- August 23rd, 2007
- 1:34 pm
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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The number of people taking advantage of the benefits of mobile broadband will exceed one billion by 2012, with high-speed packet access (HSPA) contributing more than 70 per cent to this increased popularity, according to Juniper Research.
Over the next five years, almost one in three mobile subscribers will make use of mobile broadband, driven by demand from connectivity-hungry users in Western Europe, North America and to an extent, China and the Far East, claims the analyst, who is predicting that the associated total revenue for mobile broadband services will top $400 billion globally, annually during the same time frame.
But, it’s not all good news. The availability - or lack of - suitable devices, such as handsets, data cards, laptops and so on, may prove a big factor in determining just how rapidly the technology is adopted in practice as mobile broadband is a device-based technology, according to Juniper’s report entitled ‘Mobile Broadband Markets: EV-DO, WiMAX, HSPA & Beyond 2007-2012.’
“HSPA’s in-service status in 2007 makes it already the most advanced mobile broadband technology, with many further deployments due in the near and medium term. For the 3G service provider base, HSPA represents a software upgrade rather than a new network investment. HSPA will also benefit from technology ‘leap’ subscribers in the developing nations, and handset churn elsewhere, with users migrating to HSPA-based broadband as the norm,” said the report’s author Howard Wilcox.
“Over the last year there has been significant activity in the mobile WiMAX market, including many trials and contract announcements by leading vendors and operators. Mobile WiMAX is now positioned to achieve a single digit per cent proportion of the global mobile broadband subscriber base by 2012. This will represent a significant attainment for this new mobile platform. We believe that the WiMAX market will see substantial growth after 2012, as new networks are built out and new applications are adopted.”
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The global market for internet TV service is forecast to be worth USD 5.79 billion in 2011, up 13.7-fold from USD 422.7 million in 2006. The figure is forecast to be USD 614.4 million in 2007, rising to USD 872.8 million in 2008, USD 1.7 billion in 2009, and USD 3.31 billion in 2010. The web is quickly growing into the world’s largest on-demand, interactive video library. The bandwidth required for internet TV will grow by more than 44-fold from 2006 to 2011 to almost 7 million Tebibytes (TiBs). Internet TV will be dominated by North America and Western Europe. Regions such as Latin America and Eastern Europe will not have significant internet TV penetration through 2011.
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The installed base of camera phones will exceed 1 billion in 2007, as mature market replacement sales above one megapixel and emerging market first digital camera phone purchases (typically VGA) continue to drive sales, according to the latest report from Strategy Analytics¡ª”CMOS Beats CCD in Half-Billion Global Camera Phone Market.”
Neil Mawston, Associate Director and Chief Mobile Imaging Analyst, commented: “Camera phones have been a huge success, with unit sales rising from 3 million in 2001 to 500 million last year. As CCD continues to lose the sensor wars in the mobile space, Micron, Omnivision and other CMOS vendors have been the prime beneficiaries.”
According to David Kerr, Vice President of the Global Wireless Practice, the camera phone market is now entering its third phase where the focus will move from megapixel and basic image enablement to the quality of the imaging experience. “In North America, and Western Europe, One megapixel devices are now table stakes, while niche devices with five megapixels or more will rise to over 2 percent of sales this year. Features such as zoom, flash and autofocus will become critical differentiators in 2008 and beyond,” said Kerr.
Other key findings are the following:
- Global camera phone handset revenues will grow to over $120 billion by 2011 when one- third of the world population will own a camera phone.
- Nokia, although not first to market in this class, is the clear market leader at 28 percent global share, while Motorola also shipped over 100 million units in the last 12 months.
- Honorable mention must also go to SEMC, which has raised the user experience bar for camera phones with their Cybershot range, and has outperformed in this category as well as in the music domain.
- VGA camera phones’ share of the market will fall from 38 percent to under 7 percent over the forecast period.
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Gartner also predicted that worldwide mobile gaming revenue could reach $4.3 billion in 2007, up nearly 50 percent from 2006.
“Given the ubiquity of mobile phones in many markets and the ease of game-play, mobile gaming is expected to reach more of the global population than has been the case for traditional PC and console gaming,” said Tuong Huy Nguyen, senior research analyst at Gartner.
“This will catapult mobile gaming revenue beyond that from mobile TV and adult content, but we still expect it to lag behind mobile music, since music is a more familiar form of entertainment,” he added
On a regional basis mobile activity is especially popular in emerging markets due to ease of access and low price points compared to PC and console gaming.
Gartner expects mobile games revenue in North America to reach $716.9 million this year and $1.7 billion in 2011. It predicts Western European revenues will rise to $1.5 billion in 2007 and $2 billion by 2011. Asia/Pacific revenue for 2007 is forecast at $1.8 billion, hitting $4.6 billion by 2011.
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Sales of mobile phones in the first quarter crossed a quarter of a billion units, driven mostly by demand in China, Japan and other Asia/Pacific countries, a market research firm said. Shipments were 257.4 million units, up 14 per cent compared to the same quarter a year ago, Gartner said. While sales in Asia/Pacific countries were strong, Western Europe and North America had their expected slowdown following strong Christmas sales.
With inventories dwindling, Gartner said it remained confident that handset makers would ship 1.15 billion units this year, a 16 per cent increase over last year. Sales are expected to be driven by new phone sales in regions such as Africa, and replacement sales in emerging markets, which include Latin America and China. Mature markets such as North America and Western Europe would see a lower rate of replacements sales than in the last couple of years.
