Gartner is reporting that worldwide sales of mobile phones to end users in the second quarter of 2007 reached 270.9 million units, a 17.4 per cent increase from the same period last year. In Japan, sales to end users in the second quarter of 2007 were 12.1 million units, an increase of 10.3 per cent from the second quarter of 2006 but a decline of 17.5 percent from the first quarter of 2007.
“Despite a quarter-on-quarter drop, this was the second-biggest second quarter in Japan’s mobile devices history, since the same period in 2003, when camera phones drove replacement sales,” said Nahoko Mitsuyama, principal analyst for mobile communications research at Gartner, based in Tokyo.
It would be a reasonable conclusion that the current crop of models, with 1seg digital tv and FeliCa embedded m-commerce chips, are driving this latest upgrade cycle. We note with interest the steady year-on-year sales increase by SonyEricsson, gaining just over 3 percent market share.
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Worldwide sales of mobile phones to end users in the second quarter of 2007 reached 270.9 million units, a 17.4 percent increase from the same period last year, according to Gartner. Although Motorola faced some ongoing difficulties with its product portfolio, the company maintained its second position worldwide by sustaining an aggressive price strategy, which resulted in better sales to end-users than sales into the channel.
Gartner predicts worldwide mobile phone sales will reach 1.13 billion units in 2007.
“Emerging markets in Africa, Latin America and Asia/Pacific continued to fuel the industry’s growth,” said Carolina Milanesi, research director for mobile devices research at Gartner, based in Egham, UK. “More mature markets, such as those in Western Europe and North America, picked up after the expected slowdown in the first quarter.”
“Apple stole the limelight in the quarter with the introduction of its iPhone in North America in the last two days of the quarter,” Ms. Milanesi said. “But we will only be able to better assess the impact the phone has had in the North America market in the quarters to come.”
“Nokia’s devices business seems to be doing everything right at the moment,” she added. Nokia’ sales into the channel once again exceeded the 100-million mark in the second quarter of 2007. It sold slightly fewer than that to end users, due to little stock accumulated in Western Europe and Asia/Pacific and gained 3.2 percentage points compared with the same period last year. Nokia increased its market share both on a quarterly and annual basis, as it accounted for 36.9 per cent of worldwide sales in the second quarter of 2007. The company experienced strong sales of high-end phones, and the introduction of the N95 meant the average selling price of Nokia phones was on the rise. Nokia’s strong performance will continue in the second half of the year as the company grows its share of sales in emerging markets as well as in mature ones like Western Europe.
Motorola suffered from weak demand from its rather dated portfolio, and its attempts to reduce stock translated into poor sales into distribution channels. However, aggressive pricing allowed it to reduce inventory in key regions such as Western Europe, selling nearly 39.5 million units worldwide in the second quarter of 2007. Motorola’s market share dropped 7.3 percentage points from the second quarter of 2006. Gartner does not expect the company’s market share will return to close to 20 per cent until substantial changes are made to its product portfolio.
Samsung’s sales into the channel were strong in the second quarter of 2007, which saw the vendor take the second position from Motorola. However, with some inventory overhang from the first quarter of 2007, Samsung was only able to sell 36.2 million units, which was not enough to secure the second place in terms of sales to end users. Samsung’s growth was boosted by the Ultra ll family of products. While the latest version of the Ultra family focuses on specific applications such as music and video, Gartner analysts said more differentiation is needed from a design point of view to prevent the products in this family from blending into one model: a black, thin phone.
Sony Ericsson’s continued success in the second quarter of 2007 saw it consolidate its fourth place, with sales reaching 24.3 million units. Its portfolio now includes several successful products at the high-end and the mid-tier markets. The improvement in Sony Ericsson’s performance in Latin America in the second quarter was a sign that its mid-tier products are proving successful in emerging markets, and it will need to ensure sales of mid- and higher-tier phones stay strong, so that its average selling price and margins remain healthy.
LG sold 18.4 million units in the second quarter of 2007 and reached a market share of 6.8 per cent. New variants of the Chocolate phone, now at a very competitive price, as well as the popularity of the Shine in Western Europe and Asia/Pacific helped the company’s performance. The company’s recent launch of its “3G for all” phone, the KU250, in some markets in Western Europe and emerging markets in Asia/Pacific might help increase its market share, but the company is likely to pay the price in terms of a lower average selling price and thinner margins in the quarters to come.
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Vringo, a specialist in video ringtone sharing, has closed its Series B round of venture capital funding. The company has received USD 12 million in a round led by Warburg Pincus, the global private equity firm. The company will finance for its global expansion as it brings new personalisation and content services to mobile phone markets in the United States, Europe and Asia. The Vringo application, now in public beta, will soon be available on a wide set of mobile handsets including devices made by Nokia, Motorola, SonyEricsson and Samsung. The company will use this investment round to formally launch its product and to expand global partnerships with mobile carriers and content providers. With this funding round, the company has appointed George Allen, a principal at Warburg Pincus, to its board of directors.
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Japan Mobile Phone Sales for Q2 of 2007 (Japan)
