After Gartner report which predicted slowing of the growth in the mobile handset sector, shares of some of the world’s largest handset manufacturers fell yesterday. The growth, according to the research group, will be between 10 and 11% in 2008, a result of the global economic slowdown.
Forbes reported a drop in shares of Nokia, Sony Ericsson and Motorola as a result of the study. The slowing of growth is reported just prior to many of the vendors reporting their second-quarterly financial results. Nokia is scheduled to report its figures on July 17, Sony Ericsson on July 18 and Motorola on July 31. One handset vendor that appears to be apart from the league is Apple; Forbes reports that its shares climbed 1 percent yesterday as it reported that it had sold 1 million 3G iPhones within three days of launch.
Gartner had previously forecast growth of around 10 to 15 percent, while last year the sector grew by 16 percent year-on-year. Carolina Milanesi, Gartner’s head of mobile device research says, “”Signals for a weaker-than-expected second quarter have arrived from Sony Ericsson as well as some component manufacturers. Despite expecting a stronger second half, we feel that the weakness of the first half has pulled the overall year growth down.”
Worldwide sales of mobile phones reached 294.3 million in the first quarter of 2008, a 13.6 percent increase over the first quarter of 2007, Gartner reported today, but the news wasn’t good across the board. Phone sales in Western Europe decreased 16.4 percent compared to a year ago, the first decrease since Gartner started tracking the market seven years ago; Motorola was the only handset maker to see sales decrease year over year; and Sony Ericsson lost its position as the fourth-largest handset maker to South Korean LG.
Here’s some key findings from the report:
In first place, Nokia sold 115.2 million mobile phones Q1, increasing its marketshare to 39.1 percent. Its sales were helped by a broad portfolio of phones that appeals to both emerging and mature markets. But competition is increasing, Gartner warned, and said Nokia must continue to innovate and improve usability and design.
In second place, Samsung sold 42.4 million units during the quarter, increasing its marketshare to 14.4 percent from 12.4 percent in the year-ago period. Gartner said Samsung is reacting quickly to the focus on touch-screen devices, but that it will need to diversify its designs and strengthen its lower-end portfolio to increase sales in emerging markets.
In third place, Motorola continued to show problems with sales falling to 29.8 million handsets in Q1, representing a 37 percent drop compared to the year-ago period. Although it introduced new models, Gartner said its portfolio is simply not competitive and has little chance of winning back its its No. 2 position, and should even watch out for LG and Sony Ericsson.
In Q1, LG sold 23.6 million phones, claiming a 8 percent marketshare to overtake Sony Ericsson’s fourth-place position. LG focused on touch-screen devices, but Gartner warns that the vendor needs a stronger smartphone portfolio, as consumers and operators have started to place more emphasis on this market segment.
In fifth place, Sony Ericsson had a rough first quarter, selling only 22.1 million units. The company said the weak results were due to the softness in the high-end segment in Western Europe. With new products coming later this year, Gartner said it is in a good position to win back the fourth-place ranking.
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Some 350 million business and consumer users will have access to mobile e-mail by 2010, according to a report from Gartner. Mobile e-mail is undergoing a democratisation process that will bring it to the masses, according to the report. There are currently fewer than 20 million business users of mobile e-mail worldwide, representing just 2 percent of all e-mail accounts. The growth to 2010 will be helped by the progressive availability of products and services. Gartner expects mobile e-mail to reach commodity status by 2012. A longer term trend that will accompany wireless e-mail adoption is convergence. By 2017, mobile e-mail will be fully integrated with other messaging tools into personal, converged communications.
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Gartner has released some figures on mobile handset shipments, predicting that global handset sales for 2007 will grow to 1.15 billion on the back of strong demand in Asia and Africa. That would represent a 16 percent year-on-year rise, which Engineering News notes is higher than the average of less than 10 percent growth predicted by analysts polled by Reuters last month. “Gartner said 257.4 million phones were sold in January-March, up 14 percent year-on-year, boosted by 40 percent growth in the Asia-Pacific region. Western Europe and North America saw only 4 percent and 2 percent annual growth, respectively.” Nokia claimed a 35.7 percent marketshare, followed by Motorola on 18.5 percent, Samsung had 12.5 percent, Sony Ericsson had 8.4 percent and LG had 6.2 percent. These figures were revealed in general in the earnings reports of the companies—Nokia and Sony Ericsson showed growth, Motorola showed a big drop.
On the PDA side “shipments of handheld computers running Windows Mobile soared 64 percent in the first quarter, propelling worldwide shipments overall to 5.1 million units, a 39.7 percent increase over the same period a year ago,” reports TelecomAsia of Gartner figures. Windows Mobile Licensees accounted for more than 60 percent of total shipments, nearly 3.2 million PDAs in the quarter. RIM was the next highest with 18.1 percent of the PDA OS market, with other companies such as Palm focusing on the much larger smartphone market, where Microsoft has “faltered”.
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Shares of Nokia, Motorola and Sony Ericsson fall. Analysts predict the fall of growth rate to 10%-11% in the handset sector
