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Advanced Features in High-End Phones Help Drive Worldwide Mobile Phone Shipments to 15.3% Growth in Second Quarter, Says IDC
FRAMINGHAM, Mass., July 31, 2008 - The worldwide mobile phone market continued solid double-digit growth in the second quarter (2Q08) as competition in high-end devices heated up. According to IDC's Worldwide Mobile Phone Tracker, vendors shipped a total of 306.0 million units, an increase of 5.6% from the 289.7 million units shipped during the previous quarter and up 15.3% from the 265.4 million units shipped during 2Q07. Total shipments for the quarter were in line with IDC's expectations, even as vendors cited economic challenges and changing demands within key regions. "Since the start of the year, vendors have been wary of the potential decrease in demand for mobile phones," says Ramon T. Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends Team. "That has not stopped vendors from experimenting with and releasing a host of mid-range and high-end devices with GPS, touchscreen, and multimedia. This also goes for hotly contested emerging markets, where vendors are introducing phones that offer features in addition to voice telephony. Reception towards these devices has been warm, and as we head into the holiday quarter, demand for these and other devices will no doubt increase." These design changes are escalating competition between devices in a new way. Converged mobile devices, also know to the industry as smartphones, have typically been the category of handsets incorporating higher-end features such as GPS and touchscreen. However, these features are quickly moving onto handsets further down the food chain - feature phones. "Smartphones are still seeing growth rates hovering around 40.0% year-over-year, while the rest of the industry is growing at roughly 10.0%," said Ryan Reith, senior research analyst with IDC's Mobile Phone Tracker. "However, grouping 'the rest of the handsets' into one category is doing the industry no justice. The rise of the feature phone has created a battle at the high-end of the market, with the main difference between smartphone and feature phone being the high-level operating system. We expect the competition at the high-end will help drive growth within the market and help move volume to higher-end devices." Regional Analysis
Top Five Mobile Phone Vendors Nokia posted solid growth of 21.0% from a year ago, although this is down from the 26% gains in the previous three quarters. Nokia managed impressive operating margins for the quarter and boosted market share 39.9% worldwide. The company's relentless focus on and ability to meet demand within emerging markets helped propel shipment volumes forward as nearly a third of its total volumes worldwide came from its 1200 and 1208 models. Meanwhile, Nokia's Nseries, Eseries, and feature phones generated the most revenue and profit for the company. Even with more than twenty new devices announced during the first half of the year, more models are expected in the second half. Samsung maintained its position as the No. 2 handset vendor worldwide. Year-on-year growth of 22% was quite strong, even though it was slower than in recent quarters and meant a slight decline in volume from the previous quarter. Affecting the company's performance the most was a combination of greater competition for mid-range and high-end phones, economic slowdown, and weak 2Q demand. Compounding Samsung's challenges were increased marketing expenditures, which pushed its operating margins down to 12.8%. This, however, did not prevent the company from enjoying success with its own high-end devices, including the Soul, F480, and the launch of the M800. Motorola weathered another quarter of challenges, with another top executive leaving the company, no new leader for its Mobile Devices division despite several names being rumored to take the position, and another quarter of operating losses. Still, Motorola recorded a slight increase in shipments from the previous quarter, enough to stay ahead of LG Electronics for the No. 3 spot worldwide. New to the company's portfolio were a series of feature phones, including the ROKR E8, two new MING devices, and several new 3G devices. LG Electronics reinforced its position as the No. 4 mobile phone vendor worldwide with shipments reaching a new record high. Accompanying this were success in key emerging markets, well-managed costs, and a warm reception towards its premium models, including the Secret, Venus, and Viewty models. Taken together, LG enjoyed a slight improvement in its operating margin from the previous quarter. Looking ahead, the company hopes that stronger marketing and an ability to respond proactively to the market will insulate it from potential market-wide ASP declines later this year. Sony Ericsson sustained another tough quarter, citing soft demand in Europe, increased price competition, and a product portfolio that did not meet expectations. But even its less favorable product mix did not prevent the company from announcing and shipping a number of new Cyber-shot and Walkman-branded handsets to the market. The company saw its operating margin and volume growth slip into negative territory. To combat this, CEO Hideki Komiyama announced plans to realign the company's operations and resources, which include reducing company headcount. Five Mobile Phone Vendors, Shipments, and Market Share, Q2 2008 (Units in Millions)
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 31, 2008 Note: 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. For more information about IDC research, please contact: Tatiana Hinova << Back to main page |
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