Leading mobile-phone maker Nokia sold 92 million handsets in the quarter, giving the company 35.7 per cent of the global market, nearly double that of second-place manufacturer Motorola. Nokia increased its share in the quarter by nearly 2 percentage points over a year ago.
Nokia’s multimedia product line drove sales, while sales of mid-tier range phones were boosted by sales of the new 6300 handset, Gartner said. Nokia was also successful in the enterprise market during the quarter, selling close to a 1 million Eseries devices.
Gartner expects Nokia to continue to take advantage of Motorola’s current weakness in the market. Nokia is scheduled to expand its portfolio this year with the addition of the 2630 phone and the Navigator.
Motorola continued its slide in the first quarter, as its market share fell to 18.5 per cent from 20.3 per cent a year ago. The company shipped 47.6 million units. Motorola built a considerable amount of inventory in markets such as Asia/Pacific and Western Europe in the second half of last year, resulting in much lower than expected sales into the channel.
Gartner expects Motorola to have a difficult second quarter, but the second half of the year looks more promising with new products, such as the Razr2, set to hit the market.
“The challenge for the company will be to make the Razr2 as successful as its predecessor,” Gartner analyst Carolina Milanesi said in a statement.
Rounding out the top five vendors were Samsung with a 12.5 per cent market share, Sony Ericsson, 8.4 pre cent, and LG, 6.2 per cent. Samsung’s share was unchanged from a year earlier, while LG posted a slight increase. Sony Ericsson registered big jump from 5.8 per cent of the market last year.
Sony Ericsson’s performance was driven mostly by successful products across the high end to the low end. The company registered strong growth in Asia/Pacific, Latin America, and Western Europe.
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Sales of mobile phones in the first quarter crossed a quarter of a billion units, driven mostly by demand in China, Japan and other Asia/Pacific countries, according to market research firm Gartner.
“Shipments were 257.4 million units, up 14% compared to the same quarter a year ago, Gartner said. While sales in Asia/Pacific countries were strong, Western Europe and North America had their expected slowdown following strong Christmas sales.
Nokia sold 92 million handsets in the quarter, giving the company 35.7% of the global market, nearly double that of second-place manufacturer Motorola. Nokia increased its share in the quarter by nearly 2 percentage points over a year ago.”
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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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Egyptian billionaire Naguib Sawiris, the chairman of Orascom Telecom, has announced that his telecoms holding vehicle Weather Investments will make an offer within the next two weeks to buy the 50%-minus-one-share that it does not already own in Greece’s largest alternative telco by revenues, Tellas. Egypt-based Weather Investments owns its 50%-plus-one-share interest in Tellas through its wholly owned subsidiary, Italian telco Wind Telecomunicazioni, whilst the remaining shares are held by PPC Telecommunications, a unit of Greek electricity company Public Power Corp (PPC). Earlier this year Weather acquired Greece’s third largest mobile operator by subscribers, TIM Hellas, and its subsidiary Q-Telecom, which provides GSM, fixed line and internet services, and Sawiris immediately proposed a plan to combine his new Greek assets with Tellas by the end of 2007 to create a new full-service competitor to incumbent telco OTE. Weather Investments is in advanced talks with PPC about buying its stake in Tellas, Sawiris told Reuters on Saturday. ‘We are currently planning to prepare an offer [in]…maybe two weeks maximum,’ he said, adding that ‘We have to come to a price which is fair,’ but declined to give a figure. If the acquisition is agreed, he plans to combine the three companies and expand their fixed line and broadband services, and possibly make further acquisitions: ‘We intend to put them under one roof…[Greece has the] lowest broadband penetration in western Europe…we could buy a cable company, a fibre-optic company; we could buy some of the ISPs.’ TIM Hellas and Q-Telecom are in the process of merging their operations
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According to a new research report from the analyst firm Berg Insight, the number of machines connected to mobile networks in Europe will grow by 43.7 percent annually to reach 52.0 million by 2011.
At the end of 2006 there were about 8.5 million active cellular and satellite wireless M2M connections in the EU and Western Europe . Energy meters currently constitute the largest vertical market segment in terms of deployed units, followed by motor vehicles, security alarms and POS-terminals. In 2011, motor vehicles are forecasted to have become the largest segment, accounting for more than 60 percent of the total installed base.
“Remote meter reading is the fastest growing application area in Northern Europe, whereas demand for vehicle telematics is particularly strong in the UK and Italy ?, said Tobias Ryberg, senior analyst, Berg Insight. “In the coming years we expect that the European automobile manufacturers will accelerate the market growth rate by introducing GSM/GPS emergency call devices as a standard safety feature.?
Automatic GPS-aided crash notification is already offered on all vehicles from GM and some other manufacturers on the North American market. The European Commission has proposed that a so called eCall device should be required on all new cars sold in the EU from 2010 at the earliest.
About Berg Insight
Berg Insight offers premier business intelligence to the telecom industry. We produce concise reports providing key facts and strategic insights about pivotal developments in our focus areas. Our vision is to be the most valuable source of intelligence for our customers.
Wireless Mobile Telecom Wireless News
Worldwide Mobile Phone Sales Grew 17% in Second Quarter of 2007
