its first quarter shipments fell 49% sequentially to 2.6 million units, a historical low.
 
No. 2 Samsung’s share rose to 15.6%, up from 13.7% in the fourth quarter. The South Korean electronics giant expanded in emerging markets, namely China and India. In developed regions, Samsung also gained traction with its flagship products, and the company continued to benefit from refreshing its product portfolio to address all market segments, says iSuppli.
 
Motorola’s mobile handset business continued to struggle. The No. 3 ranked handset supplier retained its position with a 9.3% share of shipments, down from 12.1% in the prior quarter.
 
“Although Motorola has tried to maintain a lean operation by instituting workforce cuts across all business units, the company’s Mobile Devices group still suffered a disappointing negative 10.5% operating profit margin in the first quarter,” Teng observed. “Motorola had narrowed its market-share gap with Samsung in the fourth quarter. However, Motorola’s underperformance in the first quarter cemented the company’s rank at No. 3, only slightly ahead of No. 4 LG Electronics.”
 
Sony Ericsson slipped to the fifth in the first quarter. Shipments fell 27.6% sequentially and rose by a scant 2.3% year-over-year – massively underperforming the market. Sony Ericsson’s global market share declined to 7.5%, down from 9.1% sequentially.
 
The company blamed its weak performance on slow demand for midrange to high-range handsets, areas that have traditionally been strong for the company.
 
Sony Ericsson suffered its largest quarterly sequential revenue decline in its home market of Western Europe, with a drop of 38%. The company’s handset average selling price showed a slight sequential decline of 1.6% from the first quarter of 2008 in Euros.
 
However, the company’s ASP declined 9.7% compared to the same period in 2007, which can be explained by its moves to expand its product portfolio to lower-cost handsets that address emerging markets.
 
LG managed to outperform the industry, with shipments rising sequentially by an industry-leading 3%, and by 54.4% compared to a year earlier.
 
The company not only improved its market share to 8.2% on unit shipments of 24.4 million, but it also boosted its operating profit to 13.9%, up from 8.8% last quarter.
 
The company credited its sales growth to strong results in emerging regions and in its domestic market. LG achieved quarterly sequential growth of 32.4% in emerging markets with 6.6 million units. However, European regional sales decelerated with a sequential decline of 29%.
 
Despite this, the company scored an 8.2% market share in the first quarter, allowing it to pass Sony Ericsson to be the No. 4 player in the market.
 
While the top handset brands are in a neck-and-neck race, the industry is keeping an eye on emerging players in the market – particularly China’s Huawei and ZTE, according to iSuppli.
 
ZTE ended the first quarter with shipments of 6 million units, up 51.5% year-over-year. These two OEMs’ products can now be found on U.S. operators’ networks, opening up the possibility the companies could expand their presence in the U.S. in the coming years.
 

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